“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

1. Where Sustainability Reporting Stands in Saudi Arabia
2. Who Needs to Report
3. Key Frameworks to Understand
4. Environmental Rules Behind the Report
5. What to Disclose: Environmental, Social, and Governance
6. How to Build the Reporting Process
7. Connect ESG Data to Financial Records
8. What a Strong Report Includes
9. Common Mistakes and Greenwashing Risks
10. Your First 90 Days
11. Conclusion
12. 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 stakeholders, and present each metric with a number, unit, period, and scope.

Environmental

• Greenhouse gas emissions: Scope 1 from fuel and company vehicles, Scope 2 from purchased electricity, and Scope 3 where relevant and measurable
• Energy: Total consumption, energy efficiency measures, and any renewable energy use
• Water: Consumption and reduction efforts, which matter greatly in a water-scarce country
• Waste: Volumes generated, recycled, and disposed of
• Climate risks: Exposure to extreme heat, supply disruptions, and changing regulation
• Targets: Reduction goals with a base year and deadline

Social

• Workforce profile: Headcount, gender balance, and turnover
• Saudi employment: Localisation progress and your Nitaqat classification
• Health and safety: Incident rates, training, and corrective actions
• Fair employment: On-time wage payment through the wage protection system, training hours, and employee development
• Supply chain: Labour and safety standards expected of suppliers
• Community: Investment and partnerships in the areas where you operate

Governance

• Board oversight: Who is responsible for sustainability at board and management level
• Ethics and anti-corruption: Codes of conduct, training, and whistleblowing channels
• Risk management: How sustainability risks are identified and managed
• Data protection and cybersecurity: Compliance with the Personal Data Protection Law and security controls
• Supplier standards: Codes of conduct and screening practices

How to Build the Reporting Process

A clear process turns reporting from a yearly scramble into a routine:

1. Assign ownership. Name an executive sponsor and form a working group from finance, HR, operations, procurement, and legal.
2. Run a materiality assessment. Identify the topics that matter most to your business and stakeholders, rank them, and get board approval on the shortlist.
3. Set the boundary. Decide which entities and sites are included, ideally matching your financial statements, and explain any exclusions.
4. Collect data. Assign an owner, source, and frequency to each metric. Start with what you already have, such as utility bills, fuel records, payroll and GOSI data, and safety logs.
5. Calculate and document. Use recognised methods and emission factors, and keep calculation files and assumptions for review.
6. Set a baseline and targets. Choose a base year and set realistic, time-bound targets that support national goals where relevant.
7. Draft, review, and approve. Involve each department, run a legal review, and obtain board sign-off.
8. Consider assurance. An independent limited assurance review adds credibility once your data processes are stable.
9. Publish and improve. Release the report in Arabic and English, gather feedback, and improve each year.

Connect ESG Data to Financial Records

Sustainability data is most credible when it reconciles with your accounts. If your annual electricity spend is SAR 1.2 million, the kilowatt-hours in your report should match those bills. Fuel purchase invoices, supplier tax invoices, and payroll records support the same figures, so keep them organised and retrievable. When you estimate consumption from spend, remove the 15% VAT first; otherwise, your figures will be overstated.

Use the same reporting period as your financial year, and make sure costs linked to sustainability projects, such as energy-efficiency upgrades, can be traced in the ledger. Because your financial data is also filed with authorities such as ZATCA, consistency between the two sets of records protects you if questions arise later.

What a Strong Report Includes

A clear, well-organised report usually contains:

• Leadership message: A short statement of commitment from senior management
• About this report: Reporting period, scope, boundary, and framework used
• Materiality results: The topics you selected and why
• Governance: Who oversees sustainability and how decisions are made
• Strategy and risks: Climate and social risks and how you respond
• Performance data: Metrics for at least two or three years, with units and clear comparisons
• Targets and progress: What you promised and how you are doing
• Methodology notes: Calculation methods, emission factors, and any estimates
• Assurance statement: If an independent review was completed
• Content index: A table mapping your disclosures to the framework
• Bilingual versions: Arabic and English, checked by native speakers
• Feedback contact: A way for readers to ask questions

Common Mistakes and Greenwashing Risks

Avoid these errors, which are among the most common:

• Waiting for a mandate: Starting late means a compliance sprint with weak data.
• Reporting everything: Without materiality, reports become long and unfocused.
• Numbers without methods: Figures with no calculation notes cannot be checked.
• Changing boundaries silently: Shifting scope each year makes progress impossible to read.
• Ignoring Scope 2: Purchased electricity is often the largest and easiest piece to measure.
• Vague claims: Terms such as “eco-friendly” or “green” without evidence invite criticism.
• Only good news: Readers trust reports that also explain challenges and misses.
• Treating the report as marketing: Investors and lenders look for consistency and evidence, not slogans.
• Disconnected data: ESG figures that do not match financial and operational records damage trust.
• No clear owner: Without accountability, data collection stalls every year.

Your First 90 Days

If you are starting from zero, follow this order:

1. Days 1 to 30: Name an owner, list your current obligations from lenders, customers, and regulators, choose a framework, and gather the data you already have.
2. Days 31 to 60: Run a simple materiality assessment, calculate your Scope 1 and Scope 2 baseline, and identify data gaps.
3. Days 61 to 90: Draft a short first report, set two or three realistic targets, get board review, and plan improvements for next year.

Build a Strong Foundation for Sustainability Reporting in Saudi Arabia 

Sustainability reporting in Saudi Arabia is a mix of binding rules, clear voluntary guidance, and strong market pressure. You do not need a perfect report on day one. You need a defined framework, a small set of material topics, data you can trace to real records, and a process that repeats every year. One final thought: begin with the numbers you already hold, such as energy bills, fuel invoices, and workforce records, and build your first report on those. A modest, accurate report will earn more trust than an ambitious one that cannot be verified.

FAQ’s

Is sustainability reporting mandatory in Saudi Arabia?
Not for all companies at the time of writing. ESG guidelines for listed companies are voluntary, while issuers of green, social, sustainability, and sustainability-linked debt must make ESG disclosures under the CMA framework. Regulators have signalled a move toward IFRS S1 and S2, so check the latest position regularly.

Do private companies and SMEs need to report?
There is usually no general legal duty, but customers, banks, and large project owners may ask for data. Starting with basic emissions, energy, and workforce information prepares you for those requests.

Which framework should we use?
Choose the one that fits your audience. IFRS S1 and S2 suit investors and lenders, GRI suits broader stakeholder reporting, and the GHG Protocol is the standard method for emissions. Many companies use one as the main framework and map to others.

Do we need to report Scope 3 emissions?
Scope 3 is usually phased in after Scope 1 and Scope 2, because it is harder to measure. However, large customers may ask for it earlier, so identify your main categories and begin with the ones that are easiest to estimate.

Does the report need external assurance?
It is not generally required, but independent assurance adds credibility. Many businesses start without it and add limited assurance once their data processes are stable.

Should the report be published in Arabic and English?
Publishing both is good practice and helps reach local stakeholders and international investors. Listed companies already make their public disclosures in both languages.

Read More

• What Is ESG? A Practical Guide for Saudi Businesses
• How to Calculate Your Carbon Footprint: Scope 1, 2, and 3 Explained
• How to Run an ESG Materiality Assessment

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