Renewable Energy Firms In Transition: Environmental Returns And Policy Synergies Under Saudi Vision 2030

We examine how renewable energy strategies under Saudi Arabia’s Vision 2030 drive environmental sustainability in fossil fuel-dependent economies. The study analysed data from 42 firms (2012–2023) using the Generalised Method of Moments (GMM) and Impulse Response Functions (IRFs). Our findings indicate that a 1% increase in clean energy investment results in a 6.3–8.1% reduction in climate emissions and a 10.2–16.3% decrease in water challenges. A 1% increase in clean energy use lowers emissions by 5.4–7.6% and water stress by 3.2–11.4%. Policy integration amplifies outcomes. Oil-sector firms leverage scale for renewable projects while non-oil sectors face pressures from oil price volatility. IRFs confirm sustained environmental gains from renewable adoption. The study advocates integrated policies, including subsidy reallocation, lowwater renewables, and oil-sector engagement, to align economic diversification with sustainability. It also emphasises the need to address agricultural water inefficiencies and industrial energy intensity.