From faith to sustainability: the impact of Zakat on corporate SDG engagement in Saudi Arabia

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Highlights the moderating role of CSR committees in translating religious obligations (Zakat) into SDG disclosure, offering a new perspective on Islamic finance and corporate sustainability.

🏢実務担当者:Firms in Islamic jurisdictions can strategically integrate Zakat with sustainability governance to enhance SDG reporting and stakeholder trust.

🏛政策担当者:Suggests that mandating Zakat alone is insufficient; complementary governance structures are needed to align with national sustainability goals such as Saudi Vision 2030.

This study aims to investigate whether corporate Zakat contributions enhance firms’ commitment to the United Nations sustainable development goals (SDGs). It further examines how internal sustainability governance, specifically the corporate social responsibility (CSR)/ sustainability committee, moderates the relationship between Zakat intensity and overall SDG engagement. Using an unbalanced panel of 334 Saudi non-financial listed firms from 2015 to 2024, a composite SDG disclosure index was constructed based on six SDGs (SDG 1, SDG 2, SDG 3, SDG 8, SDG 10 and SDG 17). The study applies a two-step system generalized method of moments estimator to address endogeneity, unobserved heterogeneity and dynamic persistence in SDG reporting. Moderation effects are tested by introducing an interaction term between Zakat intensity and CSR/ sustainability committee. The results show that Zakat intensity has a positive but limited direct effect on SDG engagement. However, the moderating effect of the CSR sustainability committee is strong and highly significant, indicating that firms with established CSR governance structures are more capable of translating Zakat contributions into substantive SDG commitments. Robustness tests using environmental, social and governance components and CSR reporting confirm the central role of governance mechanisms in shaping this relationship. The findings indicate the need for firms to institutionalize CSR governance structures to maximize the developmental impact of Zakat and strengthen alignment with national sustainability goals. The study shows that Zakat can serve as an effective instrument for advancing the SDGs when embedded within structured corporate governance systems. This study extends the literature on Islamic social finance through an analysis of how corporate Zakat interacts with internal sustainability governance to influence SDG disclosure at the firm level. It contributes to the literature by integrating Maqasid al-Shariah principles with corporate sustainability practices and offering evidence from a mandatory Zakat environment.

• semanticscholar https://doi.org/10.1108/imefm-11-2025-0885first seen 2026-06-10 05:41:38 · last seen 2026-06-16 05:17:27