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Nexus between sustainability reporting and corporate financial performance: evidence from an emerging market

Ibrahim El-Sayed Ebaid (Department of Accounting, Faculty of Commerce, Tanta University, Tanta, Egypt)

International Journal of Law and Management

ISSN: 1754-243X

Article publication date: 9 January 2023

Issue publication date: 16 February 2023




This study aims to explore the relationship between sustainability reporting and the financial performance of companies listed on the Saudi Stock Exchange as one of the emerging markets.


The study collects data from the corporate annual reports of a sample of 67 companies listed on the Saudi stock exchanges during the period 2016–2019. Financial performance has been measured using four accounting-based measures: return on assets, return on equity, return on capital employed and earnings per share. The relationship between financial performance and sustainability reporting has been estimated using a sustainability index that includes three dimensions (environment, health and safety, and social responsibility).


The results reveal that the sustainability reporting of Saudi companies, in general, is low. The results also indicate that there is a positive relationship between corporate financial performance and sustainability reporting, whether for the composite index or the three sub-indexes. However, this positive relationship is not statistically significant.

Research limitations/implications

Results of this study are limited to the context in which the study was conducted, which is the Saudi stock exchange from 2016 to 2019, and then the generalization of the results may be limited to listed companies operating in a similar social and economic context. The study also depends on accounting-based measures for financial performance without using market-based measures.


This study comes at the appropriate time with Saudi Arabia's adoption of a comprehensive economic plan called “Saudi Vision 2030”, of which sustainability is at the heart. Despite the efforts of the Saudi government to support sustainability, studies on this issue are still very few.



Ebaid, I.E.-S. (2023), "Nexus between sustainability reporting and corporate financial performance: evidence from an emerging market", International Journal of Law and Management, Vol. 65 No. 2, pp. 152-171.



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