Digitalisation and Its Impact on Corporate ESG Performance in Middle East Countries

Abstract

Digitalisation, ESG (environment, social, and governance) practices have gained importance in recent years. Firms have to mandatorily implement initiatives for ESG. This paper examines digitalisation and corporate ESG performance in Middle East Countries. Digitalisation is about using digital and online methods to frame ESG metrics performance; provide information about ESG to regulatory authorities, and investors, and to track the corporate performance. Since ESG has three dimensions environment, social, and governance. This paper examines the impact of these three dimensions collectively and individually on firm performance, and attitude of investors and firm owners. Three hypothesis were drawn and tested. A panel data of 439 firms from fifteen Middle East countries was drawn and observations were made for 12 variables for the years 2013- 2023. Twelve value relevance models were created, tested, and the data was subjected to regression analysis using SPSS. The findings indicate that except for environment dimension, the other two dimensions give relevant information that digitalisation helps investors to take investment decisions, thereby impacting the firm market value significantly and positively. Digitalisation has a positive and significant relation with ESG performance.