Integrating environmental, social, and governance principles into Saudi corporate governance: Legal pathways to economic sustainability

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Abstract

This study examines how Saudi Arabia’s evolving corporate governance framework integrates environmental, social, and governance (ESG) principles under Vision 2030. It investigates whether recent legal and regulatory reforms — particularly the Environmental Law (2021), Companies Law (2022), and Tadawul ESG Disclosure Guidelines — represent a substantive transformation toward sustainable corporate governance or merely formal compliance. Adopting a doctrinal-comparative methodology complemented by empirical evidence from recent peer-reviewed studies (Basali, 2025), the research analyses how law, policy, and market behavior interact to embed sustainability within Saudi corporate practice. The findings reveal that while regulatory initiatives have advanced ESG disclosure and board accountability (Sanad, 2025), enforcement remains uneven, and institutional coordination is fragmented. Nevertheless, empirical results show that firms aligning environmental responsibility with strategic governance exhibit higher profitability, resilience, and investor confidence. The analysis concludes that Saudi Arabia’s gradual adaptive approach constitutes a hybrid model of legal transplantation that reconciles global sustainability norms with domestic institutional realities. Policy implications emphasize the transition from voluntary to semi-mandatory ESG reporting and the need for unified regulatory oversight. The study contributes to understanding how emerging economies can internalize sustainability principles through law, governance, and ethical reform consistent with Vision 2030’s transformative agenda.

Keywords: ESG Disclosure, Corporate Governance, Saudi Arabia, Vision 2030, Sustainability Law, Environmental Responsibility, Adaptive Legal Transplantation

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G3, G38, K2

Received: 17.07.2025
Revised: 10.10.2025; 23.01.2026
Accepted: 02.02.2026
Published online: 04.02.2026

How to cite this paper: Al-Marri, A. S. A. (2026). Integrating environmental, social, and governance principles into Saudi corporate governance: Legal pathways to economic sustainability. Corporate Governance and Sustainability Review, 10(1), 169–177. https://doi.org/10.22495/cgsrv10i1p15