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August 20, 2025Open Access

The Environmental Impact of Sustainable Production and Spending: Evidence from Saudi Companies

Puntos clave

Adoption of renewable energy leads to substantial reductions in greenhouse gas emissions and water challenges, enhancing environmental sustainability.
Data from 113 Saudi firms over a 14-year period shows that renewable investments are central to achieving emissions reductions.
Using advanced statistical methods, the study correlates renewable energy investments with environmental outcomes in fossil fuel-dependent sectors.
The findings call for cohesive policy frameworks that support renewable transitions while managing economic diversification in the oil sector.

Resumen

We examine how corporate renewable energy strategies under Saudi Arabia’s Vision 2030 influence environmental sustainability, addressing gaps in understanding decarbonization pathways in fossil fuel-dependent economies. Using a generalized method of moments (GMM) panel regressions and bivariate vector autoregression (BIVAR) models, the analysis evaluates data from 113 Saudi firms (2010-2024) to assess the impact of renewable investments and consumption on greenhouse gas emissions and water stewardship. Results reveal that renewable energy adoption significantly reduces emissions and water management challenges, with policy frameworks like subsidies and regulatory mandates amplifying these benefits. Notably, oil- sector firms demonstrate unique capacities to leverage economies of scale for renewable deployment, while oil price fluctuations create dual pressures on non-oil sectors. The study contributes practical insights for policymakers, emphasizing integrated strategies that combine regulatory coherence, subsidy reallocation, and oil-sector engagement to balance economic diversification with environmental goals.

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