The integration of Sustainable Development Goals into businesses sustainability management: a reporting perspective

This study examines how Malaysian businesses integrate Sustainable Development Goals (SDGs) into their business sustainability practices. First, we capture the extent of SDG integration in three stages: SDG adoption, strategic SDG integration, and SDG as a priority at board level. We find that 68.2% of sample firms reported SDG adoption in 2019, with six SDGs prioritized per firm on average. However, only 17.1% of these firms demonstrated SDG as a priority at board level. We find that firm size, profitability, ownership concentration, and board size have a positive impact on SDG adoption, while firm size and board size also have a positive impact on the extent of SDG integration into firms’ business sustainability management. Next, using the publication of the Sustainability Reporting Guide 2018 as a natural experiment, we divide firms into three groups according to the pace of their SDG integration: innovators, immediate, and late adopters. We find that innovators tend to be larger in size and more profitable and have more concentrated ownership. Promoting SDG integration via mandatory reporting, a measure-manage approach, does progressively influence businesses to contribute to sustainable development. However, the extent and pace of SDG integration vary considerably among firms.