ESG disclosure and firm performance: do gender diversity and sustainability committee matter?

This study explores the impact of ESG disclosure (ESGD) on firm performance (FP) in Saudi Arabia. Additionally, the study investigates the moderating effect of board gender diversity (BGD) and sustainability committees (SC) in this relationship. The study sample comprises the 100 leading non-financial companies listed on the Saudi stock exchange (Tadawul) from 2015 to 2022, resulting in 800 firm-year observations. Employing a fixed-effects regression model and GMM estimates, the study results revealed a significant positive impact of ESGD on FP. Furthermore, the gender diversity and sustainability committee had a positive and significant moderating impact as each of them enhanced the relationship between ESGD and FP. These results have important implications for investors, governments and company management, as the moderating function of BGD and SC emphasizes how governance structures can sway financial outcomes, particularly in emerging markets. The current study extends the debate in the literature surrounding the advantageous effects of BGD and SC on FP, especially within developing economies. Unlike prior research that primarily concentrated on a direct association between ESGD and FP, this study sheds light on how governance aspects like BGD and SC can deepen this relationship.