International Review of Business, Trade, and Economics
Capitalising Green Spend Classifying Sustainability Investments in Middle Eastern Corporations
Abstract
Syed Safwan Kamal
As sustainability becomes an integral part of corporate strategy, firms face increasing scrutiny over how they account for green investments. Under IFRS, sustainability-related expenditure must be classified either as capital expenditure or operating expenditure, a decision with direct implications for financial performance metrics, investor perceptions, and access to green finance. This paper explores how listed corporations across the Gulf Cooperation Council region approach this classification challenge using a desk-based review of publicly available environmental, social, and governance and financial disclosures, regulatory materials, academic literature, and professional guidance.
The study applies a structured, three-step synthesis framework comprising thematic coding of sustainability initiatives, comparative analysis of classification patterns, and the development of a decision-support matrix. While renewable energy infrastructure and efficiency retrofits are commonly capitalised, other initiatives, such as carbon-capture pilots, SaaS emissions tools, and staff training, exhibit inconsistent treatments across jurisdictions and sectors.
The findings suggest that recognition choices are influenced not only by IFRS criteria but also by strategic priorities, governance structures, and regional policy signals. The study identifies key judgment zones and highlights the need for clearer internal frameworks and contextualised regional guidance. It concludes with practical implications for preparers, auditors, investors, and regulators seeking to improve the consistency and transparency of sustainability-related financial reporting in the Middle East.