Linking Corporate Social Responsibility Reporting With the UN Sustainable Development Goals: Evidence From the Portuguese Stock Market

Linking Corporate Social Responsibility Reporting With the UN Sustainable Development Goals: Evidence From the Portuguese Stock Market

Sónia Monteiro (Research Center on Accounting and Taxation, Portugal), Verónica Ribeiro (Research Center on Accounting and Taxation, Portugal) and Kátia Lemos (Research Center on Accounting and Taxation, Portugal)
DOI: 10.4018/978-1-7998-2128-1.ch007

Abstract

The approval of the 17 Sustainable Development Goals (SDG) within the 2030 United Nations Agenda represents a historic mark for sustainable development, allowing to companies to seek solutions that add value and solve the greatest global challenges, by linking organizational strategies and global priorities. Thus, listed companies will need to be able to assess their impact on the SDGs and review their strategies accordingly. Therefore, reporting can play a key role by informing the progress of listed companies in alignment with the SDGs. This article aims to analyse how Portuguese listed company reporting includes their contributions toward the SDGs. The study methodology is based on content analysis of the sustainability reports (SR) and non-financial statements (NFS) published in 2017, seeking to characterize the Portuguese listed companies that are concerned with SDG-related disclosure. The results indicate that from a sample of 46 listed companies, only 12 published SR or NFS, but 9 companies made the alignment with the UN goals.
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Introduction

In 2015, Member States of the United Nations (UN) adopted an ambitious agenda for poverty eradication and global economic, social and environmental development until 2030, known as Agenda 2030, containing 17 Sustainable Development Goals (SDGs) and 169 targets. This agenda, adopted by almost all countries in the world, define the priorities and requires global action by governments, business, and civil society.

The SDGs provides an opportunity to create and implement solutions and technologies that address the greatest global challenges, helping to link organizational strategies and global priorities. It is therefore important at this point to assess how organizational practices can be developed in order to meet the goals. The SDGs provide an integrated framework for future-oriented Corporate Social Responsibility (CSR) engagement (Schönherr et al., 2017). CSR assumes a voluntary character of the organizations towards the impacts of their activities in society and the environment, through a transparent and ethical behavior that contributes to Sustainable Development. CSR and SDGs together have potential to develop an interconnected model for sustainable growth. CSR creates a balance between economic interests, environmental needs and social expectations by integrating the spirit of Sustainable Development into the business strategy (Behringer & Szegedi, 2016).

The way in which organizations evaluate their contributions to the SDGs is the key to informing and shaping future engagement and action. Thus, organizations will need to be able to assess their impact on the achievement of the SDGs and review their strategies and practices accordingly, wich requires to collect and report new data. In this sense, it is important to align the organizations' strategy and the corporate reporting with the SDGs, giving the stakeholders the current level of commitment to these goals.

Among the goals of Agenda 2030, the target 12.6 that encourages companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle. The development of CSR/sustainability reporting models in the last years leads companies wordwide to disseminate information related to sustainable developmemt (KPMG, 2017). However, none of the sustainability/non-financial reporting frameworks (such as those of the Global Reporting Initiative and the International Integrated Reporting Council) include specific guidance on SDGs disclosures. Thus, the linkage of SDGs into corporate reporting is still at a very embryonic stage and it is, therefore, necessary to promote their progress.

The main level of the 2030 Agenda implementation being undoubtedly national, each country has to establish how the SDGs should be implemented. Portugal embodies its strategic priorities for the implementation of the 2030 Agenda for Sustainable Development in the SDG 4, 5, 9, 10, 13, and 14. As other UN member states, Portugal has been strongly involved in the international efforts undertaken to align their respective policies and instruments to the SDGs. A first UN report produced in 2019 by independent scientists, titled “The Future is Now: Science for Sustainable Development,”, assess the compliance with the SDGs adopted four years ago. The 10 most sustainable developing countries are members of the European Union: the first on the list is Denmark; Sweden, Finland, France and Austria are the following countries.

With 76.4 points out of a maximum of 100, this report ranks Portugal among the 30 most sustainable countries of the world (position 26th out of 162 countries evaluated). A concerted and effective corporate action towards Sustainable Development is, therefore, possible if Portuguese companies align their activities to incorporate the SDGs, meeting the mission defined at national level. Thus, it is important to analyze whether companies are monitoring and reporting their impacts in relation to their alignment with the SDGs.

SDGs reporting being an emerging phenomenon there are few empirical studies exploring SGDs reporting practices . To the best of the authors’ knowledge this is the first paper that provides some insights into reporting’s linkage with the SDGs from a Portuguese perspective. This study aims to verify if Portuguese listed companies are disclosing information about theirs practices to promote SDGs and about the impact of their activities on SDGs achievement. For this purpose, a content analysis of their sustainability reports and/or non-financial statetments will be conducted, seeking to characterize the listed companies that are concerned with SDGs-related disclosure.This study adds to the international research on SDG reporting by providing empirical data from a country, Portugal, where empirical evidence is still relatively limited.

Key Terms in this Chapter

Agenda 2030: The 2030 Agenda for Sustainable Development was approved by the United Nations General Assembly, in September 2015, and represents a new commitment to fighting poverty and promoting a truly sustainable and global development model. Endorsed by the 193 UN member countries, this Agenda includes 17 Sustainable Development Goals (SDG) and 169 measures, which must be implemented in all countries of the world.

Sustainability Report: It is one of the main ways for an organization to report on its sustainability practices. Through the report the organization disclosures social, economic and environmental indicators resulting from its activity. When prepared according to clear guidelines, such as the Global Reporting Initiative (GRI), it is an important communication and management tool.

Sustainable Development: It is a development model that enables us to meet the needs of the present without compromising the ability of future generations to meet their own needs. The concept of sustainable development seeks to harmonize the objectives of economic development, social development and environmental conservation. This concept waa internationally recognized and formalized by the United Nations in the Brundtland Report (1987) AU94: The in-text citation "Brundtland Report (1987)" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. .

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