Investigation on the Sustainable Development Goals (SDGs) Disclosure Effect on Firms Performance

The Sustainable Development Goals (SDGs) consist of 17 objectives designed to tackle global issues, and many firms align with this United Nations initiative by publicly reporting their SDG-related efforts. However, since SDG disclosure is voluntary, previous studies have highlighted that some firms exhibit limited involvement, particularly when the perceived benefits or impacts of such disclosures are minimal. This research explores the relationship between SDGs disclosure and corporate performance, using Return on Equity (ROE) as the performance measure. The data on SDG disclosures and ROE were collected through content analysis of annual, integrated, and sustainability reports. The research, which employed simple linear regression, focuses on a sample of 148 firms from the consumer products and services sector listed on Bursa Malaysia over a five-year period. The findings indicate a moderate positive correlation between SDGs disclosure and ROE, with regression results confirming the influence of SDGs disclosure. However, the R-squared value of 0.044 suggests that additional factors also play a role in determining financial performance. This research concludes that while SDG disclosures can contribute to enhanced financial performance, they are not the sole determinant. Therefore, firms are recommended to integrate SDG initiatives into broader corporate strategies, and further research into other contributing factors is encouraged.