Relative Sustainable Development Goals (SDG) Information Quality: An exploratory analysis of South African state-owned enterprises disclosures

Abstract

Orientation/context: Following the introduction of the United Nations Sustainable Development Goals (SDGs), there arose significant public anticipation for businesses to conform, in their operations, to these objectives and report on their progress toward alignment. State-owned enterprises (SOEs) in South Africa are created to be sustainable in the short, medium, and long term to advance the social, environmental, and economic needs of the public. It is therefore important to recognise that these entities can be valuable resources to be used in the achievement of the SDGs for South Africa. Against this backdrop, this study underscores the importance for SOEs to adopt sustainable practices and seamlessly incorporate SDG information into their corporate reporting cycle. Purpose – The purpose of this study is to evaluate the quality of SDG information disclosed in the integrated or annual reports of South African SOEs listed under Schedule 2 and 3B of the Public Finance Management Act (PFMA). This research also focuses on identifying those SDGs to which SOEs contribute the most with respect to corporate reporting quality. Design/methodology/approach – This study examined the integrated/annual reports of SOEs listed in Schedule 2 and 3B of the PFMA for the 2022 year-end. A detailed content analysis was employed, utilising a constructed quality measure that amalgamates various indicators from sustainability reporting literature, to gauge the quality of SDG disclosures. The emphasis placed on SDG information, the inclusion of qualitative, quantitative, and monetary disclosures, and the substance (boilerplate or committed) of disclosures are considered. The balance and comparability of disclosures as well as the ease with which SDG information can be interpreted based on the use of infographics are also included as quality indicators. These indicators are evaluated at the overall report level as well as within the scope of each of the 17 SDGs. Findings – The results show that the SDG information disclosed by the SOEs is mainly symbolic, including boilerplate, unbalanced, inaccessible and mainly qualitative information without really showing any information regarding the progress of corporate sustainability performance. Consequently, there is doubt about the degree to which the integrated or annual reports can be readily understood and effectively utilised to assess the SOEs’ overall performance concerning their contribution to the SDGs. Originality/value – Limited research has been conducted on public sector sustainability or SDG reporting in South Africa. The study contributes to the growing body of SDG reporting research in the public sector, by revealing new insights that could provide guidance to policymakers and those charged with governance on how to improve sustainability and SDG reporting. Furthermore, the results reveal the quality of SOEs’ SDG disclosures, which can be incorporated in stakeholders’ decision-making processes, facilitating more ii useful decisions to be taken. The proposed quality measure offers a valuable resource for scholars and professionals who wish to assess and analyse specific elements of report quality