ESG Disclosure and Firm Value: Do Audit Committee Characteristics and Sustainability Committee Matter?

This study examines how ESG disclosure (ESGD) influences firm value (FV) in Saudi Arabia. It also analyzes the moderating roles of audit committee (AC) characteristics and sustainability committees (SC) on this relationship. The sample consists of 100 top non-financial firms listed on the Saudi stock exchange (Tadawul) from 2015 to 2022, yielding 800 firm-year observations. Using pooled ordinary least squares (OLS), fixed effects regression, and GMM methods, the findings indicate a significant positive effect of ESGD on FV. Moreover, all AC characteristics and the sustainability committee positively and significantly strengthened this relationship. These findings carry important implications for investors, regulators, and corporate managers by highlighting how governance structures can influence financial performance, especially in emerging markets. This study contributes to the literature by expanding the discussion on the beneficial impact of AC characteristics and SC on FV within developing economies. Unlike earlier research that mainly focused on the direct link between ESGD and FV, this work underscores the role of governance factors in enhancing that relationship.