This study investigates the influence of working capital determinants on ESG disclosure. Using data on Saudi listed firms for 2018–2022, we find that working capital is generally positively associated with a firm’s ESG disclosure. Furthermore, we observe that the positive association between working capital and ESG disclosure exists predominantly in larger firms and during the COVID-19 pandemic. Additionally, we find that during the COVID-19 pandemic, firms exhibited superior equity, debt, and cash holdings, which enhanced sustainability reporting practices. Our research provides imperative evidence about the effect of working capital on ESG disclosure from a risk management and financial flexibility perspective in emerging markets.
Alruwaili et al. (Tue,) studied this question.