ABSTRACT This study adopts an exploratory approach to examine how firms communicate strategic orientation through ESG disclosures. Using a validated dictionary of exploration and exploitation language, we analyse 278 ESG reports from all UAE‐listed companies between 2020 and 2023, classifying ESG disclosures as exploration‐dominant, exploitation‐dominant, ambidextrous or low orientation. We construct quantitative indices and complementary typologies that enable comparisons across industries, firms, governance structures and time. The findings indicate a gradual increase in discourse around exploration and ambidextrous orientations over time, reflecting shifts in how firms articulate ESG‐related strategic intent within a mandatory reporting context. Industry‐level comparisons indicate that financial firms tend to articulate more exploration‐oriented ESG discourse, while resource‐based industries focus more on exploitation. In addition, exploration‐ and ambidextrous‐oriented ESG discourse co‐vary positively with external ESG performance assessments and selected governance characteristics, including board gender diversity. Overall, the results suggest that ESG reporting functions not only as a compliance mechanism but also as a strategic communicative space through which firms signal priorities, legitimacy and orientation. This study contributes to ESG research by introducing the exploration–exploitation framework as a systematic, discourse‐based lens that links ESG communication to strategic orientation while highlighting the continued discretion firms retain under mandatory disclosure regimes.
Külzer‐Sacilotto et al. (Sun,) studied this question.