Digital Finance Transformation, ESG Integration, and Risk Governance: Impact on Financial Performance of Food Sector Firms in Saudi Arabia

Abstract

This study investigates the impact of digital finance transformation, ESG integration, and risk governance on the financial performance of food sector firms in Saudi Arabia. In response to the increasing global emphasis on technological innovation, sustainability, and corporate governance, this research aims to provide empirical evidence from an underexplored sector and region. A quantitative research design was adopted, and data were collected through a structured survey questionnaire distributed among finance, sustainability, and risk management professionals across leading food firms in Saudi Arabia. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed for data analysis to test the proposed hypotheses and evaluate the measurement and structural models. The findings reveal that digital finance transformation, ESG integration, and risk governance each have a significant and positive effect on financial performance. Moreover, risk governance mediates the relationships between both digital finance transformation and ESG integration with financial performance, highlighting the interconnected nature of these strategic initiatives. The results suggest that firms that align technological innovation, sustainability practices, and risk management into a coherent strategy are better positioned to achieve superior financial outcomes. This study contributes to the growing body of knowledge on corporate performance drivers in emerging economies and offers valuable insights for managers, investors, and policymakers aiming to enhance corporate resilience and sustainability.