Sustainability & ESG

“Sustainability reporting is only for giant, listed companies.” That was a fair statement a few years ago. Today, a supplier to a large project, a company applying for a green loan, or a business courting international customers can be asked for emissions and workforce data within weeks. Introduction Saudi Arabia’s sustainability agenda is moving from ambition to evidence. Vision 2030, the Saudi Green Initiative, and the Kingdom’s net zero target for 2060 have pushed investors, banks, and large buyers to ask businesses for credible ESG data. At the same time, the rules are layered: some are voluntary, some already binding, and more are expected. That makes it hard to know what you must do now and what to prepare for next. This guide breaks down the exact requirements and steps for sustainability reporting so you can scale your success without the stress. Key Takeaways Here is a quick look at the main things you will learn in this guide: Which sustainability reporting rules are binding, voluntary, or expected in Saudi Arabia Who is most likely to be asked for ESG data, even without a legal requirement Which frameworks to use, including IFRS S1 and S2, GRI, and the GHG Protocol What to disclose across environmental, social, and governance topics A step-by-step process and a 90-day plan for producing your first credible report Table of Contents Where Sustainability Reporting Stands in Saudi Arabia Who Needs to Report Key Frameworks to Understand Environmental Rules Behind the Report What to Disclose: Environmental, Social, and Governance How to Build the Reporting Process Connect ESG Data to Financial Records What a Strong Report Includes Common Mistakes and Greenwashing Risks Your First 90 Days Conclusion FAQs Where Sustainability Reporting Stands in Saudi Arabia Saudi Arabia does not yet have a single law that forces every company to publish a sustainability report. Requirements come in layers, and the picture keeps moving, so always confirm the latest position with the Capital Market Authority (CMA), the Saudi Exchange, and SOCPA before you finalise your plans. What Is Required Today The clearest binding rule applies to issuers of green, social, sustainability, and sustainability-linked debt. Under the CMA’s 2025 framework, they must include ESG disclosures, including how the proceeds are used. Separately, environmental laws place permit, monitoring, and reporting duties on regulated activities, which we cover later in this guide. What Is Encouraged The CMA issued ESG guidance in 2019, and the Saudi Exchange published its ESG Disclosure Guidelines in 2021. They encourage listed companies to publish annual information on emissions, energy use, workforce, and governance. Both are voluntary, but they have become the reference point for what good reporting looks like in the Saudi market. What Is Expected Next Regulators and standard setters have signalled alignment with the IFRS S1 and S2 sustainability disclosure standards, and SOCPA has been reviewing them. At the time of writing, no general mandatory date has been confirmed. Businesses that build their reporting around these standards now are far less likely to start over later. What Buyers and Lenders Already Ask For Many Saudi businesses meet reporting through requests rather than rules. A bank sends an ESG questionnaire, a large project asks for emissions data during prequalification, or an international customer requests information through a supplier platform. These requests carry real commercial weight even when no law is involved. Who Needs to Report Your obligations depend on who you are and who you work with: Listed companies: Encouraged to follow the Saudi Exchange guidelines, and increasingly expected by investors to do so. Issuers of ESG-labelled debt: Subject to mandatory ESG disclosures under the CMA framework. Suppliers and contractors to large projects and corporates: Often required to provide emissions, safety, and workforce data to qualify or stay on approved lists. Companies seeking bank finance or investment: Lenders and investors assess ESG risk as part of due diligence. Exporters: Some overseas customers and markets expect supply-chain sustainability data. Businesses in regulated environmental activities: Must meet permit, monitoring, and reporting duties set by the environmental authorities. Growing SMEs: Usually not legally required to report, but collecting basic data early is inexpensive and prepares you for customer and lender requests. Key Frameworks to Understand A framework gives your report structure, comparability, and credibility. These are the ones you will meet most often: IFRS S1 and S2: Investor-focused standards. S1 covers sustainability-related risks and opportunities in general, while S2 covers climate-related disclosures across governance, strategy, risk management, and metrics and targets. This is the direction Saudi regulators have signalled. GRI Standards: Widely used standards that focus on a company’s impact on the economy, environment, and people. They suit reports written for a broad group of stakeholders. SASB Standards: Industry-specific metrics designed for investors, now maintained within the ISSB structure. TCFD recommendations: A climate-risk structure whose work has largely been absorbed into the ISSB standards. GHG Protocol: The standard method for calculating emissions across Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain). CDP: A disclosure platform that investors and large buyers use to collect environmental data from companies. Pick one primary framework, note any others you map to, and keep your choice consistent from year to year so readers can compare your progress. Environmental Rules Behind the Report Voluntary ESG reporting sits on top of binding environmental law. Saudi Arabia’s Environmental Law and related regulations, overseen by the National Center for Environmental Compliance (NCEC), set expectations for permits, emissions and waste monitoring, and environmental assessments for regulated activities. Sector regulators add their own rules for industries such as energy, water, and industrial cities. The data you already collect for permits and inspections is also the raw material for your sustainability report, so collect it once and use it twice. Differences between what you report to authorities and what you publish voluntarily damage credibility quickly, which is why both should come from the same verified source from the start. What to Disclose: Environmental, Social, and Governance Focus on the topics that matter most to your business and […]