What are the drivers behind Portuguese companies’ reporting on sustainable development goals?

Abstract

Objective: This study explores how large Portuguese companies have started to integrate the SDGs into their non-financial reporting practices, and analyses some potential drivers of SDG reporting.

Methodology: Standalone non-financial reports were collected from 2016 to 2022, resulting in a total of 161 reports from 41 companies. Through a content analysis of the non-financial reports, an index was developed to measure the level of SDG disclosure.

Results: The results show that there is an increasing trend of reporting on the SDGs among large Portuguese companies, albeit at a slow and modest pace, mainly through sustainability reports. On average, Portuguese companies disclose on half of the 17 SDGs. In terms of the determinants of SDG reporting, listing, industry, adherence to the GRI framework and external assurance of reports by a Big4 firm were found to be determinants of SDG disclosure in our sample. Contrary to our expectations, ISO certification, sustainability committee and extended reporting are not significantly associated with the level of SDG disclosure by large Portuguese companies.

Limitations: Our study has limitations, notably a small sample size. The SDG disclosure index we used only indicates whether information on SDGs is disclosed, without assessing content extent or quality, potentially limiting stakeholder value.

Practical implications: Companies aiming to improve SDG disclosure should consider adopting the GRI framework or seeking assurance from a Big 4 firm. Additionally, regulators could use our findings when designing policies aimed at enhancing SDG reporting.