'SGI signals a new era for mankind': How the Saudi Green Initiative Forum could change the world

Workers plant trees next to a highway in the Saudi capital Riyadh. (Getty)
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Updated 20 October 2021
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'SGI signals a new era for mankind': How the Saudi Green Initiative Forum could change the world

  • "We reject the false choice between preserving the economy and protecting the environment," says Crown Prince Mohammed Bin Salman

Since the early part of the last century, the image and fortunes of Saudi Arabia have been inextricably linked to a single element. The discovery and exploitation of oil transformed life in the KSA and positioned the country front and center in the petrol-driven global economy.

But times have changed over the last two decades. There is a recognition that oil and its derivatives, such as plastic and petrochemicals, are a primary cause of global warming, pollution and environmental catastrophe. In the KSA, air pollution from greenhouse gases shortens life expectancy by 1.5 years, while desertification and dust storms cause $13 billion of damage per year.

This bleak picture is a wake-up call, triggering a seismic shift across the world, away from carbon-sourced energy and hyper-consumption towards a cleaner and more sustainable way of life.

An energy leader for decades, the KSA is now positioning itself at the vanguard of environmental action. This effort is encapsulated in the Saudi Green Initiative (SGI) – a national program to combat pollution and land degradation, increase vegetation cover, reduce carbon emissions and preserve marine life.

“The Kingdom fully recognizes its share of responsibility in advancing the fight against the climate crisis. Just as the Kingdom underpinned energy markets during the oil and gas era, it is going to become a global leader in forging a greener world,” says Crown Prince Mohammed Bin Salman, patron of the SGI.

Having introduced the concept of the Circular Carbon Economy (a closed-loop system involving ‘4Rs’: reduce, reuse, recycle and remove) during its presidency of the G20 summit last year, Saudi Arabia is again taking a leadership role by hosting the forthcoming SGI Forum, to be held in Riyadh on 23-24 November.

The forum will, in its own words, “catalyze climate action in a regionally and internationally coordinated manner . . . bring together heads of state, public officials, business leaders, academic pioneers and environmental specialists. . . and drive action and spark innovative solutions to help tackle climate change.”

The event will help to define a road map that seeks to rally the Gulf region and contribute to agreed global targets by confronting climate change, increasing the use of clean energy, offsetting the impact of fossil fuels and protecting the environment.

The SGI is hugely ambitious. Ten billion trees are to be planted in the Kingdom over the next decade, rehabilitating some 40 million hectares of degraded land and bringing about a 12-fold increase from current tree covers. This is equal to four percent of the global initiative to limit the degradation of land, and one percent of the target to plant one trillion trees globally.

The percentage of protected areas in Saudi Arabia will reach over 30 percent of total land – about 600,000 square kilometers — exceeding the global target of 17 percent. Carbon emissions will be reduced by 130 million tons brought about by a plan to generate 50 percent of the Kingdom’s energy from renewables by 2030; and landfills – where 95 percent of waste is currently deposited — will be reduced to only five percent of waste.

In fact, the very notion of ‘garbage’ will become largely a thing of the past, as every form of waste becomes the raw material for a value-added product or energy source, in what is a key part of the ‘circular economy’ concept.

The SGI will work in tandem with the broader Middle East Green Initiative, which includes all GCC states along with other regional countries. The overall goal is to plant 50 billion trees across the Middle East — the largest reforestation program in the world, restoring 200 million hectares of degraded land. Carbon emissions from the region are to be reduced by over 60 percent, equal to more than 10 percent of the intended global reduction.

While Saudi citizens are used to a comfortable life of big cars and disposable products, it is clear that the SGI is already having a profound cultural impact.

“I think the SGI will open up a whole new era for mankind,” Ziyad Al Shiha, chief executive of the Saudi Investment Recycling Company, a leading agency in the circular economy, told Arab News.

“We're at a turning point now and it’s part of a major shift in the world economy. We are putting investment on the ground, working with corporations, small and medium-sized enterprises and with individuals — anything that will contribute to the circular economy.”

The greening of Saudi Arabia will involve changes to the daily lives of ordinary people, and an entirely new mindset. It will be young people, in particular, who forge a new path away from the habits of the past few decades.

“The SGI is an initiative by our government for a greener future for Saudi and the Middle East,” Fatimah Ahmad, a young Saudi professional translator, told Arab News.

She added: “The KSA is taking the lead to protect tomorrow from the climate change crisis. It’s one of the Vision 2030 projects I am personally excited about. It’s an ambitious, wild dream and I am sure it will come true very soon.”

Cynical voices might say that the decline of the oil era, and the global transition to a greener way of life, will have a detrimental effect upon the economy and standard of living in Saudi Arabia.

But Crown Prince Mohammed Bin Salman has a more positive outlook. “We reject the false choice between preserving the economy and protecting the environment,” he declared when launching the SGI in March.

He added: “Climate action will enhance competitiveness, spark innovation, and create millions of high-quality jobs. Young people, both in the Kingdom and the world, are demanding a cleaner, greener and more inclusive future, and we owe it to them to deliver on this.”

The SGI Forum will no doubt generate more ideas, greater awareness and practical solutions in the drive towards a sustainable future in Saudi Arabia and across the world.


NEOM, Saudi Red Sea Authority sign MoU to develop marine tourism regulations

Updated 03 May 2024
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NEOM, Saudi Red Sea Authority sign MoU to develop marine tourism regulations

  • The MoU’s goal is to enhance research, deliver innovation, and improve the visitor experience for tourists
  • The agreement reflects SRSA’s commitment to attracting investment in coastal tourism activities

NEOM: The Saudi Red Sea Authority and NEOM signed a memorandum of understanding on Friday to cooperate on developing legislation, regulations, and technology in marine tourism, reported the Saudi Press Agency.
The MoU’s goal is to enhance research, deliver innovation, and improve the visitor experience for tourists in Saudi Arabia’s existing, emerging, and future Red Sea coastal destinations.
SRSA Acting CEO Mohammed Al-Nasser and NEOM’s CEO Nadhmi Al-Nasr signed the partnership, which they hope will promote an exchange of expertise and enable the implementation of joint initiatives.
The agreement also reflects SRSA’s commitment to attracting investment in coastal tourism activities.
The partnership will further assist small and medium enterprises in the sector through administrative, technical, and advisory support.
Via this agreement, SRSA aims to integrate with relevant public, private, and third-sector entities to achieve one of the goals of Saudi Vision 2030, which is to develop coastal tourism as a valuable sector of the Kingdom’s economy.


World food prices up in April for second month: UN agency

Updated 03 May 2024
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World food prices up in April for second month: UN agency

PARIS: The UN food agency’s world price index rose for a second consecutive month in April as higher meat prices and small increases in vegetable oils and cereals outweighed declines in sugar and dairy products.

The Food and Agriculture Organization’s price index, which tracks the most globally traded food commodities, averaged 119.1 points in April, up from a revised 118.8 points for March, the agency said on Friday.

The FAO’s April reading was nonetheless 7.4 percent below the level a year earlier.

The indicator hit a three-year low in February as food prices continued to move back from a record peak in March 2022 at the start of Russia’s invasion of Ukraine.

In April, meat showed the strongest gain in prices, rising 1.6 percent from the prior month.

The FAO’s cereal index inched up to end a three-month decline, supported by stronger export prices for maize. Vegetable oil prices also ticked higher, extending previous gains to reach a 13-month high due to strength in sunflower and rapeseed oil.

The sugar index dropped sharply, shedding 4.4 percent from March to stand 14.7 percent below its year-earlier level amid improving global supply prospects.

Dairy prices edged down, ending a run of six consecutive monthly gains.

In separate cereal supply and demand data, the FAO nudged up its estimate of world cereal production in 2023/24 to 2.846 billion metric tonnes from 2.841 billion projected last month, up 1.2 percent from the previous year, notably due to updated figures for Myanmar and Pakistan.

For upcoming crops, the agency lowered its forecast for 2024 global wheat output to 791 million tonnes from 796 million last month, reflecting a larger drop in wheat planting in the EU than previously expected.

The revised 2024 wheat output outlook was nonetheless about 0.5 percent above the previous year’s level.


Material sector dominates TASI trading in first quarter of 2024

Updated 03 May 2024
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Material sector dominates TASI trading in first quarter of 2024

RIYADH: The materials sector led trading on Saudi Arabia’s Tadawul All Share Index, accounting for approximately SR87 billion ($23.2 billion) or 15.11 percent of the market, according to TASI’s 2024 first-quarter report.

SABIC, the largest component of this sector, boasted a market capitalization of SR234.9 billion, with trading value reaching nearly SR7 billion.

The banking sector trailed with transactions valued at SR71.22 billion, comprising 12.37 percent of the market. Al-Rajhi Bank took the lead in market capitalization within the sector and secured the second spot in trade value totaling SR23.62 billion.

In a February report by Bloomberg, Al-Rajhi Bank, seen as an indicator of Saudi Arabia’s growth strategies, exceeded the performance of JPMorgan Chase & Co., exhibiting nearly a 270 percent surge in shares since the initiation of Vision 2030. It has outpaced both local and global competitors, including state-supported banks, emerging as the largest bank in the Middle East and Africa, boasting a market cap of around $95 billion.

According to Morgan Stanley analysts led by Nida Iqbal, as reported by Bloomberg, “We see it as a long-term winner in the Saudi bank sector… While Al-Rajhi is best placed for a rate-cutting cycle, we believe current valuation levels reflect this.” 

Gulf central banks, including Saudi Arabia’s, frequently align their policies with those of the Federal Reserve to maintain their currency pegs to the dollar. According to Bloomberg Intelligence senior analyst Edmond Christou, a reduction in Fed rates could potentially bolster Al-Rajhi Bank’s profitability and expansion, as it will encourage gathering cheap deposits while enabling it to issue debt at more attractive levels.

In this period, the energy sector secured the third position in terms of value traded, reaching SR55.4 billion. Saudi Aramco topped the list with a market capitalization of SR7.47 trillion and registered the highest value among companies traded on the index, totaling SR28.82 billion.

In March of this year, Aramco announced a net income of $121.3 billion for its full-year 2023 financial results, marking the second-highest in its history. Aramco credited these results to its operational flexibility, reliability, and cost-effective production base, underscoring its dedication to delivering value to shareholders.

Tadawul’s quarterly report also indicated that the transportation sector recorded the fourth-highest value traded at SR39.25 billion, equivalent to 6.82 percent of the market. Among the top performers in this sector was cargo firm SAL Saudi Logistics Services, ranking third in value traded on the TASI during this period, following Aramco and Al-Rajhi Bank, with a total value of SR22.74 billion.

SAL debuted on the main market of the Saudi Exchange in November last year. With aspirations to manage 4.5 million tonnes of air cargo by 2030, Saudi Arabia is empowering its logistics sector from a supportive role to a pivotal driver of economic growth.

SAL, in which the Saudi government holds a 49 percent stake through the Saudi Arabian Airlines Corp., experienced a 30 percent surge in its share price during its initial public offering, raising $678 million and becoming Saudi Arabia’s second-largest IPO of the year.

In a January report by Forbes, SAL’s CEO and Managing Director Faisal Al-Beddah emphasized the company’s potential to shape the future of logistics in Saudi Arabia and beyond. He stated: “Logistics is the backbone of any economy. Now we are ready. We have the rotation, we have the infrastructure, we have the regulations, and most importantly, we have the mindset and the technology for Saudi Arabia to be the leading connecting logistics hub in the region.”

The top gainer during this period in terms of price appreciation was MBC Group, with a quarter-to-date percentage change of 127.6 percent, according to Tadawul.

Saudi Arabia’s MBC Group, a media conglomerate, debuted as the first new listing on TASI in 2024. Its trading began on Jan. 8. The company raised SR831 million through its initial public offering.

Saudi Steel Pipes Co. in the materials sector was the second highest gainer, with price appreciating by 88.15 percent.

Etihad Atheeb Telecommunication Co. had a QTD price percentage change of 81.91 percent making it the third-highest gainer on the exchange during this period.

TASI concluded the first quarter of 2024 with a 3.6 percent increase, climbing by 435 points to reach 12,402 points.


Saudi startups raised $3.3bn in last 10 years, says report

Updated 03 May 2024
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Saudi startups raised $3.3bn in last 10 years, says report

  • MAGNiTT report shows fintech emerged as the most funded sector in Kingdom

RIYADH: Startups in Saudi Arabia saw massive growth during the last decade raking in $3.3 billion in venture capital funding, according to a report issued by MAGNiTT.

The data platform, in its “10 Years Saudi Arabia Founders Report” sponsored by Saudi Venture Capital Co., provides an in-depth analysis of the backgrounds, experiences, and expertise of founders. 

“MAGNiTT initially published a report on founders in the MENA VC ecosystem in 2018, focusing on uncovering the DNA of successful entrepreneurs in the region. Today, in partnership with the Saudi Venture Capital Co., we present a comprehensive report on the founders of the top 200 funded startups in the Kingdom over the last ten years,” said Philip Bahoshy, CEO and founder of the platform. 

“By shedding light on founders’ experiences in the Saudi ecosystem, we aim to dispel myths around founders, empower aspiring entrepreneurs looking to establish their ventures in the Kingdom, guide government decision-makers in shaping policies conducive to innovation, and provide invaluable intelligence to investors seeking opportunities in the region,” he added. 

SVC CEO Nabeel Koshak emphasized the remarkable growth and dynamism in the Saudi startup landscape. 

FASTFACTS

Forty-four percent of these startups were launched by teams with two founding members, who together secured 53 percent of the total funds. 

Startups founded by a single individual accounted for 30 percent of the funded startups but only captured 15 percent of the funding in the last decade. 

Thirty-six percent of the 400 founders analyzed had at least 10 years of work experience before launching their respective startups.  

Fifty-nine percent of founders had technical education backgrounds, highlighting science, technology, engineering, and mathematics. 

Thirty-nine percent of founders held degrees in business, contrasting with the global average of 19 percent, according to an Endeavor Insight study. 

“The Kingdom’s strategic initiatives, driven by the Saudi Vision 2030, have laid a solid foundation for innovation, entrepreneurship, and investment. As a result, we have seen a surge in startup activity, with a growing number of ambitious founders seizing opportunities and driving innovation across various sectors,” he said. 

“The goal of the report is to provide policymakers, government officials, and investors with insights and data to inform strategic decisions and policies to further nurture the startup ecosystem for the next 10 years,” Koshak added. 

A decade of funding 

Compiling data from the 200 Saudi-based startups, which collectively raised a total of $3.3 billion from 2014 to 2023, the report highlighted that 44 percent of these startups were launched by teams with two founding members, who together secured 53 percent of the total funds. 

He further stated that with the significant support for innovation, the Kingdom is set to witness the emergence of more unicorns. 

In contrast, startups founded by a single individual accounted for 30 percent of the funded startups but only captured 15 percent of the funding in the last decade. 

Notably, 36 percent of the 400 founders analyzed had at least 10 years of work experience before launching their respective startups.  

The report also indicated a trend toward entrepreneurship among less experienced founders, with 66 percent being first-time startup founders and only 30 percent with previous regional startup experience. 

It revealed a significant gender disparity in the VC landscape within Saudi Arabia, with male founders comprising 94 percent of the total 400 individuals, while female founders accounted for only 6 percent.  

This gender gap is considerably wider than the global norms, where, according to research by Startup Genome conducted between 2016 and 2022, the average proportion of female founders in an ecosystem was 15 percent. 

Additionally, only 7 percent of solo founders were female, and there were no recorded startups with two or more female founders only.  

However, as the number of founders per startup increased, so did gender diversity, albeit slightly. In startups with three founders, 18 percent were of mixed gender, while in startups with four or more founders, the figure was 12 percent. 

Furthermore, 91 percent of male-only founded startups claimed 98 percent of total funding. Conversely, 3 percent of female-only founded startups accounted for 0.4 percent of the total funding. 

Founders' education 

The report further delved into the education qualification of founders revealing that 55 percent in the Kingdom had attained at least a bachelor’s degree.  

In terms of technical development, 59 percent of founders had technical education backgrounds, highlighting science, technology, engineering, and mathematics. 

Thirty-nine percent of founders held degrees in business, contrasting with the global average of 19 percent, according to an Endeavor Insight study. 

Over half of the 400 founders obtained their degrees internationally, while 22 percent held both international and local degrees. 

King Saud University, King Fahd University of Petroleum and Minerals, and King AbdulAziz University were among the most common institutions for startup founders. 

Seven of the top 10 universities of Saudi founders that raised funding were public institutions.

The top international schools of Saudi founders had Stanford and Harvard among the top choices, mirroring global trends. 

Professional experience 

Despite fintech being the most funded sector, only 7 percent of founders had experience in finance, and 18 percent in banking, which is lower compared to the 48 percent with backgrounds in information technology.  

Additionally, even fewer founders, only 12 percent, had experience in e-commerce, despite this industry accounting for the highest share of deals, 20 percent, closed by the top 200 Saudi startups. 

The report also revealed that 36 percent of the founders in Saudi Arabia are skilled professionals with over 10 years of experience before starting their businesses.  

Notably, Saudi Aramco was the most common previous employer among the funded founders, with 7 percent having worked there before launching their startups. 

Furthermore, McKinsey and Microsoft were among the top 10 companies where the 400 founders covered in this report had previously been employed.  

The majority of these founders held significant leadership roles, with 31 percent having served as a founder, co-founder, or board member. Only 4 percent originated from entry-level positions. 

The report also pointed out: “While Saudi Arabia has witnessed several serial entrepreneurs, 66 percent of founders in the last decade were first-time founders,” indicating a vibrant and growing entrepreneurial ecosystem. 


Oil prices set for steepest weekly drop in 3 months

Updated 03 May 2024
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Oil prices set for steepest weekly drop in 3 months

NEW YORK: Oil prices edged up on Friday on the prospect of OPEC+ continuing output cuts, but the crude benchmarks were headed for the steepest weekly losses in three months on demand uncertainty and easing tensions in the Middle East reducing supply risks.

Brent crude futures for July rose 14 cents to $83.82 a barrel by 0646 GMT. US West Texas Intermediate crude for June was up 16 cents, or 0.2 percent, to $79.11 per barrel.

Still, both benchmarks were on track for weekly losses as investors worried about the prospect of higher-for-longer interest rates curbing growth in the US, the top global oil consumer, and in other parts of the world.

“With the US driving season almost upon us, high inflation may see consumers opt for shorter drives over the holiday period,” analysts at ANZ Research said in a note on Friday.

The market is now looking towards US economic data and indicators of future crude supply from the world’s top producer.

The US Federal Reserve held interest rates steady this week, and flagged recent disappointingly high inflation readings that could make rate cuts take awhile in coming.

Geopolitical risk premiums due to the Israel-Hamas war, which had kept prices high due to global supply risks, are also fading, with Israel and Hamas considering a temporary ceasefire and holding talks with international mediators.

Brent headed for a 6.3 percent weekly decline, while WTI moved toward a loss of 5.6 percent on the week.

The drop comes just weeks ahead of the next meeting of the Organization of the Petroleum Exporting Countries and allies led by Russia, together called OPEC+.

Three sources from OPEC+ producers said the group could extend its voluntary oil output cuts of 2.2 million barrels per day beyond June if oil demand fails to pick up, but the group has yet to begin formal talks ahead of the June 1 meeting.