Corporate Social Responsibility Disclosure of Energy and Material Sectors in the Kingdom of Saudi Arabia

Abstract

Corporate social responsibility disclosure (CSRD) is a communication tool used to deliver a firm’s social, environmental and economic accountability to society. This study aims to investigate the extent and quality of voluntary CSRD in energy and material sectors in Saudi Arabia, particularly following the introduction of Vision 2030, represents the principal focus of this study. This study analysed the annual reports of the three most profitable firms in the energy sector and three most profitable firms in the material sector over the period 2013 to 2019. This analysis relied on employing quantitative (t-test) and qualitative (thematic analysis approach) content analysis methods. The findings highlighted a number of issues with marked differences in what firms actually reported on by way of voluntary CSRD disclosure and what was required from stakeholders, nevertheless, firms in material sector’s total CSRD was significantly higher than firms in energy sector. The findings also show that, high-value firms (i.e. SABIC) maintained their reputation by having greater transparency and depth in their disclosures, aligning these with their business objectives and public policies, especially after the introduction of Vision 2030. Furthermore, firms under global visibility from the study sample (i.e. Saudi Aramco) were significantly transparent and made concerted efforts to engage with key stakeholders, providing greater levels of voluntary social and environmental information, integrating this information to business strategy, a further commitment to ethical business practices with supply chains, and greater harmonisation with public policy. This study will contribute towards enhancing the regulators’ understanding of current CSRD practices in Saudi Arabia’s energy and material sectors and developing and aligning standards to help the Kingdom achieve its wider macro-environmental and social objectives. From the work that was conducted during this research, it is clear that future studies need to focus on investigating all possible sources for firms’ CSRD.