Do corporate characteristics improve sustainability disclosure? Evidence from the UAE

Abstract

The study examines the relationship between corporate attributes and ESG disclosure among selected companies in United Arab Emirates. The corporate attributes are company size, profitability, liquidity, industry sensitivity and leverage. The descriptive statistics reveals a maximum disclosure score of 78 and a minimum score of 32. The results of the regression analysis show that only company size, industry sensitivity and liquidity are significant determinants of ESG disclosure in UAE. Our findings show that firms with larger asset base and good degree of liquidity disclose more ESG information. However, firms in the service sector are more inclined to ESG disclosure than manufacturing firms. We recommend that the board of directors should make sustainability reporting a front burner in its corporate strategy. In addition, the regulatory authorities should legalise ESG disclosure among UAE firms. Finally, lenders of corporate funds should make certified ESG report as a major condition precedent to obtaining funds.