Prevalence of SDG-Washing: An Empirical Analysis on Large Listed European Companies

Abstract: The sustainable development goals (SDGs) were introduced in 2015 to steer worldwide progress towards a sustainable, inclusive and prosperous path. Since then companies have gradually taken up the goals and are today actively reporting contributions to the goals. However, with this, also a novel concept of SDG-washing has emerged – companies claiming to contribute to the SDGs but in reality not doing so meaningfully. To examine the prevalence of SDG-washing, an empirical analysis is conducted on 156 large listed European companies who belong to the STOXX 600 Europe Index. The reports and webpages of the companies are analyzed with a specially developed framework for identifying SDG-washing. The framework represents minimum requirements of reporting on the SDGs while claiming contributions to the goals. It was found that 139 firms claimed to contribute to the SDGs and of these 35% of companies were found to be SDG-washing. SDG-washing was identified through subconcepts – 27% of companies were found to be rainbow washing, 14% cherry-picking and also 14% reporting only on positive contributions and ignoring negative impacts on the SDGs. The results indicate that SDG-washing is not widely prevalent, but however still a considerable share of large listed European companies were found to be SDG-washing.