Exploring the determinants and effects of SDG reporting on corporate performance in an emerging market
List of Authors
  • Chia Hua Sim , Chorng Yuan Fung

Keyword
  • SDG reporting, determinants, corporate performance

Abstract
  • The United Nations 2030 Agenda for Sustainable Development requires companies worldwide to engage with the Sustainable Development Goals (SDGs). Given the relatively recent focus on this topic, researchers noted that there is still much to learn about how SDGs are implemented within business practices and the reporting of their outcomes and impacts. Despite increased attention to non-financial information in annual reports, what drives firms to disclose SDGs remains unclear. Meanwhile, despite growing interest in SDG disclosure, the actual value market assigned to this information has yet to be determined. Hence, this paper proposes a conceptual framework to identify the determinants of SDG disclosure among Malaysian listed firms and examine its potential impact on the financial and market performance of corporations. The proposed study will also examine how industry sensitivity moderates the relationship between SDG disclosures and firm performance. Specifically, this paper provides an overview of the study's background, defines the problem statement, and reviews the current literature on social, sustainability, and SDG reporting. In doing so, it reveals the existing knowledge gaps regarding SDG reporting as non-financial information disclosed by publicly listed companies. Further, it illustrates the theoretical perspectives that explain how firm characteristics affect SDG disclosure and the impact of such reporting, leading to the formulation of hypotheses. In the context of emerging markets, the findings will provide regulatory authorities and standard-setters greater insights into the key drivers of firms' engagement with SDG disclosure. The outcome will be helpful for national regulators in assessing whether SDG reporting should be mandatory or made voluntary, considering the local context and the existing state of SDG reporting. The study is also expected to help inform listed companies in emerging economies on the potential economic justification for the commitment of effort and financial resources to engage closely with higher expectations of SDG reporting.

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