Reveals that SDG 3 adoption enhances ESG performance in European firms, implying strategic governance importance.
This study examines the impact of Sustainable Development Goal 3 (SDG 3; Good Health and Well‐being) adoption on firm‐level sustainability performance and investigates the moderating role of board size among European firms. Using a multi‐industry sample of 5154 firm‐year observations collected from listed firms across Europe, the study employs a dynamic System‐Generalized Method of Moments estimation approach to address endogeneity concerns and the dynamic nature of Environmental, social, and governance (ESG) performance. Firm‐level ESG and financial data were obtained from LSEG (London Stock Exchange Group) DataStream. The findings reveal that SDG 3 adoption positively and significantly influences both ESG Combined Score and Social Pillar Score, suggesting that firms integrating health and well‐being initiatives into their sustainability strategies achieve stronger sustainability performance and stakeholder engagement. However, board size negatively moderates these relationships, indicating that excessively large boards weaken the effectiveness of SDG‐oriented sustainability initiatives. The study contributes to the ESG and SDG literature by highlighting the strategic importance of SDG 3 adoption and governance efficiency in improving sustainability performance among European firms.
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Malouh et al. (2026) studied this question.
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