Embedding Countries Governance in Assessing Companies' Sustainable Development Goals (SDGs) Reporting: A Quantitative Analysis

Abstract

The United Nations Sustainable Development Summit in New York in September 2015 resulted in a tumultuous period for the companies in their quest to support the 17 Sustainable Development Goals (SDGs). The adoption of SDGs by all United Nations member states targets ending poverty and other deprivations, developing strategies to improve health and education, reducing inequality, and spurring economic growth while tackling climate change and working to preserve oceans and forests. This paper aims to assess the influence of countries' governance six dimensions (Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption) on European companies' Sustainable Development Goals (SDGs) reporting from 2019 to 2021. To achieve this goal, quantitative research was conducted through linear parametric regressions. The econometric analysis is based on six regression equations, one for each countries' governance dimension, data being collected from Thomson Reuters, World Bank Governance Indicator, and International Monetary Fund databases. The sample includes 2542 companies headquartered in Europe, with 6644 panel data observations highlighted. The results show that the indicators regarding countries’ governance negatively influence companies' SDGs reporting. This study fills the gap in countries' governance research in relation to companies' SDGs reporting, which helps develop future research. Therefore, future research should address other methods of quantifying the score of companies' SDGs reporting. Furthermore, this research may be extended to all 193 United Nations member states to investigate the impact of SDGs reporting on country performance.