How and why companies adopt SDGs: evidence from top managers of Sri Lankan listed companies

Abstract

Purpose

Motivated by the dearth of studies examining how and why managers adopt sustainable development goals (SDGs), particularly in developing countries struggling with economic, environmental and social problems, this study aims to investigate the rationales and business management approaches for adopting and integrating SDGs in the Sri Lankan corporate context, which is gradually adopting sustainable practices and sustainability reporting.

Design/methodology/approach

A qualitative approach was adopted to provide deeper insights and an understanding of corporate engagement with SDGs, offering a richer analysis of rationales and business management approaches that quantitative methods may overlook. Top Management attached to the sustainability function of seven companies that had varying levels of SDG-related disclosures were interviewed based on Santos and Silva Bastos’s (2021) theoretical framework for understanding the rationale and the priority management level for SDG adoption.

Findings

The main motivation to adopt SDGs stems from contextual and ethical rationales, with the influence of the United Nations Global Compact serving as a notable contextual factor. The prioritized levels of management focus for integrating SDGs were strategic and operational focuses. SDGs enhance the existing strategic position established by the sustainability efforts of the companies. Even though strategic and operational management focuses were highlighted for integrating SDGs, the elements of sustainability were present across all the management levels (normative, strategic and operational), emphasizing that these focuses should interrelate to effectively integrate SDGs. Further analysis revealed that all three underlying rationales – ethical, contextual and economic – influence managers to integrate SDGs across different management focuses.

Originality/value

To the best of the authors’ knowledge, this study is among the first few to contribute to the handful of studies holistically looking at the drivers and management approaches to engaging with SDGs from the perspective of a developing country. Furthermore, it extends the theoretical framework developed by Santos and Silva Bastos (2021) through the findings to show that all underlying rationales impact the integration of SDGs at different management focuses.

Citation

Weerasinghe, T., Gunarathne, N. and Samudrage, D. (2025), "How and why companies adopt SDGs: evidence from top managers of Sri Lankan listed companies", Measuring Business Excellence, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MBE-06-2024-0089