Why The UAE Is On Track To Lead The Purpose Economy

Economies globally are today evolving beyond financial success, embracing a model where businesses generate value for both society and the planet. This transformation is shaping what is known as the “purpose economy,” an approach that integrates profitability with social and environmental impact.  

For the UAE, which is is advancing toward its “We the UAE 2031” vision and national strategies by driving innovation, economic diversification, and inclusive growth, the purpose economy presents a strategic opportunity to unlock new sources of gross domestic product (GDP) growth, create high-quality jobs for youth, and attract high-value foreign investment, all while reinforcing its global leadership in sustainable development. 

What Is The Purpose Economy? 

The purpose economy represents an evolution in business strategy, where companies actively contribute to solving global challenges such as climate change, inequality, and resource sustainability while maintaining strong commercial performance. This shift is gaining momentum globally, with a key driver of the purpose economy being impact investment, which refers to investments made with the intention to generate measurable social and environmental impact alongside a financial return. Unlike traditional philanthropy, impact investing mobilizes capital toward businesses that address critical issues such as clean energy, financial inclusion, and sustainable agriculture, while remaining commercially viable. 

Impact investing plays a crucial role in channeling capital into businesses that generate both financial returns and measurable positive change. The impact investment market is now valued at US$1.57 trillion highlighting a growing recognition that businesses can be both profitable and purpose-driven. In addition, more than 40 percent of new startups worldwide are integrating sustainability into their business models. Yet, despite this momentum, the Middle East attracts just two percent of global impact investment, signaling an untapped opportunity for the UAE to lead. 

The UAE’s Emerging Purpose Economy 

The UAE is actively advancing the purpose economy through a combination of government initiatives, investment funds, and supportive policies. For example, the UAE’s Future 100 initiative is identifying and backing high-potential startups, with its second edition in 2025 showcasing a rising number of ventures focused on sustainability and impact-driven business models, contributing to the country’s future economic sectors. 

Similarly, at the investment level, the Alterra Fund, a $1 billion vehicle launched at the 28th edition of the Conference of the Parties of the United Nations Framework Convention on Climate Change (COP28), is accelerating climate-focused enterprises. Meanwhile, leading incubators such as Sheraa (Sharjah Entrepreneurship Center), Ma’an (a social incubator in Abu Dhabi), and Hub71 (which attracts climate tech startups in Abu Dhabi) are fostering sustainability-driven businesses with dedicated programs and funding support. 

Beyond investment and incubation, environmental initiatives such as the UAE’s Net Zero by 2050 Strategy are creating a fertile ground for sustainability-driven enterprises. The introduction of the Blue Visa, designed to attract global talent in sustainability and climate-related fields, further strengthens the UAE’s position as a hub for purpose-driven innovation. At the same time, consumer behavior is also reinforcing this shift. Nearly half of UAE consumers are purpose-driven buyers, prioritizing brands that align with their values—whether through sustainability, health-conscious offerings, or social impact initiatives. 

Through my work with MENA Impact, I have seen firsthand how businesses in the UAE and across the region are shifting toward purpose-driven models. We support companies and professionals integrating sustainability into their business strategies, equipping them with the tools, resources, and networks needed to thrive in an impact-driven economy. Demand is surging across sectors, from large corporations to SMEs and startups, as more businesses recognize the strategic and economic advantages of embedding purpose into their operations. 

The Economic Advantage Of A Purpose-Driven Economy 

Countries that have integrated purpose-driven business models into their economies have seen tangible financial and social benefits. For example, in the UK, the Purpose Dividend Report estimates that transitioning to a purpose-driven economy could increase GDP by GBP149 billion annually—a seven percent boost. 

For the UAE, embracing the purpose economy can unlock the following key economic advantages: 

• Accelerated GDP growth: Purpose-driven businesses open up new markets and revenue streams by addressing unmet social and environmental needs. On a global scale, social enterprises are significant economic contributors. According to the World Economic Forum, there are about 10 million social enterprises worldwide, generating approximately $2 trillion in annual revenue and creating 200 million jobs. By cultivating a strong base of impact-oriented companies, the UAE can boost its non-oil GDP growth, and reinforce its position as an innovation hub. 

• Job creation and talent development: The purpose economy fosters inclusive job creation, from skilled positions in green tech and fintech, to community-level entrepreneurship. Businesses built around a social mission often engage underemployed groups and develop local human capital. They also attract talent, particularly younger generations seeking alignment between their personal and professional values. 

• Foreign direct investment (FDI) attraction: Investors are increasingly channeling funds into companies that deliver both profit and purpose. Impact investing assets have surged, reflecting growing investor interest in businesses that generate both financial returns and measurable social and environmental benefits. By positioning itself as a regional leader in the purpose economy, the UAE can attract a greater share of these investments, complementing its strategy to double annual FDI to around $65 billion by 2031. 

Amsterdam presents a compelling case of a city fostering the purpose economy through an ecosystem-driven approach. The city launched Amsterdam Impact, a government initiative that connects purpose-driven businesses with investors, accelerators, and public-sector support. By strengthening collaboration across sectors, Amsterdam has positioned itself as a European leader in impact entrepreneurship, integrating social enterprises into the mainstream economy and attracting responsible investment. The UAE can adopt a similar framework, leveraging cross-sector partnerships to drive its purpose economy forward. 

Strengthening The Ecosystem: Policy And Regulation 

The UAE has made significant strides in supporting entrepreneurship and innovation, and to build on this momentum, it can further accelerate the purpose economy through tailored regulatory frameworks and government-backed incentives, including: 

• Establishing a legal framework for purpose-driven businesses: Introduce an official “impact business” designation to provide purpose-driven companies with a structured legal status, similar to France’s Entreprise à Mission or the US Benefit Corporation status. This framework would offer clarity, legal protections, and incentives, such as tax benefits and priority in government procurement for businesses meeting specific environmental, social, and governance (ESG) and social impact criteria. 

• Launching a dedicated impact investment fund: Establish an impact innovation fund through government support or public-private partnerships to provide grants, soft loans, and impact-linked financing for startups and SMEs developing solutions aligned with the UAE’s sustainability and social impact goals. 

• Simplifying licensing and compliance: Streamline regulatory processes to make it easier for purpose-driven businesses to launch and scale. This could include fast-tracking approvals and reducing licensing costs for startups and SMEs that commit to measurable social or environmental goals. 

• Encouraging corporate adoption of impact standards: Promote the integration of recognized sustainability and impact measurement frameworks, such as B Corp certification or the UAE’s national ESG reporting guidelines, to enhance transparency and accountability across businesses. 

Seizing The Opportunity 

The purpose economy is no longer a distant concept—it represents an immediate opportunity to align business success with national priorities. With the UAE targeting $65 billion in annual FDI inflows by 2031, integrating purpose-driven enterprises into investment policies could further position the country as a leading global hub for sustainable business and innovation. 

By taking these bold steps, the UAE will position the nation at the forefront of a transformative economic movement. The payoff will be a more innovative, resilient economy—one that not only achieves higher growth, but also delivers tangible social impact. This alignment of economic and societal value will solidify the UAE’s status as a global pioneer in building a purpose-driven economy for the future. 

About The Author 

Nadine Zidani is a thought leader in impact-driven business, sustainability, and purpose-driven entrepreneurship in the MENA region. She is the founder of MENA Impact, a certified B Corp in the UAE, where she empowers organizations and professionals to integrate sustainability into their business models, fostering a more resilient and purpose-driven economy. Plus, as a public speaker and host of the Impact Talk podcast, she engages with changemakers who are redefining success by aligning profit with impact.