<p>This study investigates the relationship between financial development and Economic, Social, and Governance risk volatility in Middle Eastern countries. Using panel data covering the period from 1995 to 2023, we examine the extent to which financial development influences ESG risk volatility and assess the moderating role of macroeconomic volatility, including exchange rate volatility, natural gas rent volatility, and output volatility. The empirical results indicate that financial development significantly reduces ESG risk volatility across Middle Eastern economies, implying that more advanced financial systems are associated with greater stability in environmental, social, and governance outcomes. However, this stabilizing effect is contingent on prevailing macroeconomic conditions. The interaction between financial development and macroeconomic volatility reveals that heightened volatility in exchange rates, natural gas rents, and output amplifies ESG risk volatility, even in economies with relatively well-developed financial systems. These findings carry important policy implications for Gulf countries pursuing economic diversification and sustainable development objectives. While continued strengthening of financial institutions is essential for enhancing ESG stability, the results highlight the necessity of complementary macroeconomic policies, particularly those aimed at reducing uncertainty, in order to fully harness the risk mitigating benefits of financial development for ESG performance.</p>