The Sustainable Development Goals and corporate sustainability performance: Mapping, extent and determinants

Abstract

This study develops a novel framework by hand-mapping the Sustainable Development Goals (SDGs) and their targets with a firm's sustainability practices, reflected in its Environmental, Social and Governance (ESG) scores. Our mapping provides an actionable solution for firms to identify where the SDGs are connected with their ESG performance and accordingly tangibly measure their progress towards achieving the SDGs. We show that there are particular SDGs and targets which are more relevant to the business sector than others. We also investigate how firm-specific characteristics can help explain variation in corporate sustainability performance and find that profitable, larger and less leveraged companies are more likely to exhibit better corporate sustainability performance. These findings carry significant implications for academics, firms, and investors. The mapping can be used as a guide to understand the linkages between ESG issues, corporate sustainability performance and the SDGs, and to quantitatively evaluate firms' progress towards implementing the SDGs using available ESG performance indicators. Our study also contributes to research on corporate sustainability performance in the context of emerging markets.