Measuring corporate social responsibility: an evaluation of a new sustainable development goals index for Fortune 500 companies

Abstract

Purpose: The purpose of this study is to explore, develop, and evaluate a new sustainable development goals (SDG) index that quantifies corporate social responsibility (CSR). By providing a granular perspective with clear justification for methods, this index is more applicable to academic research in comparison with the CSR indices published by private companies. Design/methodology/approach: Focusing on the Fortune 500 companies in 2017, this study uses data from Bloomberg, ASSET4, and the Carbon Disclosure Project. A z-score was calculated for each variable, which was then aggregated according to the SDG indicator list to calculate each SDG score. Various robust analyses were conducted. Findings: The SDG index shows that companies tend to score worse on environment-related goals compared with social goals. Furthermore, for each SDG, there are differences across industrial sectors, a finding that is enabled by the more granular approach of this index. Additionally, the leaders and laggards are identified for each of the SDGs. Originality/value: This study identifies the methodological weaknesses of the existing CSR indices and introduces and evaluates an alternative index based on the SDGs. This alterative index provides methodological clarity and granularity of data, which were lacking in previously established indices.