Research News

The Interplay between Sustainable Development Goals and Country-Level Business Risk: A New Perspective

November 9, 2023

KU research offers insights to creating a sustainable and economically robust business environment for policymakers.


The world’s perception of sustainability has been encapsulated as meeting today’s needs without compromising the ability of future generations to meet their own. This ideal, encompassing the harmony of environmental, economic, and social balances, is the backbone of the Sustainable Development Goals (SDGs) introduced by the United Nations in 2015. Yet, as this harmony is pursued, the looming threats of sustainability risks — which cover environmental degradation, social disparities, and economic vulnerabilities — pose significant challenges to current and future generations.


Moreover, the notion of country-level business risk, which is the probability of encountering obstacles when engaging in business within a specific nation, further adds layers to the complex quilt of challenges. As businesses today operate in an increasingly interconnected global ecosystem, understanding the interdependencies between SDGs and business risks is paramount for creating a sustainable future.


A team of researchers including Khalifa University’s Dr. Mecit Can Emre Simsekler, Associate Professor of Management Science and Engineering, has developed a model to explore dependences among SDG risks and business risks to help policymakers mitigate business risks while contributing to national sustainability goals. Dr. Simsekler collaborated with Abroon Qazi, American University of Sharjah, and M.K.S Al-Mhdawi, Teesside University, with their results published in the Journal of Cleaner Production, a top 1% journal for sustainability and business.


Understanding country-level sustainability risks is crucial for minimizing operational disruptions and reputational damage while ensuring compliance with regulations and maintaining good investor relations.


While there have been studies around the relationship between aspects of sustainability and business risk, a comprehensive exploration of how all 17 SDG risks interplay with business risks in a networked environment is notably absent. Dr. Simsekler’s work aims to bridge this gap. By delving into the intricate web of relationships between each SDG risk and business risks, it provides a robust foundation for understanding the interdependencies and offers a roadmap for holistic decision-making.

For instance, while previous studies have underscored environmental performance as an indicator of business risk, this study’s findings illuminate the broader picture. The SDGs related to ‘quality education’, ‘no poverty’, and ‘affordable and clean energy’, representing social, economic, and environmental dimensions of sustainability respectively, are pivotal when understanding on the connection between SDGs and business risk.


This research also serves as a call for multi-stakeholder engagement. Addressing the intertwined challenges of SDGs requires a symphony of efforts from businesses, governments, civil society organizations and academia.


A key takeaway is the need to integrate sustainability considerations into traditional risk management processes. While the conventional risk frameworks have primarily revolved around financial risks, the evolving landscape necessitates a broader view, encapsulating sustainability risks.


While this study has shed light on the complex landscape of SDG risks and business risks, several avenues remain unexplored, such as the dynamic behavior of business and SDG risks, or the detailed strategies to mitigate these intertwined risks.

Dr. Simsekler says subsequent research could delve into the nuanced relationship between SDG risks and specific dimensions of business risk like financial or reputational risks. Such granular analysis can empower businesses with actionable insights tailored to their specific industry or operational scale. Moreover, understanding these associations across different scales – organizational to global – can offer a more holistic view of the intricate landscape of SDGs and business risks.


As the world strides towards a sustainable future, recognizing, understanding, and addressing the nexus between SDGs and business risks becomes paramount. This research serves as a beacon, guiding stakeholders through the complex maze of interdependencies and offering a blueprint for a balanced and harmonious future.

Jade Sterling 
Science Writer
9 November 2023