A sustainability claim about a Kuwait project is a legal statement as well as a marketing one. It may be read by the Environment Public Authority, by the Capital Markets Authority, by a bank, by a public entity that awarded a contract, or by a court. Several Kuwaiti texts apply at once: Law No. 42 of 2014 on environmental protection, the sustainability rules in Module Twelve of the Executive Bylaws of Law No. 7 of 2010, Law No. 39 of 2014 on consumer protection, Law No. 116 of 2014 on public-private partnership projects and the Companies Law, Law No. 1 of 2016. Our standing advice is to build the evidence file first and write the public claim second, so that each sentence can be traced to a record, a method and an owner.
Define what the claim covers
Before calling a Kuwait project sustainable, specify the site, the activities, the period and the measured indicator. Electricity use in one building is not the footprint of its supply chain. Separate achieved results from targets, and say whether construction phases or occupied space changed during the comparison. Name whose operations the figures include and whether they are measured actuals or estimates.
The boundary matters legally because Article 22 of Law No. 39 of 2014 prohibits advertising the sale, offer, supply or promotion of goods or services by any means that contains false information or data. A claim with a boundary wider than the file supports can be false even when each figure is arithmetically right. When we review a claim we ask what the reader will understand it to cover, and we narrow the words until the evidence matches.
The Kuwaiti legal map for an ESG claim
No single Kuwaiti statute is an ESG law. Environmental duties sit in Law No. 42 of 2014, which established the Environment Public Authority and its Executive Bylaw. Listed-company reporting sits in Module Twelve (Listing Rules) of the Executive Bylaws of the Capital Markets Authority, issued under Law No. 7 of 2010. Public statements to customers and investors fall under Law No. 39 of 2014 and the securities rules. Contracts with public entities follow Law No. 116 of 2014 and the project agreement itself.
Which texts apply depends on who is speaking and to whom. A listed company on the Premier Market has a mandatory reporting duty. An unlisted developer making a green claim in a brochure is mainly exposed under the consumer and advertising rules and under its contracts. A bank follows the Central Bank of Kuwait's sustainable finance circular, No. 2/BS/IBS/500/2022, which requires banks to publish a sustainability report or a dedicated section in the annual report. We map the speaker before we map the claim.
Environmental permits and impact assessment
Article 16 of Law No. 42 of 2014 prohibits starting any project, or making alterations or expansions to an existing activity, or obtaining any license for it, before an environmental impact assessment has been carried out under the rules in the Executive Bylaw. Article 128 punishes a violation of Article 16 with a fine of between KWD 5,000 and KWD 50,000. A project that markets itself as green but skipped its assessment has a weaker position than one with a clean permit record.
The Law also requires approval of the Authority for any firm, office or laboratory that offers environmental consultancy or environmental auditing services, so the consultant who signs an assessment or audit should hold that approval. Article 18 requires installations to comply with the engineering and environmental regulations in the Executive Bylaw, and Article 19 obliges every installation to protect workers from emissions or leaks. We list each permit, its date, its issuing body and its conditions, and we check that the public claim does not contradict a condition.
Sustainability reporting for listed companies: CMA Circular 4/2025
Module Twelve of the Executive Bylaws of Law No. 7 of 2010 contains the sustainability report rules in Article 1-17 and its sub-articles. A listed company may issue an annual sustainability report, which must show the impact of its activities on the environment, society and the economy, and the related risks and opportunities. The Authority is notified of the report and it is published on the Exchange website. The same module requires the report to be clear and accurate and to follow one or more international sustainability reporting standards.
On 12 February 2025 the Capital Markets Authority issued Circular No. 4 of 2025 to companies listed on the Premier Market. It states that disclosure of the sustainability report becomes mandatory for them from 2026, relying on the Module Twelve provision that lets the Exchange require disclosure in a market segment on the Authority's instructions. Boursa Kuwait's 2026 ESG Disclosure Guide, published on 15 March 2026, refers to reports for the 2025 financial year and to ISSB standards IFRS S1 and IFRS S2. We confirm the current deadline with the Exchange before a client plans its calendar.
Materiality, scope and the standards behind the report
Module Twelve sets four points for a sustainability report. It must follow one or more international reporting standards, describe its scope and how the scope was set, identify the company's most important environmental, social and economic topics through a materiality assessment that engages stakeholders, and describe how each material topic is handled. The company may obtain external assurance, in which case the assurance report is included in the sustainability report.
This gives a lawyer a practical test. If a report states a topic as material, the file should show who was consulted and why. If it names a standard, the indicators should follow that standard's definitions. Boursa Kuwait's guide remains advisory in nature, and it was issued under CMA Resolution No. 136 of 2022 on sustainable finance requirements. Advisory content is still evidence of what the market treats as good practice, and a misleading report is harder to defend when it ignores the guide without explanation.
Keep data beside the method
Gather permits, readings, invoices, contractor reports and calculation files. A lower energy bill might reflect a price change rather than lower emissions. Record the baseline, the units, the exclusions and the assumptions next to every claim. Mark missing supplier data as missing, not zero. Keep the source, capture date and owner of each meter reading or calculation, and record changes to units or emission factors.
Because Module Twelve requires accurate information and a described method, the method file is part of the legal record. Let a second reviewer recompute a sample. If a supplier replaces an estimate with a measured figure, keep both versions and explain the revision. A figure that cannot be reproduced should be removed from public use until it can.
Compare marketing with evidence
List every sustainability statement in the website, the tender bid, the brochure and the investor deck, and trace each to original records. A claim such as all energy is renewable needs a stated period and coverage, not a loose inference from a bill. Test the strongest adjective in each statement: net zero, certified and 100% can imply a wider boundary than the file supports. Narrow the claim to what can be shown, or hold it.
Article 22 of Law No. 39 of 2014 is the clearest Kuwaiti text on false advertising to consumers. For a listed company, Module Twelve separately requires clarity and accuracy in the sustainability report. We have not found a Kuwaiti statute that defines greenwashing by name, so we apply the general false-information and accuracy rules and tell clients plainly where the law does not define the term. Marketing approval should never run ahead of the evidence.
Lender questionnaires, warranties and sustainable finance
Banks that lend to Kuwaiti projects are subject to the Central Bank of Kuwait's sustainable finance circular, No. 2/BS/IBS/500/2022, which requires them to publish a sustainability report or a sustainability section in their annual report. A bank may therefore ask a borrower for environmental and social information that it can later repeat in its own reporting. Boursa Kuwait's reporting guide was issued under CMA Resolution No. 136 of 2022 on sustainable finance requirements, so the vocabulary used by banks and by listed companies is converging.
A borrower should answer a lender questionnaire only from the evidence file, and any warranty about environmental compliance or sustainability data should be limited to what the file supports and to a stated date. Avoid a warranty that all permits are in force unless the permit list has been checked this month. We read the warranty, the disclosure schedule and the public claim together, because a gap between them is where a later dispute usually begins.
Assign responsibility across the project chain
Who collects readings, checks the method and approves publication? Compare supplier obligations with the records actually received. If only part of the contractor network reports, a whole-project claim is unsafe. For a public-private partnership under Law No. 116 of 2014, the Higher Committee under Article 2 includes the Director General of the Environment Public Authority, and Article 31 subjects PPP agreements to ex ante and ex post audit by the State Audit Bureau. Environmental and reporting duties therefore belong in the project agreement, with a named owner.
Article 30 of the PPP Law deals with the end of the agreement, when the Authority assesses the project and the Higher Committee arranges management of assets that pass to the State. Handback conditions are a place to require environmental records, decommissioning evidence and data access. We ask that the project company has access to the supplier's primary records or to a verifiable assurance process, not only an annual headline figure.
Board oversight and corporate governance
The Companies Law, Law No. 1 of 2016, gives the board of a shareholding company its powers in Article 184, and Article 186 addresses corporate governance principles. Article 187 deals with independent board members. A sustainability claim that goes to investors is a board matter in practice, even where the statute does not name sustainability. The board should be able to show who reviewed the claim, which evidence was before it and when it was approved.
Minutes should record the question asked, the data reviewed and any dissent. If management changes a figure after board review, the change needs a new approval. Keep versions of data and approvals so that an old figure is not reused after project boundaries change. Record what may be disclosed to investors without breaching confidentiality terms with customers, lenders or public entities.
Recheck after changes
Expansion, a new energy source or a replacement supplier can alter an earlier result. Article 16 of Law No. 42 of 2014 already treats alterations and expansions of an existing activity as events that need an environmental assessment under the Executive Bylaw, so the legal and the factual review should happen together. Assign an owner and a date to each public claim, and state a rule for when it expires.
Withdraw or correct a claim that has become stale, and keep the correction in the file. Regulators and counterparties tend to look more kindly on a prompt correction than on a claim that was left standing. For listed companies the annual cycle in Module Twelve gives a natural date for the review. For other companies the date should follow the project calendar or the contract.
What we review in an ESG project diligence
When we review an ESG claim in Kuwait, we identify the speaker and the audience, the boundary and period, the permits and impact assessments, the data and method files, the contractor and supplier records, the assurance used, the board approvals and the consumer, securities and contract rules that apply. We then compare each public sentence with the file and report the gaps in plain terms, with a proposed rewording or a hold. Our Kuwait office in Sharq also checks that the Arabic and English versions of a claim say the same thing.
See also: our Kuwait telecommunications and IT guide and our Kuwait compliance and regulatory guide, plus our commercial and corporate practice.
Frequently asked questions
Is there a Kuwaiti ESG law?
There is no single ESG statute. Environmental duties come from Law No. 42 of 2014, listed-company reporting from Module Twelve of the Executive Bylaws of Law No. 7 of 2010, and advertising rules from Law No. 39 of 2014.
Is sustainability reporting mandatory in Kuwait?
For companies listed on the Premier Market, CMA Circular No. 4 of 2025 states that disclosure becomes mandatory from 2026. For other listed companies the Module Twelve report is described as optional, and banks follow the Central Bank of Kuwait circular on sustainable finance.
Which standards must a report follow?
Module Twelve requires the report to follow one or more international sustainability reporting standards and to describe its scope, materiality process and methods. Boursa Kuwait's 2026 guide refers to ISSB standards IFRS S1 and IFRS S2 and is advisory in nature.
Do we need an environmental impact assessment before expanding a site?
Article 16 of Law No. 42 of 2014 prohibits starting a project, or an alteration or expansion of an existing activity, or obtaining a license for it, before the assessment under the Executive Bylaw is carried out. A violation is punishable under Article 128 by a fine of KWD 5,000 to KWD 50,000.
Can a false green claim create liability?
Article 22 of Law No. 39 of 2014 prohibits advertising goods or services with false information or data. Listed companies also have the accuracy requirement in Module Twelve, and contract terms with public entities may add their own remedies.
Does external assurance have to be used?
Module Twelve says the company may seek external assurance to strengthen the report's credibility, and that the assurance report must then be included in the sustainability report. It is not stated as compulsory.
Who checks a PPP project's environmental performance?
Article 2 of Law No. 116 of 2014 includes the Director General of the Environment Public Authority in the Higher Committee, and Article 31 subjects PPP agreements to State Audit Bureau review. The detailed duties come from the project agreement and Law No. 42 of 2014.
How can we help with an ESG claim or project diligence in Kuwait?
Our Kuwait office reviews the claim, the evidence file, the permits and the contract duties before publication. Send us the draft statement or the project summary through the contact page, and we will reply with a scoped plan.