INVESTIGATING THE LEGAL FRAMEWORKS GOVERNING ENVIRONMENTAL ACCOUNTING PRACTICES AND THEIR IMPLICATIONS FOR CORPORATE SUSTAINABILITY REPORTING IN SAUDI ARABIA

Saudi Arabia has prioritized environmental sustainability and corporate responsibility in alignment with Vision 2030, leading to a heightened focus on environmental protection and sustainable development. Consequently, the legal landscape governing environmental accounting practices and corporate sustainability reporting has gained increasing significance. This study investigates the legal frameworks regulating environmental accounting practices in Saudi Arabia and their influence on corporate sustainability reporting. The study aims to analyse the existing legal frameworks, assess their impact on corporate financial reporting of environmental matters, and offer recommendations to enhance the effectiveness of these frameworks in promoting sustainability disclosures, with a particular focus on environmental impact. The researchers employed a mixed-methods approach, combining inductive, descriptive-analytical, and quantitative techniques to explore the effects of environmental regulations on sustainability reporting in Saudi Arabia. Data were gathered through a questionnaire distributed to financial managers and environmental experts within companies. Statistical analysis was used to identify patterns and relationships, offering insights into the connection between legal frameworks and sustainability reporting. The findings reveal that while Saudi Arabia has made strides in integrating environmental policies into its regulatory and legal systems, these efforts remain limited in terms of accounting and governance compared to more developed nations. Environmental regulations tend to focus more on procedural and technical aspects rather than on accounting practices reflected in financial disclosures. This lack of specific requirements may undermine the transparency and credibility of corporate sustainability reports. The study recommends the establishment of clear and specific environmental accounting standards and the implementation of a legal framework requiring companies to prepare integrated financial reports that disclose governance practices, social responsibility, and environmental impact. The enforcement of these regulations should be strengthened through key institutions such as the Tadawul Stock Exchange, the Saudi Central Bank, and other regulatory bodies.