This study investigates the nexus between firm-level Sustainable Development Goals (SDG) adoption and firm risk using a unique dataset of National Stock Exchange (NSE) 500 companies from 2019 to 2024. It constructs a novel SDG adoption index to assess this relationship and reveals a noteworthy reduction in firm risk associated with SDG adoption. The results remain robust after a battery of robustness checks, including endogeneity concerns using 2SLS IV and system GMM and sample selection bias through Heckman's two-stage methods. Furthermore, the mechanism test indicates that SDG adoption reduces firm risk by enhancing investor confidence, improving ESG performance, and reducing agency costs. In addition, heterogeneity analyses demonstrate that the impact is more accentuated for enterprises with higher information asymmetry, higher board gender diversity, and non-state ownership. The results carry significant implications for investors, corporations, and policymakers seeking to mitigate risk and foster sustainable practices, particularly within the context of the COVID-19 pandemic and emerging markets.

Geopolitical instability significantly impacts environmental sustainability, yet its role remains underexplored. This study investigates how geopolitical risk affects ecological footprints and carbon emissions, key proxies for environmental sustainability, using panel data from 27 countries (1990–2020). Panel quantile regression results show a significant relationship between increased geopolitical risk, ecological footprints, and carbon emissions, with coefficients ranging from 0.357 to 0.785 across quantiles in the case of ecological footprints and 0.939–1.961 for carbon emissions. We control the estimation for inflows of foreign direct investment, economic growth, environmental patents, stringency, trade, and population. Economic growth correlates with a decrease in environmental sustainability, while environmental sustainability demonstrates an inverse relationship with ecological footprint and carbon emissions. The findings have policy implications because they can guide policymakers to take risks emanating from geopolitical uncertainty, while formulating environmental policies. Moreover, addressing increased environmental innovation and enhancing coverage of carbon taxes can help maintain environmental sustainability.