Impact of Environmental, Social and Governance Practices Disclosure in Promoting Sustainability and Financial Performance: Evidence from Saudi Stock Exchange-Listed Companies

This research addresses a vital aspect of corporate sustainability by exploring the impact of ESG disclosures on the performance of petrochemical companies listed on the Saudi Stock Exchange. Focusing on the period from 2020 to 2022, it provides critical insights into how ESG practices contribute to achieving organizational sustainability goals while enhancing financial performance. The study evaluates the relationship between ESG disclosures and key financial efficiency measures, including ROA, ROE, ROS, and ROI. A quantitative analysis was conducted on 153 observations using panel regression and descriptive statistics, incorporating control variables such as firm size, financial leverage, and audit quality to isolate the specific impact of ESG disclosure. The findings reveal a positive relationship between ESG reporting and financial performance, emphasizing the dual role of ESG practices in driving financial success and fostering sustainable development. The study highlights the importance of unified, standardized ESG reporting guidelines to enhance the validity and usability of ESG practices. It also underscores the need to educate investors about the financial implications of ESG, as informed investors are more likely to champion sustainable business strategies. Additionally, the research advocates for targeted workshops aimed at financial report developers to improve the quality and effectiveness of ESG reporting. It provides a valuable contribution to the evolving discourse on sustainable finance. It offers practical recommendations for policymakers, organizations, and investors, thereby fostering the integration of ESG principles into corporate strategies.