How to Prepare for an ESG Audit in Saudi Arabia

Did you know that over 75% of CEOs in the Middle East now consider ESG (Environmental, Social, and Governance) a top strategic priority? In Saudi Arabia, this momentum is accelerating as Vision 2030 places sustainability and accountability at the heart of national development.

For Saudi businesses, ESG audits are becoming a standard requirement—not just for regulatory compliance, but for building investor trust, securing government contracts, and enhancing corporate reputation. With regulatory bodies like the Capital Market Authority (CMA) and Tadawul encouraging greater ESG disclosures, businesses must be proactive, not reactive.

An ESG audit is a structured evaluation of a company’s practices related to the environment, social impact, and governance. It examines how well a business aligns with ESG frameworks like:

• GRI (Global Reporting Initiative)
• SASB (Sustainability Accounting Standards Board)
• TCFD (Task Force on Climate-related Financial Disclosures)

The audit assesses sustainability reporting, internal controls, stakeholder engagement, and ethical governance.

• Investor Confidence: Global and local investors prefer ESG-compliant firms.
• Regulatory Pressure: CMA and Tadawul are pushing for transparent sustainability disclosures.
• Strategic Advantage: ESG readiness helps win tenders, attract talent, and increase operational efficiency.
• Alignment with Vision 2030: ESG supports national goals around clean energy, social equity, and governance reform.

1. Lack of Standardized Local Frameworks: No unified national ESG template.
2. Data Collection Issues: Many firms lack systems to track energy, water, diversity, etc.
3. Internal Capacity Gaps: Few organizations have trained ESG or compliance teams.
4. Cultural Perceptions: ESG is still seen by some as a Western import.
5. Regulatory Catch-Up: Rapidly evolving rules make compliance hard to track.

1. Choose the Right ESG Framework: Start with international standards, then localize for your sector and Saudi context.
2. Implement a GRC Software Solution: Use tools like CG BOD’s GRC platform to automate sustainability reporting, compliance checks, and risk management.
3. Form an ESG Committee: Include compliance officers, HR, legal, and sustainability leads.
4. Run Internal Audits: Conduct materiality assessments and internal reviews before the official audit.
5. Benchmark Your Peers: Study ESG disclosures of companies listed on Tadawul.
6. Train Your Leadership: Educate top management about ESG value and regulatory responsibilities.

• Aramco: Linked ESG reporting to its global climate commitments.
• ACWA Power: Integrated ESG into project evaluations and stakeholder communication.
• Saudi Electricity Company (SEC): Made ESG reporting mandatory in investor relations.

Preparing for an ESG audit is not just about ticking regulatory boxes. It’s about embedding sustainability and governance into your core business strategy. With Vision 2030 shaping the business landscape, ESG compliance will increasingly become a license to operate in Saudi Arabia.