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ESG Disclosure and Financial Performance: Survey Evidence from Accounting and Islamic Finance

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  • Hebah Shalhoob

    (Department of Business Administration, The Applied College, King Abdulaziz University, Jeddah 21589, Saudi Arabia)

Abstract

This study examines the relationship between Environmental, Social, and Governance (ESG) disclosures and perceived financial performance within the context of Islamic finance, with a focus on Maqasid al-Shariah—the overarching goals of Islamic law. Using a quantitative approach, the study surveyed 350 stakeholders in Saudi Arabia’s Islamic finance sector, including corporate managers, investment professionals, and financial analysts, over a six-month period (May to October 2024). The findings indicate that stakeholders perceive a positive relationship between ESG disclosures and financial performance, particularly when companies align their ESG practices with Islamic finance principles. However, the study does not measure actual financial performance; rather, it assesses stakeholders’ perceptions of ESG’s influence on corporate governance, risk management, and investment attractiveness. Results suggest that companies integrating ESG principles with Maqasid al-Shariah foster greater stakeholder trust, enhance corporate responsibility, and promote long-term sustainability. However, variations in trust and investment decisions exist based on industry type, ESG disclosure levels, and demographic factors such as experience and familiarity with ESG practices. The study provides novel insights into how Islamic finance principles shape ESG disclosure practices, offering practical recommendations for improving corporate governance and sustainability. By emphasizing transparency, ethical investment, and regulatory alignment, these findings contribute to ongoing discussions on sustainable finance and the role of ESG in shaping Islamic financial institutions.

Suggested Citation

  • Hebah Shalhoob, 2025. "ESG Disclosure and Financial Performance: Survey Evidence from Accounting and Islamic Finance," Sustainability, MDPI, vol. 17(4), pages 1-26, February.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:4:p:1582-:d:1591318
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    References listed on IDEAS

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    2. Daing Maruak Sadek & Noor Syahidah Binti Mohamad Akhir & Siti Aisyah Binti Yusof & Muhammad Saiful Islam Bin Ismail & Izatul Akmar Bin Ismail & Mohd Shahid Azim Bin Mohd Saufi & Muhammad Zarunnaim Bin, 2025. "Islamic Green Finance and Corporate Governance: A Comprehensive Literature Review and Research Agenda," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 9518-9527, September.
    3. Alexandros Garefalakis & Ioannis Sitzimis & Erasmia Angelaki & Panagiotis Giannopoulos & Panagiotis Kyriakogkonas, 2025. "Audit Quality Indicators Across Jurisdictions: Regulatory Diversity, ESG Integration, and Implications for Public Trust," Sustainability, MDPI, vol. 17(21), pages 1-32, October.
    4. Mohd Amran Mahat & Mohd Mas Rizat Abdul Latif & Mohd Yassir Jaaffar & Mohd Tarmizi Ibrahim, 2025. "Beyond Banks and Boards: A Bibliometric Mapping of Financial Disclosure Across Islamic Institutions, 1990–2025," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 5782-5793, September.

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