A Tailored ESG Framework for Economic Growth in Saudi Arabia: ARDL Evidence from 1990 to 2022

Nagwa Amin Abdelkawy () and Abdullah Sultan Al Shammre ()
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Nagwa Amin Abdelkawy: Economics Department, School of Business Administration, King Faisal University, Al Hofuf 31982, Saudi Arabia
Abdullah Sultan Al Shammre: Economics Department, School of Business Administration, King Faisal University, Al Hofuf 31982, Saudi Arabia

Sustainability, 2025, vol. 17, issue 12, 1-19

Abstract: This study examines the impact of environmental, social, and governance (ESG) performance on economic growth in Saudi Arabia from 1990 to 2022. It uses a tailored ESG index and applies ordinary least squares (OLS) and autoregressive distributed lag (ARDL) models. The analysis reveals that while individual ESG components do not show significant short-term effects, the composite ESG index has a statistically significant positive effect on long-term GDP growth. These findings highlight the importance of integrated ESG strategies in enhancing economic resilience and diversification in resource-based economies. Moreover, although oil rents and trade openness continue to support short-term growth, they are associated with governance and environmental trade-offs, reflecting transitional challenges on the path to sustainability. Thie study provides new empirical evidence on the macroeconomic relevance of ESG in emerging economies and introduces a context-specific ESG index aligned with national policy goals. The results underscore the need to embed of embedding ESG frameworks into national development plans to ensure long-term economic resilience and structural transformation in line with Vision 2030.

Keywords: ESG performance; green growth; Vision 2030; sustainable development; institutional reform; ARDL model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:12:p:5273-:d:1673971

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