The role of artificial intelligence in shaping ESG disclosure evidence from listed companies in Saudi Arabia

This research examines the relationship between artificial intelligence (AI) adoption and environmental, social, and governance (ESG) disclosure among non-financial companies listed on the Saudi Stock Exchange (Tadawul) from 2020 to 2024. Based on a balanced panel of 130 firms (650 firm-year observations), this study estimates the level and quality of ESG disclosure using a fixed-effects regression model to test the hypothesis that AI adoption is related to higher quality and quantity of ESG disclosure. Annual reports were identified as a source of data through Tadawul and ESG scores through Refinitiv Eikon, and non-financial companies were selected for data comparison. The results indicate that the adoption of AI positively impacts ESG disclosure scores significantly, with no notable differences between the environmental, social, and governance aspects. These findings are consistent with institutional and signaling theories, which imply that AI is an enabler of technology and a strategic sign of transparency and innovation in reaction to Saudi Arabia Vision 2030 sustainability ambitions. The research indicates the transformative power of AI in enhancing ESG reporting in emerging markets, with consequences for corporate managers, policymakers, and investors.