The integration of the United Nations Sustainable Development Goals (SDGs) into financial markets has emerged as a pivotal mechanism for advancing global sustainability, yet the institutional pathways through which capital market pressures translate into corporate sustainability action remain undertheorized. This paper addresses this gap by proposing a novel conceptual framework that positions listed companies as institutional intermediaries-critical conduits through which sustainability norms, investor expectations, and regulatory mandates are transmitted from capital markets to tangible SDG related outcomes. Drawing on institutional theory, corporate governance, and sustainable finance literature, the study develops a comprehensive model elucidating how external institutional logics are internalized within firms through mechanisms such as regulatory compliance, environmental, social, and governance (ESG) disclosure practices, investor engagement, and board level governance structures. The analysis reveals that listed firms do not merely respond passively to sustainability demands but actively mediate between abstract global agendas and operational business strategies, thereby enabling the embedding of SDG oriented responsibilities into core corporate functions. Through sectoral case illustrations in energy, finance, and manufacturing, as well as cross national comparisons across the United States, European Union, and China, the paper demonstrates how variations in institutional environments shape the efficacy and authenticity of this mediation process. Particular attention is paid to the conditions under which institutional transmission results in substantive change versus symbolic conformity, highlighting the risks of decoupling and greenwashing in the absence of robust accountability frameworks. Theoretical implications underscore the importance of reconceptualizing corporations not only as economic actors but as institutional agents capable of reshaping the alignment between financial systems and societal goals. Furthermore, the study offers actionable insights for policymakers seeking to strengthen the regulatory infrastructure supporting SDG integration and for corporate leaders aiming to leverage their intermediary role in driving long-term, stakeholder-oriented transformation. By bridging macro level institutional dynamics with micro level organizational practices, this research advances understanding of market-based sustainability governance and calls for future empirical investigations into the longitudinal and cross sectoral dimensions of institutional mediation.
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Share and Cite
Lyu, Q. (2025) Listed Companies as Institutional Intermediaries: A Theoretical Framework for the Transmission Mechanism between Capital Markets and the Sustainable Development Goals. Hong Kong Financial Bulletin, 1(4), 1-13.