A REVIEW OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) PRACTICES AMONG SAUDI LISTED COMPANIES: TRENDS, CHALLENGES, AND POLICY IMPLICATIONS

Abstract

Environmental, Social, and Governance (ESG) practices are becoming integral to corporate strategy and market competitiveness globally. In Saudi Arabia, this transition is accelerated by strategic national visions, including Vision 2030 and the Saudi Green Initiative (SGI), alongside regulatory guidance from the Saudi Exchange (Tadawul). This paper examines the current state of ESG adoption among Saudi listed companies through a dual- method approach: a structured review of recent empirical studies and policy developments (2021-2025), and a pilot content analysis of five anonymized listed firms. Our analysis indicates a discernible hierarchy in disclosure quality, with governance practices being the most robust, followed by social and environmental disclosures. The findings underscore significant challenges, including inconsistent data quality and capacity gaps, particularly in environmental reporting. We synthesize key enablers for improvement, such as the adoption of digital reporting taxonomies, TCFD-aligned risk quantification, and integration with the nascent voluntary carbon market. The paper concludes by proposing a sequenced policy roadmap emphasizing convergence with International Sustainability Standards Board (ISSB) standards, the development of sector-specific guidance, and enhanced assurance mechanisms. This study contributes to the literature by framing ESG implementation as a systemic data engineering challenge and offering actionable technology and policy roadmaps for issuers and regulators in the Saudi market.