Sustainable Finance in Emerging Economies: A Comprehensive Review of ESG Accounting in MENA Countries
DOI:
https://doi.org/10.56830/IJAMS04202605Keywords:
ESG Accounting, MENA Region, Corporate Governance, Islamic FinanceAbstract
This study systematically reviews the fragmented body of literature examining Environmental, Social, and Governance (ESG) accounting and finance within the Middle East and North Africa (MENA) region. Analysing the empirical and theoretical foundations of sustainable accounting up to 2026, the paper uncovers key structural trends. First, the value relevance of ESG is proxy-dependent; long-term market indicators (Tobin’s Q) reward comprehensive environmental (E) and social (S) disclosures, while short-term accounting metrics (ROA) often reflect immediate compliance costs. Second, the governance (G) pillar exhibits mixed results due to heavy ownership concentration across the region. Third, internal board architecture (independence and gender diversity) and external audit quality (Big Four mandates) serve as critical filters that curb greenwashing, reduce information asymmetry, and optimize capital costs. Finally, the review highlights a structural convergence between modern ESG frameworks and Islamic banking ethics (Maqasid al-Shariah). By contrasting the hypercapitalized Gulf Cooperation Council (GCC) markets with resource-scarce non-GCC economies, this manuscript maps critical methodological and geographic gaps, delivering a comprehensive future research agenda and actionable insights for regional regulators, investors, and corporate strategists.
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