Stakeholder Engagement and <scp>SDG</scp> Implementation: Driving Environmental Performance in European Public Companies

ABSTRACT Environmental preservation has emerged as a critical imperative in the global business agenda. Corporations now recognize the imperative of integrating a dedicated commitment to the natural environment as a strategic necessity in their competitive endeavors. However, the complex interplay between stakeholder engagement, sustainable development goals (SDGs) and environmental performance (EP) remains underexplored. In addressing this knowledge gap, our study contributes to stakeholder theory through a comprehensive analysis of the influence of stakeholder engagement and SDGs on EP. Using panel data analysis on a cross‐country sample of 1460 European public companies from 2017 to 2021, we find that both stakeholder engagement and commitment to SDGs—particularly Goals 7 (affordable and clean energy) and 12 (responsible consumption and production)—significantly enhance corporate EP. Our findings contribute to stakeholder theory by revealing the mechanisms through which stakeholder integration and SDG alignment shape environmental strategies.