Municipal utilities and SDG adoption: Evidence from Austria and Germany

This paper explores how municipal utilities (MUs) in Austria and Germany adopt and integrate the United Nations’ Sustainable Development Goals (SDGs) into their strategies, strategic projects and management controls (MCs). MUs have a long tradition of delivering public infrastructure services, such as energy, water, and public transport, in the two focus countries. As important municipal enterprises, MUs must position themselves on a continuum between their public mission and their business orientation, and therefore act in a financially sustainable manner. Taking SDG adoption seriously is in line with the public mission orientation. Drawing on legitimacy theory, the study investigates whether MUs engage with the SDGs symbolically or substantively. The research is based on nineteen semi-structured interviews conducted with representatives from sixteen MUs, allowing for an in-depth qualitative analysis of strategic alignment, project implementation, and related MCs. The findings reveal considerable variation in SDG integration, showing that most MUs are still in an early, emerging stage of adoption, which is still at a symbolic level. By providing empirical insights from two countries with long-standing traditions of municipal service provision by local government-owned public utilities, the study contributes to the limited literature on SDG adoption in municipal enterprises and enhances understanding of the legitimacy dynamics shaping SDG practices in local state-owned entities.