Document Type

Article

Publication Date

Winter 2-1-2026

Abstract

In response to the increasing global demand for sustainable practices, the Egyptian Financial Regulatory Authority [1] issued decree 107 in 2021, mandating that Egyptian listed non-financial firms with issued capital of at least EGP 100 million disclose their ESG practices annually, thereby aligning their practices with international sustainability standards. The objective of this study is to investigate the impact of leverage and independence of audit committees on the level of ESG disclosure. Also, it is to examine the moderating effect of Decree 107 on the relationship between leverage and ESG disclosure. A panel data analysis is employed using a balanced panel of 53 listed firms from 2019 to 2024. The analysis utilized Pooled OLS regression, fixed effects, and random effects models. The findings show that Decree 107 has a significant positive effect on ESG disclosure level, highlighting the positive impact of regulations in emerging economies. The independence of the audit committee significantly influences ESG disclosure level, thus it shows the supportive role of internal governance mechanisms. Even though leverage is not significantly affecting the disclosure level, its positive interaction with Decree 107 shows that rules may motivate financially distressed firms to enhance transparency. This shows how the power of regulations may override internal financial pressures. This research contributes to the literature by demonstrating how regulations and internal governance might influence disclosure behaviour in emerging economies.

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