Jordan’s ESG Balancing Act: Resilience, Reform, and the Road to Sustainability

In the heart of the Middle East—surrounded by conflict, constrained by resources, and challenged by climate—Jordan has quietly become a model of resilience and pragmatic governance. While not yet a global ESG frontrunner, the Kingdom is increasingly integrating environmental sustainability, social inclusion, and governance reform into a national strategy of survival and transformation.

Jordan’s ESG journey is shaped by necessity rather than abundance. With limited water, no oil, and a refugee population equal to nearly 30% of its residents, Jordan’s approach to ESG is not about outperforming on KPIs—it’s about building institutional depth, managing fragility, and mobilizing capital for inclusive growth.

“ESG, for Jordan, is not a trend—it’s a tool for systemic risk management,” says Zeina Toukan, Jordan’s Minister of Planning and International Cooperation. “We are using ESG not just to attract capital, but to safeguard our future.”

1. ESG in Context: A Stability Strategy in a Volatile Region

Jordan’s economic and social development rests on a fragile equilibrium:

• GDP (2024 est.): $53.7 billion

• Population: 11.5 million (including over 1.3 million refugees)

• Unemployment: 21%, youth unemployment above 40%

• Public debt: ~91% of GDP, limiting fiscal flexibility

Yet the country is known for:

• Strong institutional credibility in a turbulent region

• Deep partnerships with IMF, World Bank, EBRD, and UN agencies

• A history of political moderation and rule-of-law orientation

Jordan’s Economic Modernization Vision 2033 and Green Growth National Action Plan aim to embed ESG into public investment, private sector development, and social inclusion programs.

2. Environmental Sustainability: Adaptation in the World’s Second Most Water-Stressed Country

2.1 Water Scarcity and Climate Resilience

Jordan is ranked among the top 3 most water-scarce countries worldwide, with less than 100 cubic meters per capita per year (renewable threshold: 1,000).

Key facts:

• Over 90% of water goes to agriculture, but with only 2.7% of GDP contribution

• Non-revenue water (leakage and inefficiency): 47%

• Rising temperatures and declining rainfall threaten food security and groundwater

The government’s response:

• National Water Strategy 2023–2040 prioritizes desalination, wastewater reuse, and demand management

• The Aqaba–Amman Water Desalination and Conveyance Project (“National Carrier”)—a $2.5 billion PPP—is expected to provide 300 million cubic meters annually by 2029

• Expansion of treated wastewater reuse for agriculture is underway, supported by the European Investment Bank and USAID

“Water is not just a resource issue—it’s a national security issue,” says Dr. Raed Abu Saud, Minister of Water and Irrigation.

2.2 Decarbonization and Renewable Energy

Jordan has made significant progress in clean energy:

• 27% of electricity was generated from solar and wind in 2023

• Target: 50% renewable energy by 2030

• GHG emissions per capita: 2.2 tCO₂e—well below the global average

The Nationally Determined Contribution (NDC) commits Jordan to:

• Reduce GHG emissions by 31% by 2030 (14% unconditional)

• Electrify public transport and expand green hydrogen feasibility studies

• Integrate climate risk into municipal infrastructure planning

Challenges include:

• Grid congestion in rural areas

• Limited access to green finance for SMEs

• Delays in carbon pricing and emissions trading policies

3. Social Sustainability: Resilience Amid Demographic Pressure

3.1 Refugees, Youth, and Employment

Jordan hosts one of the world’s highest refugee populations per capita:

• Over 660,000 registered Syrian refugees (UNHCR), plus hundreds of thousands from Iraq, Palestine, Yemen, Sudan

• Youth under 30 make up 63% of the population, but youth unemployment is above 40%

• Labor force participation among women is just 14%, among the lowest globally

Social responses:

• National Social Protection Strategy (2019–2025) expands cash transfers, disability services, and health access

• Takaful Program reaches over 200,000 vulnerable families with digital cash assistance

• Government, with IFC and GIZ, launched ESG-linked youth employment guarantee pilots in 2023

3.2 Gender, Informality, and Access Gaps

Despite high educational attainment among women, social inclusion remains limited:

• Female university graduates: 55% of total

• Women in parliament: 12%

• Informal employment: ~45% of total workforce, especially in construction and retail

The National Women’s Strategy (2020–2025) aims to:

• Close the gender pay gap

• Introduce gender-responsive budgeting

• Expand childcare subsidies and flexible work laws

But implementation is still uneven, and ESG-aligned social metrics are rarely included in corporate or sovereign disclosures.

4. Governance: Institutional Maturity with Implementation Gaps

4.1 Reform-Oriented Governance

Jordan is seen as a governance reformer in the MENA region:

• Transparency International Rank (2023): 61/180

• Rule of Law Index (World Justice Project): Highest in the Arab World

• Ongoing public sector modernization with digitalisation, decentralisation, and data transparency

The 2022 Administrative Reform Plan includes:

• ESG-aligned performance metrics for public agencies

• Digitized procurement with environmental and social clauses

• Civil service reform to improve delivery in health, education, and infrastructure

4.2 ESG Regulatory Framework

Jordan’s ESG ecosystem is still emerging:

• No national ESG taxonomy yet, but working with UNDP and IFC on draft frameworks

• ESG reporting is voluntary for listed firms, guided by Amman Stock Exchange (ASE)

• The Jordan Securities Commission (JSC) is drafting climate-related financial disclosure guidelines

In 2024, the Jordan ESG Platform was launched—a public-private dashboard to track:

• Carbon intensity by sector

• Gender inclusion in firms

• Social investment by public-private partnerships

5. ESG Finance and Capital Markets

5.1 Green Bonds and Blended Finance

Jordan is expanding its sustainable finance toolkit:

• The first green bond, a $100 million issue by the Ministry of Finance, is expected in 2025

• Sustainable Sovereign Financing Framework, developed with the World Bank, links public investment to SDGs

• The Green Growth Fund, launched in 2023, blends public and private capital for ESG-aligned SMEs

5.2 Capital Market Integration

The Amman Stock Exchange (ASE) is:

• Requiring ESG disclosures for flagship index inclusion

• Hosting ESG capacity-building workshops for listed firms

• Planning an ESG Index by 2026

Major banks (e.g., Arab Bank, Cairo Amman Bank) are:

• Integrating green credit lines

• Working with EBRD and IFC on ESG risk screening tools

• Supporting green mortgages and SME clean energy loans

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6. ESG Case Studies: Jordanian Pioneers

Case Study 1: Hikma Pharmaceuticals – ESG in Industry

• Jordan’s largest multinational

• Published TCFD-aligned sustainability report in 2023

• Embeds ESG KPIs into supply chain and R&D

• Targets net-zero across Scope 1–2 emissions by 2035

  
  

Case Study 2: EDAMA – Clean Energy Cluster

• Public-private platform of 60+ companies

• Focus on solar, wind, energy efficiency, and green jobs

• Partners with GIZ and UNIDO on ESG-linked vocational training

• Advocates for SME access to green finance and ESG compliance tools

Case Study 3: Greater Amman Municipality – Urban ESG

• Introduced first urban climate action plan (2022)

• Converting 20% of municipal fleet to EVs by 2026

• Launched green building codes tied to permit approvals

• Building Jordan’s first climate-resilient public park in Marka district

7. Comparative ESG Positioning (MENA and Global South)

Indicator (2023)	Jordan	Morocco	Lebanon	Greece
Net-zero target	2050	2050	No target	2050
Renewable electricity share (%)	27%	19.4%	11%	45%
ESG disclosure regulation	Voluntary	Partial	None	Mandatory
Female labor force participation (%)	14%	21.8%	23%	48%
Green bond issuance (USD million)	Planned	1,200	—	7,100
Gini coefficient	0.33	0.39	0.32	0.34

8. Strategic ESG Risks and Opportunities

Risks

• Water stress and climate shocks threaten food and energy systems

• Fiscal constraints limit green infrastructure investment

• Youth disillusionment and high informality rates undermine social cohesion

• ESG data quality and standardization remain weak

Opportunities

1. Finalize a national ESG taxonomy aligned with SDGs and EU standards

2. Issue a sovereign green or sustainability bond to finance climate-resilient infrastructure

3. Mandate ESG disclosures for state-owned enterprises and listed firms

4. Expand ESG-linked vocational training and youth employment programs

5. Digitize ESG data platforms for municipal-level climate and social impact tracking

   
   
   
   
   
   

Conclusion: ESG as Jordan’s Next Policy Frontier

For Jordan, ESG is not just a reporting requirement—it is an economic lifeline, a social stabilizer, and a diplomatic asset. The Kingdom’s strength lies in its institutional resilience, reform orientation, and deep partnerships.

If Jordan can align its economic modernization strategy with ESG principles—not only in finance and energy but across water, inclusion, and governance—it may well become a regional model for ESG transition in fragile states.