Zain, Bitel, and National Bank Lead in Sustainability Performance

Munaakh for Studies and Research announced the results of the Munaakh Sustainability Index 2025, published by the company for the third consecutive year to classify the sustainability performance of listed companies on the Kuwait Stock Exchange. Three companies received an AA (Advanced Sustainability) rating: Zain Group for Telecommunications, Kuwait Finance House, and National Bank of Kuwait. Six companies received an A (Achieved Sustainability) rating: Boubyan Bank, Warba Bank, Burkan Bank, Ooredoo Kuwait, Al Mubarak Company, and the Kuwait Stock Exchange.

The number of companies classified in the 2025 Munaakh Sustainability Index rose by 65% compared to 2024, with the index now covering 43 listed companies on the Kuwait Stock Exchange, including 38 in the First Market and five in the Main Market.

The 2025 results showed full compliance with the Capital Markets Authority’s decision mandating listed companies in the First Market to issue sustainability reports. This represents a significant shift within one year: in 2024, when disclosure was not mandatory, only 21 of the First Market companies included in the index issued sustainability reports. In 2025, with the decision taking effect, that number rose to 38 companies, representing all listed companies in the First Market.

This corporate commitment to the decision underscores the effectiveness of the regulatory framework in entrenching sustainability disclosure practices. Furthermore, expanding the mandate to include Main Market companies will help solidify sustainability practices among a broader segment of listed firms. Mandatory disclosure does more than just publish data; it drives companies to build the substance behind their disclosures: governance and oversight committees at the board level, ethics and compliance policies, corporate responsibility and human capital development programs, and systems for measuring environmental impact. Thus, regulation serves as an entry point to practice, not just to reporting.

Four of the nine companies with advanced classifications led their respective sectors on the Kuwait Stock Exchange: Zain Group for Telecommunications in the telecommunications sector, Kuwait Finance House in the banking sector, Al Mubarak Company in the real estate sector, and the Kuwait Stock Exchange in the financial services sector.

Index results also indicate that sustainability disclosure is no longer a differentiating factor among advanced companies, as all nine publish annual sustainability reports aligned with recognized international frameworks and disclose their emissions. Differentiation among these companies now hinges on the reliability of disclosed data, specifically the linkage of targets to measurable baselines, the independent external assurance of emissions data, and the reliance on board-level committees for sustainability oversight.

For the remaining companies, the results confirm that the next phase is no longer about proving the existence of disclosure, but rather entrenching its reliability: subjecting emissions data to independent external assurance, linking environmental targets to measurable baselines, and assigning sustainability oversight to board-level committees. These specific areas represent the widest scope for progress for listed companies ahead of the 2026 issuance.

**Banks and Telecommunications**

Advanced classifications were concentrated in the banking and telecommunications sectors, with the banking sector accounting for five of the nine companies and the telecommunications sector for two. This reflects a deeper adoption of sustainability concepts in these sectors, translated into actual practices, alongside stricter regulatory oversight and maturity in disclosure. Meanwhile, several sectors included in the index recorded no companies in the advanced classifications.

The results revealed a pattern applicable to most listed companies in the index: the environmental pillar is the weakest among the three pillars for 27 out of 43 classified companies. This means that while listed companies have made progress in sustainability governance and measuring their social impact, measuring environmental impact remains the most prominent challenge for companies in the coming phase.

**Advanced Sustainability**

An AA rating indicates that a company’s performance is advanced across all three pillars—environment, society, and governance—and that its declared commitments are coupled with what it can prove: targets with baselines, data subject to independent external assurance, and board-level oversight, with only minor areas for improvement that do not undermine the overall framework’s robustness.

The three companies—Zain Group, Kuwait Finance House, and National Bank of Kuwait—achieved this classification through different paths, distributed among environmental measurement, depth of social structure and governance, and sustainable finance, sharing the commonality of linking their declared commitments with verifiable data.

**Achieved Sustainability**

An A rating means a company has an established and effective sustainability system: stable programs, reliable governance, and regular annual disclosure aligned with international frameworks. What separates them from the higher category is not the absence of practice, but its incompleteness or lack of verification: either because one of the three pillars lags behind the others, or because some of their data has not yet undergone independent external assurance, or because their targets are not linked to measurable baselines. This category includes six companies, three of which are from the banking sector, reflecting its strong presence at the top of the index.

**Boubyan Bank: Wage Equity**

Boubyan Bank received an A rating based on the consistency of its disclosure, having issued its sixth consecutive sustainability report, disclosing Scope 1 and 2 emissions and selected categories of Scope 3. The bank applies climate scenario analysis within its Internal Capital Adequacy Assessment Process (ICAAP) under two pathways, RCP 2.6 and SSP 1-2.6, through semi-annual stress tests covering physical and transition risks. The bank also adopted a sustainable finance framework that assigns sustainability scores to counterparties on a quarterly basis, integrating them into credit application assessments. It also disclosed, according to GRI 405-2, complete wage equity between genders across the bank (a 1:1 ratio) for all employee categories. The report explicitly states that sustainability data has not undergone external assurance, representing the bank’s primary development opportunity.

**Warba Bank: Financial Inclusion**

Warba Bank’s A rating was based on its sustainable finance instruments, following the issuance of Kuwait’s first sustainable sukuk worth $500 million, with total allocated financing reaching $452.6 million. Its sustainable finance framework received a second-party opinion from Sustainalytics confirming alignment with ICMA principles, while the bank subjected the allocation of these funds to limited assurance from KPMG confirming compliance with the framework. The sustainability report itself did not undergo external assurance. Governance is its strongest pillar, with no sustainability-related fines recorded in Kuwait during the year. The bank is also distinguished in financial inclusion through its “Sidi” account—the first digital financing product in Kuwait dedicated to domestic workers—and interest-free educational financing.

**Burkan Bank**

Burkan Bank continues the banking sector’s presence in this category, based on integrating climate into credit risk management. The bank integrated climate scenario analysis into its Internal Capital Adequacy Assessment Process (ICAAP) and stress tests since 2022, based on Bank of England (CBES 2021) and Network for Greening the Financial System (NGFS) scenarios. These assessments apply to the entire existing portfolio and are reported semi-annually to the Central Bank of Kuwait. It also included sustainability risk assessment in corporate credit evaluations for exposures exceeding KD 10 million, covering approximately 69% of its corporate portfolio value, and supported sustainability-linked projects worth KD 23.5 million. The bank recorded no corruption cases during the year, and all its employees affirmed compliance with the anti-corruption and ethics policy.

**Ooredoo Kuwait**

Outside the banking sector, Ooredoo Kuwait became the second telecommunications company to reach advanced classifications, confirming that maturity in disclosure in the sector is not limited to a single company. The company expanded its emissions measurement from Scopes 1 and 2 to include its five operating companies in Kuwait, Algeria, Tunisia, Palestine, and the Maldives. It included emissions from its websites in Scope 3 for the first time, noting that measuring this across the value chain is not yet complete. The company adheres to Ooredoo Group’s five-year targets for 2025–2029, including improving energy efficiency by 10% measured in kWh per gigabyte. It recorded measurable gains in network efficiency, links executive management performance indicators to sustainability targets, and all five of its operating companies underwent training and capacity-building programs on IFRS S1 and S2 standards in preparation for disclosure under them.

**Al Mubarak Company: Leading the Real Estate Sector**

Al Mubarak Company stands alone at the top of the real estate sector as the only company in the sector to achieve an A rating, in a sector where disclosure quality varies more widely than in other index sectors. Its rating is based on completing the first comprehensive inventory of its emissions across its entire portfolio, covering its six assets in Kuwait, Bahrain, and Saudi Arabia, including Scopes 1 and 2 and material categories of Scope 3, with 2025 adopted as the baseline year for determining carbon intensity reduction targets until 2030. The company exceeded its energy consumption reduction target, achieving a 10% reduction against a 3% target. Projects with LEED certification or preliminary accreditation accounted for 40.55% of the portfolio by square meter. It signed Kuwait’s first green financing agreement worth KD 25 million with National Bank of Kuwait to finance a project in Sabah Al-Ahmad City. Its ninth sustainability report underwent limited independent assurance covering a specific set of GRI disclosures, not extending to Scope 1, 2, and 3 emissions data.

**Kuwait Stock Exchange: Leading Financial Services**

The Kuwait Stock Exchange led the financial services sector with an A rating, recording no corruption cases, discrimination incidents, or work-related injuries during 2025. The company applies a sustainability risk management framework based on the COSO methodology, with reports regularly submitted to the board-derived risk committee. It issued its fifth annual sustainability report according to GRI standards, SASB standards for the exchange sector, and Sustainable Development Goals, incorporating elements of International Sustainability Standards Board (ISSB) requirements within a gradual adoption approach, and a double materiality assessment measuring the impact of sustainability issues on the company’s business and the impact of its activities on the environment and society. The Kuwait Stock Exchange published a sustainability disclosure guide for listed companies, releasing its updated version this year in light of the Capital Markets Authority’s mandate for First Market companies to issue sustainability reports, including ISSB standards and extended guidance on Scope 3 emissions and double materiality.

**Industrial Sector: The Most Prominent Gap in 2025 Results**

The results of classified companies in the industrial sector represent the most prominent gap in the 2025 Munaakh Index results. The sector includes seven classified companies, none of which reached the advanced categories, making it the largest sector in the index with no advanced-rated companies. Additionally, the environmental pillar is the weakest among its three pillars, a fact of particular significance in a sector where environmental impacts are inherent to the activity, from energy and water consumption to direct emissions and industrial waste management.

The gap in the industrial sector relates more to measurement and disclosure than to operational performance itself. Most companies in the sector lack a complete emissions inventory across all scopes, environmental targets linked to baselines, and independent external assurance for disclosed data. Considering that these elements are practically available to industrial companies, their adoption would have a tangible impact on the sector’s classifications within one year, as demonstrated by companies in other sectors that moved from partial disclosure to complete inventory within a single evaluation cycle.

Progress in this aspect for the industrial sector extends beyond the impact on classification. The sector is one of the main pillars of the national economy, and developing its environmental practices is directly linked to Kuwait’s climate goals and the targets of the “New Kuwait 2035” vision.

**Updated Evaluation Methodology**

The index results were based on Munaakh’s updated methodology (Version 2.1), which evaluates and measures each company’s performance according to a fixed framework of fourteen sub-criteria distributed across the environmental, social, and governance pillars, based solely on public disclosure. The scores of these criteria are aggregated into pillar scores, then integrated with weights according to each sector. The methodology aligns with GRI, SASB, TCFD, MSCI frameworks, Sustainable Development Goals, and the Kuwait Stock Exchange’s sustainability disclosure guide.

**Zain for Telecommunications: Highest Rated in the Index**

Zain Group for Telecommunications topped the 2025 Munaakh Sustainability Index and the telecommunications sector, based on a climate management program that is the most complete among classified companies. According to the company’s sustainability report, Zain adheres to carbon neutrality targets endorsed by the Science Based Targets initiative (SBTi) and disclosed verified emissions reductions. Its Scope 1, 2, and 3 emissions all underwent reasonable assurance—the highest level of assurance—from Ernst & Young - Al-Obaidan, Al-Asimi & Partners, which also provided limited assurance on the rest of the report’s disclosures. The company issues its disclosures according to combined GRI, SASB, and TCFD frameworks, and recorded no corruption cases, discrimination incidents, or confirmed data breaches during the year. Zain is the strongest performer in the index in both environmental and social pillars.

**Kuwait Finance House: Highest-Rated Bank**

Kuwait Finance House’s rating was based on the depth of its institutional structure in the social and governance fields. According to the bank’s sustainability report, it implemented more than 200 initiatives during the past year under a shared value program distributed across five strategic pillars. Among its key social commitments was a pledge of KD 18 million to the Heart Diseases and Research Center at Mubarak Al-Kabeer Hospital, and allocating more than KD 20 million to the Defaulters’ Debt Settlement Fund in cooperation with the Ministry of Justice. Regarding governance, the bank incurred no fines, penalties, or settlements related to corruption, while its investments in sustainable and green sukuk reached KD 376 million ($1.221 billion), representing a 30.66% year-on-year growth. Kuwait Finance House’s disclosure in the governance pillar is the strongest among classified companies in this year’s evaluation across all sectors, placing it at the top of the banking sector.

**National Bank of Kuwait: Sustainable Finance**

National Bank of Kuwait completes the advanced sustainability category from the perspective of sustainable finance. Its sustainable assets reached $6.11 billion, a 23% year-on-year growth, on track toward its $10 billion target by 2030. The bank operates under a sustainable finance framework aligned with ICMA standards and subject to a second-party opinion from S&P Global. The bank reduced its operational emissions by 37.35% compared to a 2021 baseline, exceeding its interim 2025 target of 25%. Its tenth annual sustainability report underwent limited double assurance: verification of its emissions inventory conducted by Ambre, and limited assurance on the information presentation in the report by FPRH, reflecting a continuous record of disclosure over a full decade.