THE FINANCIAL NEXUS OF LEVERAGE, PROFITABILITY, AND COMPANY SIZE ON SUSTAINABILITY REPORTING DISCLOSURE: SECTORAL EVIDENCE FROM FOOD INDUSTRY COMPANIES LISTED ON THE MUSCAT STOCK EXCHANGE, OMAN

Abstract

The main objective of the present paper is to examine the financial leverage, profitability, and firm size influence on sustainability reporting disclosure (SRD) in the food industry firms that are active on the Muscat Stock Exchange (MSX) in the Sultanate of Oman. With sustainability reporting spreading globally, in response to stakeholder’s growing interest in environmental, social and governance (ESG) disclosure requirements, it is important to know the financial drivers of such disclosures in emerging economies. The food industry which holds a central role in Oman’s economic diversification and food safety, receives limited attention in ESG studies, especially in the context of the financial characteristics influencing the disclosure behaviour. The study, using a quantitative research method, investigates a 5-year panel data (2020–2024) based on the purposive sample of food industry firms that have made available their ESG disclosures. Findings via content analysis are scores of SRD, while independent variables are the debt_to_equity ratio (leverage), ROA (profitability), and total assets (company size). The results should help show industry specific insights into how financial performance matters for the degree and quality of ESG reporting. The present research adds to the existing void in the GCC-based ESG literature by providing evidence from Oman’s food industry, which will be subject to mandatory ESG disclosure from 2025 onwards. The implications of the current research will be useful for corporate managers, investors, and policy makers in enhancing corporate governance, regulatory adherence and driving sustainable business. By focusing on the financial link connected with sustainability reporting (SD), this paper enriches the debate on ESG integration and effective corporate transparent reporting in developing context.