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1. Introduction
As environmental, social and governance (ESG) considerations have gained significant global trends, the management and implementation of ESG have become a considerable concern for both corporate entities and investors alike (Amel-Zadeh and Serafeim, 2018; Kotsantonis et al., 2016). To enhance investment attractiveness, companies are increasingly disclosing their ESG performance (Saad and Strauss, 2020); however, they are faced with the obstacle of the absence of standardized ESG metrics (World Economic Forum, 2022). In response to this challenge, some companies have turned to utilizing the Sustainable Development Goals (SDGs) adopted by the United Nations (UN) in September 2015 as a guide for ESG disclosure standards (Blasco et al., 2018). It is recognized that ESG and SDGs are interconnected, and the pragmatic framework provided by SDGs serves as a possible starting point for companies to implement ESG (Berenberg, 2018). Consequently, an analysis of the relationship between these two concepts in business activities can aid in explaining a company’s ESG performance (Amel-Zadeh et al., 2021). Nonetheless, measuring a company’s ESG alignment with the SDGs and determining the extent of the company’s contribution to each SDG are not a straightforward task (Khaled et al., 2021). In light of these challenges, a primary objective of this study is to quantitatively assess SDG-related ESG disclosures and furnish information that can be utilized to evaluate corporate ESG performance, thereby supporting investment decision-making.
Companies’ disclosures, corporate social responsibility (CSR) reports and sustainability reports are publicly available source that allows investors to verify a company’s ESG activities and performance. In particular, Form 10-K, an annual report submitted by public companies to the U.S. Securities and Exchange Commission (SEC), is considered a valuable source of data for business analysis (Li, 2010; Yuthas et al., 2002). It contains a comprehensive overview of a company’s annual management activities, including both qualitative data, such as industry conditions, forecasts and investment plans, and quantitative data, such as financial statements. Some U.S. public companies have been voluntarily disclosing information about their non-financial management activities through Form 10-K even before the increased interest in ESG and SDGs. Form 10-K has been used as the primary raw data in various studies that analyzed non-financial activities of companies, such as climate change risk (Doran and Quinn, 2008),...