Does Sustainability and Environmental disclosure matter in Saudi Arabia? Insights from a Stakeholders’ Perspective
Authors: Aladwey Laila Mohamed Alshawadfy , Alsudays Raghad Abdulkarim 
Published: April 2024

Abstract
Background
Our research represents a departure from previous investigations into environmental accounting disclosure, as it constitutes a comprehensive analysis of sustainability and environmental disclosure within the context of Saudi Arabian accounting practices, employing a stakeholder-oriented lens. The primary objective is to scrutinize the sustainability and environmental disclosure behaviors exhibited by companies in Saudi Arabia, specifically in relation to their accountability to stakeholders.
Method
Employing a methodology that combines content analysis with close reading, the study examines sustainability and environmental disclosures found in the annual reports of 18 Saudi companies spanning the period from 2008 to 2018, encompassing a total of 198 annual reports. The research takes into consideration contextual factors relevant to Saudi Arabia, including religious and political dimensions. The findings of the study reveal a paucity of disclosures pertaining to sustainability and environmental concerns among the sampled Saudi companies.
Results
Two predominant stakeholders influencing these disclosure practices are identified: the Islamic religion, with the interpretations of Islam by the Al-Ulama exerting significant influence, and the Saudi government. The study observes that the limited number of disclosures regarding environment and sustainability is associated with the Saudi government's apparent lack of emphasis on compelling companies to address their environmental impact or participate in sustainability initiatives during the investigated period. Furthermore, the absence of directives from Al-Ulama regarding the necessary actions for companies to address global environmental challenges or enhance sustainability contributes to the dearth of disclosures. In terms of industry-specific considerations, three sectors receive relatively more attention, albeit still limited, from the Saudi government concerning environmental issues due to their distinct impacts on the country's environmental landscape.
Conclusion
The study investigates environmental and sustainability disclosure practices in Saudi Arabia, providing theoretical insights into managerial motivations for such disclosures. It reveals that Saudi companies prioritize stakeholders differently, emphasizing accountability to the Islamic religion and the Saudi government. Stakeholder definitions diverge from conventional models, acknowledging moral obligations to non-human entities. Using qualitative methods, the research emphasizes the importance of contextual factors in understanding disclosure practices, challenging previous descriptive approaches. Policy implications suggest that current disclosures meet government requirements but lack broader societal contributions. Mandatory disclosure regulations could enhance accountability and encourage companies to provide more comprehensive disclosures. This underscores the significance of contextual understanding in shaping accounting disclosure practices, particularly in socially and environmentally sensitive areas like Saudi Arabia, and highlights the potential impact of regulatory changes on improving environmental and sustainability disclosures in corporate reporting.