Embedding sustainability into bank strategy: implications for sustainable development goals reporting

ABSTRACT

The United Nations’ Sustainable Development Goals (SDGs) highlight the most pressing issues that need to be resolved by the global community, including the Islamic banking industry, to ensure social equity, economic viability, and environmental protection. Accordingly, this study aims to develop a practical framework for evaluating the sustainability reporting performance of Islamic banks in the purview of the SDGs. This study employed the most recent Global Reporting Initiative and religious sustainability indicators to establish the measurement framework for evaluating sustainability reporting in relation to the SDGs. Centering on the Malaysian Islamic banks, this study found that overall performance on corporate sustainability reporting is quite low, though it has increased over time from 2011–2020. The bank-wise analysis implies that the SDGs reporting differs for Islamic banks, where most of the banks outperform on SDGs disclosure scores. Further, the SDG-wise analysis indicates that SDG-9, SDG-17, SDG-11, and SDG-1 appear to have the highest disclosure scores. Nevertheless, SDG-16 revealed the least SDG disclosure score, indicating that the sampled Islamic banks do not provide complete information about addressing sustainability-related issues. The outcome of the study might be useful to the regulators and managers of Islamic banks in embedding sustainability into their strategy for reporting on SDGs. This will help in recognizing the strong and weak points of their sustainability reporting procedures regarding the SDGs.

KEYWORDS:

• Agenda 2030
• corporate social responsibility (CSR)
• millennium development goals (MDGs)
• triple bottom line (TBL)
• sustainability reporting
• environmental sustainability

Acknowledgments

The authors would like to thank the anonymous reviewers and the Editor-in-Chief Prof. Guofan Shao for their constructive comments during the review process that improved the quality of the manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The datasets generated and analyzed during the current study are available from the corresponding author upon reasonable request.