Factors Influencing the Disclosure of SDG Activities at the Corporate Level in the Iranian Stock Market from 2016 to 2023

Abstract

This study examines the factors influencing the disclosure of information related to the Sustainable Development Goals (SDGs) and its impact on corporate value. Utilizing data from firms listed on the Tehran Stock Exchange (TSE) from 2016 to 2023, this study analyzes the relationships between SDG disclosure and corporate value (TOBINQ) while considering the moderating roles of stakeholder engagement, economic development, and good governance. The research findings indicate that SDG disclosure has a generally positive and significant impact on corporate value. Specifically, the coefficient of 2.203 (p<0.001) for SDG_DISC in the regression models suggests that companies engaging in SDG-related disclosures have been able to attract greater market value. These results align with prior studies on the relationship between corporate social responsibility and firm value. The role of moderating variables has also been examined in this study. Notably, the interaction between SDG disclosure and stakeholder engagement, with a coefficient of 0.159 (p<0.01), indicates that firms actively engaging with their stakeholders can derive greater value from SDG disclosure. Additionally, the interaction between SDG disclosure and good governance, with a coefficient of 2.086 (p<0.001), underscores the importance of effective governance structures in enhancing corporate value. However, the findings also highlight existing challenges in adopting and implementing SDGs at the corporate level, as the SDG disclosure rate among firms remains significantly low (mean = 0.042). This underscores the need for increased awareness and education on the importance of SDG-related disclosures and their benefits for companies and stakeholders. Ultimately, this study recommends that regulatory and governmental bodies play an active role in promoting SDG disclosure by establishing policies and regulations that encourage transparency in this area. Future research can further explore the determinants of SDG disclosure and its implications for firms’ financial and social performance.