The Link between Corporate ESG Performance and the UN Sustainable Development Goals

Abstract

Abstract There is a growing interest in the contribution of organizations to the achievement of sustainable development goals worldwide, with the involvement of various actors, such as governments, regulators, private entities, public interest entities, financial institutions, and civil society. The alignment between environmental, social and governance (ESG) performance and sustainable development goals helps academics and practitioners in observing corporate contributions to sustainable growth, both at micro and macroeconomic levels. There are few studies that analyze the association between corporate ESG performance and the United Nations Sustainable Development Goals (UN SDGs), or the contribution of company ESG indicators to sustainability. Thus, the aim of this study is to analyze such relationships in a case study for which an original mapping is proposed. Data were collected from Refinitiv Eikon, for two companies (in the oil and gas and financial services sectors), located in Romania, for the financial year 2021. Interpretative analysis was applied to the proposed mapping of sustainability practices reflected through ESG indicators, in relation to 17 SDGs. Our qualitative research included the computation of a total score based on the impact of ESG performance in pursuing the SDGs. Our results show that in Romania, the largest oil and gas company disclosed more information on ESG indicators and obtained a score (40) higher than the analyzed bank. The highest contribution to the achievement of the SDGs is related to the social pillar, especially the workforce and community dimensions. The bank obtained a lower score (30), while the most significant contribution to meeting the SDGs is linked to the environmental pillar, specifically emissions. Thus, corporate ESG performance is mapped to the SDGs, for entities activating in either financial or non-financial industries, with different importance allocated to each of the three ESG pillars. This research is important for various stakeholders, such as governments, business, and civil society, depending on the role within the organization, either direct or indirect.