What the Saudi Exchange (Tadawul) ESG Disclosure Guidelines are, why ESG reporting in Saudi Arabia is still voluntary, and how listed companies prepare credible reports.
Part of the reading list: GCC and Jordan ESG disclosure
Updated 20 October 2026: corrected the status of the Saudi Exchange guidelines, which are voluntary with no comply-or-explain mechanism or metric list, and added what Saudi rules do not require on reporting, IFRS S1 and S2, assurance and bank climate risk.
Introduction
Saudi Arabia’s capital market has moved quickly to align with global sustainability practice. The Saudi Exchange (Tadawul) published its ESG Disclosure Guidelines in October 2021 to give listed companies a voluntary framework for reporting Environmental, Social, and Governance performance. The 2021 text is still the current version, and against the backdrop of Vision 2030 and the Saudi Green Initiative it remains the exchange’s reference document for disclosure in the Kingdom.
This article sets out what the guidelines are, how they work, and what a Saudi-listed company should actually do to prepare a report that stands up to investor and regulator scrutiny.
What are the Tadawul ESG Disclosure Guidelines?
The guidelines are an awareness document issued by the Saudi Exchange to encourage listed issuers to consider ESG and report on it. They cover materiality, three reporting options (a stand-alone sustainability report, ESG factors in financial reporting, or an integrated report), an appendix of ESG themes and key issues, and a description of reporting initiatives such as GRI, SASB and TCFD. Issuers that report usually organise their disclosure around the three familiar pillars:
1. Environmental — greenhouse gas emissions, energy and water use, waste, and broader environmental impact.
2. Social — workforce practices, health and safety, diversity, Saudisation, and community contribution.
3. Governance — board composition and independence, ethics, data privacy, and disclosure practice.
The guidelines carry no comply-or-explain mechanism and no metric list of their own. The 29 metrics often attributed to Tadawul are the GCC Exchanges Committee’s unified ESG Disclosure Metrics, released in January 2023, which are also voluntary and “do not replace” each exchange’s own guide. Comply-or-explain does exist in two other Saudi instruments: Article 87 of the CMA Corporate Governance Regulations, under which the Board report explains governance provisions not implemented, and the CMA’s 2025 Guidelines for green, social, sustainability and sustainability-linked debt, whose Saudi Riyal issuers must disclose any departure from them.
What Saudi rules do not require
- A sustainability report. No CMA, Saudi Exchange or SOCPA rule requires one. The Ministry of Economy and Planning says the national Saudi Sustainability Reporting Guidelines, described as near final, will be adopted voluntarily.
- IFRS S1 or S2. SOCPA has translated both standards into Arabic but has not adopted them. Saudi Arabia does not appear on the IFRS Foundation’s September 2026 list of jurisdictional effective dates.
- Assurance. No rule requires assurance of ESG data. SOCPA has approved ISSA 5000 for voluntary sustainability assurance engagements by its members, which governs how they perform an engagement, not whether a company must obtain one.
- A bank climate risk rule. SAMA has published no climate-related financial risk instrument in its Rulebook.
For how Saudi Arabia compares with the other five states, see ESG disclosure rules in the GCC, country by country.
Vision 2030, the Saudi Green Initiative, and the wider direction
ESG disclosure in the Kingdom does not sit in isolation. Vision 2030 frames economic diversification and quality-of-life goals that map directly onto social and governance metrics, while the Saudi Green Initiative sets the national decarbonisation agenda — including the commitment to reach net zero by 2060. Together they create a policy environment in which investors, lenders, and rating agencies increasingly expect Saudi issuers to evidence their sustainability position.
The quality of an ESG disclosure is determined as much by the evidence behind each metric as by the metric shown in the report.
Why it matters for issuers
- Investor confidence — consistent ESG data lets institutional investors compare issuers and assess material sustainability risk.
- Access to capital — sustainability-linked loans and green instruments depend on credible, verifiable KPIs.
- Index and rating outcomes — disclosure quality feeds directly into MSCI, Sustainalytics, and exchange-level ESG indices.
- Regulatory readiness — issuers that report well now are positioned for the region’s shift toward IFRS S1/S2-aligned reporting.
How to prepare a credible disclosure
- Assess the current state. Review existing ESG data, controls, and reporting against the GCC ESG Disclosure Metrics and the framework you report to, and find the gaps before an investor does.
- Fix the reporting boundary. The ESG boundary should match the financial consolidation boundary; mismatches are the fastest route to a credibility problem.
- Assign accountable data ownership. Each metric needs a named owner, a repeatable calculation method, and retrievable source evidence.
- Build the GHG inventory properly. Scope 1, 2, and 3 emissions under the GHG Protocol are the foundation of the Environmental pillar and of any future assurance.
- Align to a defensible strategy. Disclosure should follow from a materiality assessment, not the other way around.
How ESGweise helps
ESGweise works as an ESG reporting consultant for Saudi-listed companies, building reports aligned to the Saudi Exchange guidelines and to GRI, IFRS S1/S2 and ESRS, with the data architecture and working papers an assurance provider needs to sign. For issuers across the GCC, the same discipline that satisfies Tadawul today is what positions them for IFRS S1/S2 reporting, already mandatory in Qatar and adopted in Oman from 2029.
For the parallel UAE picture, see our overviews of ADX ESG disclosure and DFM ESG reporting.
Conclusion
The Tadawul ESG Disclosure Guidelines give Saudi-listed companies a starting point for sustainability reporting, not a rulebook. Reporting is voluntary today, while Vision 2030, the Saudi Green Initiative and investor expectations all push towards more disclosure. The issuers that treat disclosure as an evidence-backed discipline now, rather than a year-end communications exercise, will be ready if the Kingdom makes ESG reporting mandatory.
Frequently asked questions
Is ESG reporting mandatory in Saudi Arabia?
No. No CMA, Saudi Exchange or SOCPA rule requires a listed company to publish a sustainability report. The Saudi Exchange ESG Disclosure Guidelines (October 2021) are voluntary, and the Ministry of Economy and Planning says the national Saudi Sustainability Reporting Guidelines will be adopted voluntarily too. PIF requires its large portfolio companies to report ESG progress, which is a shareholder expectation, not law.
What do the Tadawul ESG Disclosure Guidelines cover?
They explain ESG and materiality, set out three reporting options (a stand-alone sustainability report, ESG factors in financial reporting, or an integrated report), and describe ESG themes and frameworks such as GRI, SASB and TCFD. They contain no metric list of their own. The 29 metrics often quoted are the voluntary GCC Exchanges Committee set of January 2023.
Has Saudi Arabia adopted IFRS S1 and S2, and is assurance required?
No to both. SOCPA has translated IFRS S1 and S2 into Arabic but has not adopted them, and there is no roadmap or consultation. No rule requires assurance of ESG data. SOCPA has approved ISSA 5000 for voluntary sustainability assurance engagements by its members.
How does the Saudi Green Initiative relate to ESG disclosure?
The Saudi Green Initiative and Vision 2030 set the national decarbonisation agenda, including net zero by 2060, which increasingly shapes the investor and lender expectations that drive ESG disclosure in the Kingdom.