Your Iraqi customer or buyer is asking for ESG information. Here is what the regulatory environment requires — and what international buyers need from you.
Iraq is OPEC's second-largest oil producer and is undergoing significant reconstruction and economic development. Iraq's ESG regulatory framework is at an early stage of development, but international companies operating in Iraq — particularly in oil and gas, construction, and services — face ESG requirements from their home country regulations (EU CSRD, CSDDD, UK TCFD) and from development finance institutions. The Iraq Stock Exchange (ISX) is developing ESG disclosure requirements. International buyers and investors in Iraq face heightened due diligence obligations given the country's complex operating environment, including corruption risks, security considerations, and human rights concerns. If you supply goods or services to international companies operating in Iraq, ESG compliance evidence is increasingly required.
Key regulations in Iraq — ESG Supplier Guide
Iraq Stock Exchange (ISX) — ESG Disclosure Development
The Iraq Stock Exchange (ISX) is developing ESG disclosure requirements for listed companies. The framework is at an early stage, and the primary ESG compliance pressure on Iraqi companies comes from international buyer requirements, development finance institution conditions, and the ESG requirements of international energy company partners.
EU CSDDD — Corporate Sustainability Due Diligence Directive
EU companies with operations or supply chains in Iraq — particularly in oil and gas, construction, and services — will be required under CSDDD to conduct human rights and environmental due diligence. Iraq is classified as a complex operating environment requiring enhanced due diligence given corruption risks, security considerations, and human rights concerns. EU companies must identify and address adverse human rights impacts in their Iraqi operations and supply chains.
IFC Performance Standards and Equator Principles — Development Finance
Iraq receives significant development finance from the World Bank Group, IFC, and commercial banks applying the Equator Principles. Projects financed by these institutions must comply with IFC Performance Standards. Iraqi companies seeking development finance must demonstrate compliance with environmental and social standards covering: environmental assessment, labour and working conditions, community health and safety, land acquisition, biodiversity, and indigenous peoples.
EITI — Extractive Industries Transparency Initiative
Iraq is a member of the Extractive Industries Transparency Initiative (EITI), which requires the publication of oil, gas, and mining revenue data to promote transparency and accountability in the extractive sector. EITI membership is a positive governance signal for international investors and buyers. Iraqi oil and gas companies and their suppliers should be aware of EITI reporting requirements and the transparency expectations of international partners.
Iraq Data Protection & Cyber Obligations
Iraq's Communications and Media Commission (CMC) oversees telecommunications cybersecurity. Iraq does not yet have a comprehensive data protection law or mandatory breach notification regime. The National Information Technology Centre (NITC) coordinates government IT security. International sanctions and security considerations significantly affect the operating environment for international suppliers. Suppliers processing Iraqi customer data should implement incident response procedures aligned with international best practice and monitor the developing legislative framework.
What this means for you as a supplier
Iraqi suppliers to international companies — particularly in oil and gas services, construction, and logistics — face ESG requirements from their international clients' home country regulations. EU companies operating in Iraq must conduct CSDDD due diligence on their Iraqi supply chains from July 2029. US companies must comply with FCPA anti-corruption requirements. UK companies must comply with the Bribery Act. All international companies operating in Iraq should implement anti-corruption compliance programmes and conduct enhanced due diligence on Iraqi business partners. Iraqi companies seeking international financing should prepare for IFC Performance Standards compliance assessments.
Key dates
Ongoing
EITI reporting — annual oil, gas, and mining revenue transparency reports published
July 2029
CSDDD Phase 1 — largest EU companies must conduct supply chain due diligence including Iraqi suppliers
Anti-corruption compliance: the primary ESG risk for Iraq operations
Iraq consistently ranks among the most challenging countries in Transparency International's Corruption Perceptions Index. International companies operating in Iraq face significant anti-corruption compliance obligations under the US Foreign Corrupt Practices Act (FCPA), UK Bribery Act, and EU CSDDD human rights due diligence requirements. Key anti-corruption risks in Iraq include: facilitation payments, procurement irregularities, customs and import procedures, and interactions with government officials. Companies operating in Iraq should implement robust anti-corruption compliance programmes including: due diligence on Iraqi business partners, anti-corruption training, gifts and hospitality policies, whistleblower mechanisms, and regular compliance audits. International buyers conducting CSDDD due diligence on Iraqi suppliers will assess anti-corruption compliance as a priority area.
Oil sector: GHG emissions and gas flaring reduction
Iraq is one of the world's largest gas flaring countries, with significant volumes of associated gas flared at oil production facilities. Gas flaring is a major source of GHG emissions and air pollution. International energy companies operating in Iraq — including TotalEnergies, BP, ExxonMobil, and Shell — are subject to investor pressure and home country regulations to reduce gas flaring. Iraq has committed to the World Bank's Zero Routine Flaring by 2030 initiative. International oil service companies and contractors operating in Iraq should be prepared to report on their contribution to gas flaring reduction and energy efficiency improvements. EU companies subject to CSRD must report on GHG emissions from their Iraqi operations, including Scope 3 emissions from upstream oil and gas activities.
Last reviewed: April 2026. This guide is for general information only and does not constitute legal advice. Regulations change — verify current requirements with a qualified adviser.
Operating in Iraq or supplying international companies there?
ESG Stress Free helps companies navigate ESG compliance requirements for operations and supply chains in complex operating environments including Iraq.