Unlocking the Sustainable Workplace Equality Policy (SWEP): Evidence from an Emerging Country

Abstract

Businesses are actively integrating sustainability principles into their operations by pursuing goals that go beyond reputation management, which all help companies capture value through growth and return on investment. This study aimed to investigate the current status of the Sustainable Workplace Equality Policy (SWEP) in an emerging country—Kuwait—and how it impacts firms’ financial and market performance. This study included companies listed in the Kuwait Boursa (Boursa Kuwait is the operator of the Kuwait Stock Exchange) in the period between 2016 and 2021. A disclosure index was prepared for SWEP based on guidelines provided by a combination of various sources and standards such as the Global Reporting Initiatives (GRI) Standard, S&P Global Corporate Sustainability Assessment, Dow Jones Sustainability Index, United Nations Global Compact, and KPMG Sustainability Reporting Standards. Time series regression analysis was used to examine the hypotheses of this study which were developed using Rawls’ Theory of Justice (1971). The results revealed a strong positive relationship between SWEP disclosure and firm measures of financial performance. The results also indicate that SWEP is value-relevant and affects firms’ market value, suggesting that investors consider firms’ disclosure of SWEP when making investment decisions in Kuwait. The results of the current study are of interest to several stakeholders, especially investors and policymakers. Specifically, this study is relevant to the Kuwaiti Government, which has defined a clear path for sustainable growth with the Vision 2035/New Kuwait initiative that is aimed at transforming the country into a financial and commercial hub for the region by 2035.