Integrating sustainable development goals into HRM in emerging markets: an empirical investigation of Indian and Chinese banks

It has become clear that we live in a human-driven era where human activity is both fundamental to and a threat to the dynamics of the planet, increasing the desire for sustainability (Sachs, 2012). The growing emphasis on social and environmental responsibility and sustainable performance has intensified pressure on corporations to set objectives beyond mere financial gain. This is especially critical for organizations in emerging markets, which operate in environments marked by widespread corruption, rising social inequalities, power imbalances within civil society, deforestation, and other challenges that create opportunities for corporate malfeasance (Cezarino et al., 2022). Additionally, lower income levels, limited awareness and sophistication regarding social and environmental issues, lower levels of product variety, and a predominant focus on immediate economic benefits contribute to diminished organizational sensitivity to respond to pressures to engage in sustainable business practices (Doh et al., 2015). This shift ultimately results in modern business practices moving away from a sole focus on shareholder value to a more stakeholder-oriented approach (Carroll, 1991, 1999).

A global survey of 2,800 enterprises found that 70% of these organizations consider sustainability to be a key focal point in their strategic goals and objectives (Kiron et al., 2012). Given the crucial role of HRM in a firm’s strategic management, HR practitioners worldwide—supported by professional organizations such as the Society for HRM (SHRM) in the USA, the UK’s Chartered Institute of Personnel and Development (CIPD), and the Australian Human Resource Institute (AHRI)—have acknowledged the significance of integrating HRM into corporate sustainability agendas. Consequently, they have developed numerous recommendations for effective engagement, which are regarded as best practices (CIPD, 2013, 2015; Cohen et al., 2012; Society for Human Resource Management, 2011).

In many organizations, HR professionals are responsible for implementing sustainability initiatives at the corporate level. These initiatives are supported by decision-making based on three underlying rationales; responding to external pressures, capitalizing on the business case for sustainability, and fulfilling the company’s moral obligations towards society (Guerci and Pedrini, 2014). In the HRM context, sustainable HRM intends to contribute to the success of the organization in a broader sense by preserving, regenerating, and developing the economic, environmental, social, and HR of the organization (Guerci et al., 2019). As such, the increasing focus on the long-term results of HRM has resulted in the view that HRM can contribute to achieving business sustainability objectives (Ehnert, 2009a, b). This is particularly important as in the last decade HRM has become a strategic partner with influence in organizational and strategic decision-making (Mitchell et al., 2013).

In addition to attention from practitioners, current HRM scholarship is working to understand the role organizations can play in achieving corporate sustainability—a discussion that initially emerged in the field of general management in the 1990s (e.g. Gladwin et al., 1995). This scholarly debate took a significant step forward with the work of Dyllick and Muff (2016), who argued that companies should prioritize contributing to the United Nations’ (UN) SDGs rather than focusing solely on traditional corporate sustainability objectives.

Emphasizing the SDGs can sometimes conflict with the goals of some organizations where the primary objective often revolves around financial performance and operational efficiency. This tension can lead to a method known as “SDG-washing,” where organizations metaphorically commit to SDGs without making considerable efforts to accomplish them, as explained by Heras-Saizarbitoria et al. (2022, p. 317). In 2015, the UN adopted the 2030 Agenda for Sustainable Development and established 17 SDGs for countries to achieve by 2030 (United Nations, n.d.). Additionally, the United Nations Development Program (UNDP), a leading UN initiative, was established in 2016 to support the achievement of these SDGs, particularly in emerging economies, by 2030 (Adeola et al., 2021).

The current understanding of the influence of organizations' efforts to become “more sustainable” on HRM and how HRM may effectively contribute to the achievement of SDGs is very limited (Aust et al., 2020; Bombiak, 2019; Brewster and Brookes, 2024). This is largely because the SDGs were designed as country-level goals for governments to achieve, rather than for organizations, even though the SDG 2030 agenda calls for cooperation from various stakeholders, including the business world (Brewster and Brookes, 2024). While governments play a role in articulating the goals and creating the necessary environment for political dialogue, businesses and other actors act as implementers, contributing to the achievement of the SDGs and enabling a collaborative approach supported by principles of shared responsibility. Scholars in the management science field have, therefore, been advocating for research to explore the connections between the SDGs and HRM (Bombiak, 2019; Hirsig et al., 2013).

HRM can significantly contribute to advancing the UN SDG 2030 agenda by integrating sustainability into its policies, practices, and strategic objectives as part of the sustainable HRM mission (see Guerci and Carollo, 2016). To support these initiatives, HR practitioners and scholars have primarily relied on the GRI framework (Cohen et al., 2010). However, the focus of this inquiry has been on comparing GRI indices without examining the effectiveness of these initiatives in enhancing the sustainability of HRM systems or their ability to contribute to the SDGs, creating a significant research gap in understanding how HRM is advancing the SDGs. Additionally, the World Business Council for Sustainable Development (WBCSD, 2018) reported the challenges organizations face in advancing the SDGs. According to their report, organizations view the SDGs as a strategic opportunity but lack a clear understanding of how to integrate them into their business operations. They also struggle to foster ownership of responsibility for advancing the SDGs. Given these challenges, exploring how HRM within organizations can contribute to achieving the SDGs is crucial. Therefore, the present study aimed to address two key research objectives:

• (1)

  To identify the HRM practices adopted by banking organizations (India and China) and their contribution to the achievement of SDGs (2) To integrate the SDGs into the HRM function as a core practice.

To address these questions, we propose that institutional theory (DiMaggio and Powell, 1983) provides a foundational framework for aligning HRM with the SDGs. This alignment can be achieved by structuring organizational practices to reflect societal values and expectations (Aust et al., 2018; Ren and Jackson, 2020). Institutional theory offers insights into how HRM practices can support the SDGs, for example, by promoting diversity, equity, and inclusion, enhancing employee well-being, and implementing environmentally sustainable practices. Through these efforts, organizations respond to institutional pressures and demonstrate a commitment to social responsibility.

This study examines how organizational HRM practices can support the implementation of SDGs. We reviewed sustainability reports from the top five financial sector organizations in China and India, focusing on sections that highlight HRM disclosure practices. The financial services sector was selected because it plays a critical role in the GRI framework’s economic, social, and environmental sustainability components, making it a suitable industry for this research. Furthermore, recognizing the sector’s substantial impact on sustainable progress, the financial services industry was the first to receive its own specialized set of GRI guidelines in 2008 (GRI, 2012). According to the ImPACT (Impact, Population, Affluence, Consumption, and Technology) analysis, China and India are the two primary emerging economies expected to have a major influence on global sustainability (Jarmo and Jari, 2016). Understanding the sustainability initiatives of these organizations is, therefore, essential. Chen et al. (2019) highlight efforts toward sustainability through land use management in these countries. Examining how organizations in China and India report their HRM practices and contribute to advancing SDG goals through these practices will provide valuable insights into their role in promoting sustainability.

The paper is divided into the following parts, first, it contextualizes the study’s relevance and objectives; second it reviews the literature on the alignment of HRM practices with SDGs; third characterizes the data collection methods and techniques; and fourth documents the analysis and discussion of the results; finally it concludes with implications and future research agenda.

The last decade has witnessed the rise of the social dimension in HRM research where management people and culture have taken the form of sustainable HRM (Duvnjak and Kohont, 2021). Sustainable HRM has been defined as “people management practices that take the development of social, environmental and human capital into account” (Guerci and Carollo, 2016, p. 221). Furthermore, Aust et al. (2020) categorised four types of sustainable HRM: socially responsible HRM, green HRM, triple bottom line HRM and common good HRM. The UN 2030 Agenda for SDGs consisting of 17 SGSs and its integration into various HRM practices such as recruitment, rewards, and training, health and safety has become an important standard and reference point for businesses (Aust et al., 2024; Chams and Garcia-Blandon, 2019) and as such many HRM practices and SDGs are interconnected (Brewster and Brookes, 2024). For instance, the goals of ending poverty (SDG 1), reducing inequalities (SDG 10), promoting good health and well-being (SDG 3), achieving gender equality (SDG 5), and ensuring decent work and economic growth (SDG 8) align closely with HRM research areas such as compensation systems (e.g. Gupta and Shaw, 2014; Suleman et al., 2022), employee well-being (Haak-Saheem et al., 2022), workforce diversity (O’Donovan, 2018; Triana et al., 2021), and quality working conditions (Cooke et al., 2019).

The alignment of HRM with SDG 8, which focuses on decent work and economic growth, involves the elevation of a work environment that prioritizes work quality, fair pay and employee well-being (Zhykharieva et al., 2021). The stakeholder-friendly concept of decent work is grounded in the common good argument that prioritizing human well-being, social justice, and dialogue is essential for achieving long-term competitiveness, economic prosperity, and a sustainable future (Aust et al., 2024). HRM practices that ensure employees have access to training and development opportunities, promote work-life balance and prioritize occupational health and safety contribute to the achievement of SDG 8. By supporting decent working conditions, HRM plays an important role in promoting sustainable economic growth and inclusivity, in line with SDG 8 goals.

Additionally, linking HRM to Sustainable Development Goal 10 (SDG 10), which focuses on reducing inequality, can include HRM practices that aim to promote diversity, inclusion and equal opportunities (Borges, 2021). There has been a rise in inequality in pay systems that has occurred in recent years (Brewster and Brookes, 2024). The HR manager can actively work to eliminate discrimination in recruitment processes, ensure equal pay and promote a work culture that respects diversity. By prioritizing fair treatment and creating an inclusive environment, HRM contributes to the broader goal of reducing inequality in SDG 10. It further enhances employees’ green attitudes and contributes to the attainment of this SDG goal (Chams and Garcia-Blandon, 2019).

Concerning Sustainable Development Goal 13 (SDG 13) on climate action, personnel can play a role in integrating environmentally sustainable practices within the organization (Yu et al., 2021). This may include developing policies that reduce the ecological footprint of the workplace, promote energy efficiency and encourage employees to behave in an environmentally friendly manner. Integrating climate-conscious initiatives into HRM is consistent with SDG 13 goals and contributes to addressing climate change and its impacts. Companies need to integrate sustainability into their core HRM strategies and practices and align their goals with broader global initiatives to achieve a more sustainable and just future.

In this paper, we use institutional theory to clarify the relationship between HRM and the SDGs, which provides a framework to examine how social norms, regulations, and organizational factors influence the integration of sustainable practices into HRM (Aust et al., 2018; Ren and Jackson, 2020). The institutional theory states that organizations are shaped by their broader institutional environment, including formal regulations, cultural norms, and informal expectations (Diaz-Carrion et al., 2021; Kramar, 2014; Xu et al., 2018; Tooranloo et al., 2017; Westerman et al., 2020). Here’s how institutional theory can explain the relationship between HRM and the SDGs.

Normative Isomorphism: According to institutional theory, organizations typically adopt practices that conform to social norms (Scott, 2005, 2013). In the context of HRM and the SDGs, organizations can align their HRM practices with the sustainability principles outlined in the SDGs and meet the social expectations and increasing emphasis on corporate social responsibility. Regulatory isomorphism: Institutional theory values the influence of formal regulations and policies at national and international levels on the shaping of HRM practices (Bruton et al., 2010; Scott, 1995, 2005, 2013; Stephan et al., 2015). Organizations can change their HRM approaches to comply with regulations regarding labour practices, diversity, and environmental sustainability. All of these regulations can be linked to specific SDGs. Cultural-cognitive Isomorphism: This theoretical dimension emphasizes the role of shared beliefs and values in shaping organizational behavior (Stephan et al., 2015). Once sustainability is recognized as a cultural norm, organizations can integrate sustainable HRM practices to demonstrate their commitment to the social values enshrined in the SDGs.

Mimetic isomorphism: As the theory suggests, organizations often imitate the practices of successful companies (Martínez-Ferrero and García Sánchez, 2017). In the context of HRM and the SDGs, companies can strengthen their legitimacy and competitiveness by adopting sustainable HRM practices found in other organizations that are successful in aligning with the SDGs. Internalization: Institutional theory also considers how organizations internalize institutional pressures (Diaz-Carrion et al., 2021; Greenwood et al., 2017; Oliver, 1991). In the case of HRM and the SDGs, organizations can adopt sustainable HRM practices as part of their identity, motivated by a commitment to the well-being of society and the achievement of specific SDGs. Institutional theory provides a perspective for understanding how external institutional forces, consisting of social norms, regulations, and organizational practices, influence the incorporation of sustainable HRM practices in line with the principles set out in the SDGs. This theoretical framework explains the motivations and mechanisms by which organizations incorporate sustainability into their HRM strategies.

Despite the growing scholarly research on the role of SDGs in the HRM domain, limited research focused on the real contribution of institutional pressures on the extent of SDG engagement (Galeazzo et al., 2024), especially in the context of the HRM function in organizations. Therefore, we consider the weak nature of the institutions present in emerging markets and the significant challenge they pose for organizations in these countries to implement and promote SDGs in their HRM function. Furthermore, we consider the nuanced differences that exist across the emerging market institutions by comparing organizations in the two leading economies of China and India to understand whether the different pressures enable different SDG engagement across the HRM function. This will help us to shed light on the sustainable business practices of organizations in emerging markets.

This exploratory study employed secondary data from sustainability and annual reports, which is considered a well-established approach in social sciences, specifically in sustainability research (Perdeli Demirkan et al., 2021). Examining and analysing these reports allows for the identification and understanding of current sustainability practices and emerging patterns in organizational sustainability reporting. By examining existing practices, this approach provides foundational insights into sustainability initiatives, setting the stage for future, more targeted research.

The first step was to explore the HRM practices reported by companies in their sustainability reports. We used the Global Standards for Sustainability Reporting (2021), also known as GRI Standards, specifically the labour-related material topics (series-400), as a guide to understanding organizational impacts on social systems. Based on the GRI Standards—series 400—organizations disclose information on social topics relevant to HRM practices, including employment, labor/management relations, occupational health and safety, training and education, diversity and equal opportunities, gender equality in pay, and non-discrimination. These HRM practices form the foundation of our study.

The next step was to explore the targets set in SDG 8, 10, and 13 that align with the HRM practices. The targets and indicators are mentioned on the UN Website. From those indicators, we identified the themes that align with HRM practices. According to the targets and indicators set in each of these goals, there were overlapping themes in HRM practices. To achieve the research objectives and ensure no target or indicator was overlooked, each researcher initially analysed the targets and indicators (obtained through the UN Website) of SDGs 8, 10, and 13 independently. Using the GRI standards, preliminary categories were developed related to HRM practices. Common themes were identified, and the final categorization emerged through consensus (Hsieh and Shannon, 2005). The HRM practices on which organizations disclose their social impacts include gender equality in hiring, pay equity, the health and safety of women employees, maternity and paternity leave, inclusion in training and development, training on human rights, and sustainability initiatives raising awareness of climate-related matters. A summary of this analysis is presented in Figure 1 and the themes are further explained in the results section.

The next step was to explore the sustainability reports and identify reporting trends on the selected SDG goals. According to the survey of sustainability conducted by KPMG (2022), many large-scale organizations in the world have started providing comprehensive sustainability reports. For the present study, the financial services sector was chosen due to its vital role in protecting the long-term viability of sustainable businesses (Jeucken, 2010). The financial sector plays a crucial role in advocating sustainable development and impacting economic growth at both national and regional levels (Louche et al., 2019; Shrivastava et al., 2019). The demand for sustainable corporate behaviour has led to significant commercial prospects for banks, making sustainable banking practices essential (Weber, 2012; Rahman et al., 2013). As this sector has better reporting on profitability, it has been always the subject of close examination by stakeholders and the broader community (Buggan, 2012; Frenz et al., 2005).

We selected financial organizations operating in China and India to understand the application of SDGs in our research. The banking sector was chosen as the research context because banks serve as critical intermediaries in the economy (Sengupta et al., 2023). Their intermediary role positions them to boost sustainable practices among businesses, governments, and individuals, enabling positive societal changes (Louche et al., 2019). Focusing specifically on India and China is substantial, as these countries are among the largest, fastest-growing, and most dominant emerging economies, collectively accounting for over a third of the global population and acting as dynamic forces behind global economic growth in recent decades (Hubacek, 2007). By examining banks in these contexts, we can better comprehend their potential influence on advancing SDGs and promoting sustainability on a larger scale.

The Indian banking industry has undergone significant reforms and restructuring, with an increasing emphasis on sustainable practices such as green banking, sustainable finance, and gender diversity, driven by regulatory changes and societal pressures (Vennila and Sina, 2022; Sharma and Choubey, 2022; Sharma and Kumar, 2024; Kumar et al., 2024). Indian banks are now required to integrate environmental and social considerations into their operations, lending practices, and human resource policies (Kumar and Prakash, 2020; Raut et al., 2017. Similarly, the Chinese banking sector has experienced rapid growth and transformation, with the government pushing for greater sustainability and responsible lending (Bai, 2011; Dong et al., 2023; Lee, 2020). Chinese banks are also under pressure to align their practices with international standards and contribute to the country’s ambitious climate and sustainability goals. Their influence and adoption of sustainable practices can have far-reaching implications for the broader financial sector and the achievement of the United Nations' SDGs. However, it is noteworthy that these two nations do not rank among the top 50 most sustainable countries globally according to Robeco (2023) and the Environmental Performance Index (EPI) of 2023.

To determine the leading financial institutions for the study, the Forbes 2023 Global 2000 rating list was utilized. The Global 2000 ranking is determined by evaluating prominent corporations using four key indicators: sales, profitability, assets, and market value (Forbes, 2023). Using these four indicators we selected the top five banks from India and China as the sample for our study. The choice to focus just on major corporations (regardless of the private/public status) was made after considering prior studies on sustainability, which suggest that the size of a company is closely linked to the scope and calibre of its sustainability reporting (Hahn and Kühnen, 2013). We obtained the sustainability reports and annual reports of the State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank from India, and the sustainability reports and annual reports of ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, and China Merchants Bank from China. Given that the corporations do not release reports all at once, we utilized the reports that were issued throughout the timeframe of July 2022 to June 2023. The corporations also do not utilize a single format for reporting and hence the researcher also relied on extracting relevant information from annual reports.

After finalizing the sample and downloading the sustainability reports of the selected financial institutions, the researchers thoroughly examined and analysed the integrated annual reports and sustainability reports (also referred to as business responsibility reports or Environmental, Social, and Governance reports), with a focus on the “Social” section reporting to explore HRM practices. Given the nature of the research question and objectives, which aim to identify existing HRM practices and their contribution to the achievement of the SDGs, the comprehensive disclosure of social topics in the sustainability reports provides valid and accurate information (Beattie et al., 2004). Content analysis is commonly used in sustainability and CSR reporting literature to identify the presence or absence of indicators (Campopiano and De Massis, 2015; Ehnert et al., 2016; Vuontisjärvi, 2006). However, our focus is on exploring and comparing what is reported within those indicators, rather than merely identifying their presence or absence. To achieve this, we used a descriptive approach, reviewing the sustainability and annual reports individually to identify the HRM practices reported. The findings are summarized in Table 1.

The present study aimed to identify the existing HRM practices adopted by the banking organizations (India and China) and their disclosure for the achievement of the SDGs. It also attempts to uncover ways in which HRM could offer tools to embed sustainability practices within the companies. In the pursuit of an equitable and fair world, organizations in emerging markets, especially key players like India and China, will play an instrumental role in using their HRM functions to promote and meet the UN’s SDGs (Campos-Garcia et al., 2023). Specifically, the banking sector in both countries contributes significantly to their nation’s economic growth and thus can use its HRM in the integration of SDGs 8 (i.e. decent work and economic growth), 10 (reduced inequalities) and 13 (climate action) with key HRM practices namely, recruitment and selection, rewards and payments, workplace health and safety, training and development, and initiative towards environmental sustainability. Alignment using HRM functions enables organizations to enhance their branding, seek a purpose-driven work environment and meaningfully engage in global sustainability efforts. In the next section, we will discuss the findings based on the information obtained from the business responsibility reports as outlined in Table 1.

Figure 1 was created by the researchers for this study to integrate the HRM practices that align with SDGs in sustainable reports. Most of the sustainable reports have reported on gender equality in hiring that aligns with SDG 8: Decent Work and Economic Growth. Organizations could foster diversity and inclusion by ensuring fair recruitment and selection practices and this will further contribute to sustained economic growth and career opportunities for all regardless of gender.

Based on the analysis of the secondary data from the sustainable reports presented in Table 1, we found that Indian banks employ a sizeable workforce while the bank’s gender distribution shows a balanced representation of males and females, even though the percentages vary across the individual banks. Although the proportion of male officers is higher than females, there are notable attempts by Indian banks to incorporate people from minority groups or those with disabilities. This is not surprising in a country like India, where diversity is a hallmark. The banking industry can further embrace hiring practices that promote equality across genders, castes, and communities (Nkomo et al., 2015). There is evidence to conclude that the focus in India extends beyond economic growth to include social inclusion, with a commitment to address inequalities through diversity management (Vohra et al., 2020). In turn, this also indicates the Indian banking sector, with its emphasis on inclusion and diversity via recruitment and selection practices, is aiming to address social inequalities. The insights gained from the studies highlight the importance of aligning HRM practice with SDGs specifically in advancing diversity and inclusion, thereby improving the societal goals through organizational strategies. These reflections stress the critical role of HRM in driving the SDGs.

On the other hand, a sizable proportion of the workforce is also managed by several of China’s well-known banks with fluctuations in percentages, the gender distribution in Chinese banks likewise exhibits a balanced representation as shown in Table 1. In line with the data from the Indian banks, the proportion of male officers is typically higher than that of female officers in the Chinese banking sector. However, the presented data does not include specific numbers regarding employees who are members of specific ethnic groups or subject to other levels of diversity or marginalization such as disability or impairments.

Different Chinese banks have different numbers of new workers, indicating that hiring is a concurring process. Accordingly, both, India and China are demonstrating efforts to promote gender diversity in the workforce, as seen by the differences in the proportion of men and women in various companies in earlier studies (Lee Cooke and Saini, 2012; Saeed et al., 2017). Although the number of employees from minority groups or with impairments is disclosed in India, China does not explicitly offer this information. This is because China’s banking sector operates within a centralised and state-controlled framework where the recruitment and selection policies are less influenced by organizations and more by the local government and alignment with the nation’s strategic interests (Taylor, 2005). For instance, China’s centralised system gives less priority to social inclusion and more towards skills as its recruitment practices align more closely with its national agenda for growth and reform (Hong and Froese, 2023). Despite the difference between the two countries' banks in their HRM priorities to meet SDGs, both nations do place a strong emphasis on continuous hiring and adjusting to meet the changing demands of their respective banking industries.

HRM practices (recruitment and selection) of the Indian and Chinese banks play a crucial role in advancing and promoting the SDG8 agenda by clearly aligning with principles of equality, inclusion, diversity and continuous hiring. This alignment and integration enabled the banking sector to contribute towards decent work and economic growth thereby placing sustainable development goals as an important part of strategic organizational priorities. It also enables workplace practices to support broader sustainability goals and equitable economic progress.

As indicated in Figure 1 and Table 1, most sustainability reports in Indian and Chinese banks have reported on achieving pay equity for reporting rewards and payment practices. This alignment integrates directly with both SDG 8: Decent Work and Economic Growth and SDG 10: Reduced Inequalities. When organizational practices ensure fair compensation policies across ethnicities, gender and diverse backgrounds, it promotes a culture of inclusivity and equity thereby advancing sustainable economic development and reducing social disparities.

Interestingly, data from secondary published business and sustainability reports reveal that across Indian banks, the pay parity percentages range from 88.45% to 98.8% (refer to Table 1.) signalling a commitment to gender pay equity. Once again, this showcases the Indian banking sector’s diverse landscape where rewards and payment practices are influenced by the market forces of supply and demand including its domestic regulatory frameworks and organizational strategies (Kaur and Sharma, 2019). An example of this includes private banks like ICICI or HDFC which are fuelled by competition and prefer to adopt a more flexible and pay-for-performance-driven approach as compared to public banks (Garg et al., 2018).

As a result, India’s banking industry designs its rewards and payment system to align with both, social inclusion and economic growth aiming for a balanced approach to SDGs. Similarly, it also shows that industries in India like, banking are guided by affirmative action to reduce income inequalities through inclusive reward structures catering to a diverse workforce (Deshpande, 2005). Therefore, in the context of SDGs, the reward practices adopted by Indian banks appear to emphasise a balanced approach that provides financial incentives to employees but also encourages economic growth with social inclusion (Goyal and Joshi, 2012).

On the other hand, based on our analysis of the reports, we did not find any information relating to pay parity among Chinese banks. This once again highlights Chinese banks’ regional and sectoral disparities in rewards potentially contributing to inequalities in rewards, compensation, and payments. Although, according to a recent report by Reuters (2023), the Bank of China (China’s fourth largest bank) lender by assets has launched a nationwide initiative to reduce salary gaps among its employees (Reuters, 2023). This may indicate that despite the institutional rigidity in China’s centralised system, Chinese banks are working towards fine-tuning their rewards and payment practices to contribute effectively to sustainable development.

HRM practices in particular rewards and compensation (through pay parity) of the Indian and Chinese banks serve as a direct stream for advancing SDGs (especially SDG 8 and SDG 10). This is achieved through a significant focus on equitable compensation structures. Therefore, organizations striving to achieve the principles of inclusivity and social development should considerably focus on strategically aligning the reward structures with organizational goals. Such integration helps drive sustainable progress towards the global goals of SDG 8 by fostering decent work and economic growth while simultaneously addressing SDG 10 by reducing inequalities.

Figure 1 demonstrates that a) the health and safety of women employees and b) provisions for maternity and paternity leave were the two reported indicators for capturing workplace health and safety HRM practices. This exemplifies that organizations could cater for the well-being of the employees by prioritizing policies such as equitable parental leave policies, thereby creating a supportive work environment conducive to economic growth and reducing gender-related inequalities in the work setting.

As shown in Table 1, when it comes to workplace health and safety (WH&S), Indian banks demonstrate their commitment to health and safety by offering a wide range of services, including mental health support, 100% training on WH&S, and cutting-edge tools like the “Visit” app (getvisitapp.com, 2023). This app uses an Artificial Intelligence (AI)-powered health assistant (or chatbot) to provide free healthcare consultations from doctors across different locations. On the other hand, Chinese banks were also found to be promoting several WH&S initiatives such as regular health examinations, mental health awareness, and support for women’s health, and a sizable portion of the workforce has received training in H&S procedures.

In both, India and China, banks are prioritising WH&S to contribute towards reducing inequalities faced by employees and ensuring that a standardised approach to employee well-being across diverse backgrounds can be provided. A report written by Dahl et al. (2020) from McKinsey also asserts that banks in Asia post-pandemic have moved quickly to safeguard their employees, transform their operations to suit remote and hybrid work forms and serve customers in new ways. Hence, both nations are placing a high priority on worker WH&S by implementing training programs and providing a range of healthcare options. While Indian banks use cutting-edge platforms like the “Visit” app and concentrate on a comprehensive approach to care, China places more emphasis on women’s health and mental health.

Hence, it can be demonstrated through the analysis given above that HRM practices around workplace health and safety provide the foundation for embedding and advancing SDFs within organizational settings. Ensuring the implementation of WH&S initiatives as can be seen through analysing reports of Indian and Chinese banks, can help to address SDG targets related to decent work and economic growth and reduced inequalities. These proactive practices would ensure that organizations respond to emerging challenges and reflect the adaptability of HRM practices in responding to issues that advance progress towards sustainable development objectives.

Initiatives like the Garima program, which aims to stop sexual harassment are one way through which Indian combat inequality. Resolutions and reported situations demonstrate openness and dedication. There is also provision for maternity and paternity leaves in Indian Banks. On the other hand, Chinese banks do not report any data in this regard. Through the implementation of policies and programs, Indian Banks are taking initiatives to combat workplace inequality (SDG 10). No data is disclosed for China’s Bank. Furthermore, diversity and inclusion initiatives within Indian banks include educational programs like Samya: educating employees through Casteless Inclusion Day, and initiatives like “Pause for Bias” and the Kotak Wonder Women (KWW) Meet (Axis Bank Report 2022; Kotak Mahindra Bank Annual Report, 2023). Moreover, Indian banks take an open and transparent approach in providing data on percentages of trained male and female employees in addition to high overall employee percentages. An emphasis on sustainability, human rights, and long training sessions demonstrates a dedication to staff personal and career development. Likewise, Chinese banks also report high percentages of all workers trained, emphasizing officials in poverty alleviation and environmental, social, and corporate governance (ESG) online training. In the context of Sustainable Development Goal 8 (Decent Work and Economic Growth), both Indian and Chinese banks' training and development practices aim to cultivate a skilled workforce that aligns with the country’s strategic economic goals.

Finally, Indian banks actively engage in environmental awareness initiatives such as online quizzes like Astitva, cleanliness campaigns, and dam cleaning programs. “Swachhata Pakhwada” and other initiatives show a strong dedication to cleanliness and sustainability (Swachbharatmission.gov.in, 2024). The “Joy of Giving Week” initiative by SBI Bank of India also emphasizes the importance of corporate social responsibility and charitable contributions (The Statesman, 2022). On the other hand, China’s bank also promotes sustainability with the help of initiatives like ESG online training for thousands of employees which indicates a concerted effort to integrate environmental, social, and governance considerations into business practices (SDG 13). Chinese Banks also demonstrate a commitment to tackling social concerns and promoting sustainable development by designating thousands of its workers as officials responsible for reducing poverty. In line with SDG 13, both China and India place a high priority on environmental sustainability through programs including ESG training and designated poverty alleviation officers. However, in comparison, India places more emphasis on a wider variety of such programs.

This study’s main objectives are to explore and identify the HRM practices adopted by the Indian and Chinese banks and their role in advancing the SDGs and examining how SDGs could be integrated into HRM as a core practice. The findings as explained above provide significant insights to understand the current HRM practices to advance sustainable development in the emerging markets. The results highlight various ways in which Indian and Chinese Banks align their HRM practices such as staffing, health and safety, rewards management and training with SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), and SDG 13 (Climate Action). As explained above, Indian banks tend to foster social inclusion when hiring and ensuring equitable compensation practices and environmental initiatives whereas Chines banks prioritize recruitment based on centralised governance. In the following section the study offers a pathway for integrating SDGs into HRM using institutional theoretical framework.

To incorporate SDGs into the core HRM practices, organizations need to focus on ensuring that sustainability practices are aligned with HRM practices of recruitment, rewards, workplace safety, and training practices. It comprises giving priority to diversity and equity initiatives to support SDG 10 (reduced inequalities), having fair compensation practices to support SDG 8 (decent work practices), and offering health and safety initiatives to support SDG 13 (climate action). Institutional theory could provide a viable theoretical framework to understand the influences of external pressures that shape HRM practices. For example, normative isomorphic pressures which include stakeholders and societal expectations can drive Indian banks to disclose their HRM initiative to align closely with SDGs. Coercive isomorphic pressures could also present certain challenges for Chinese banks where strict regulations often hinder the effective alignment and disclosure of SDGs. Similarly, mimetic isomorphic pressures could influence in terms of how banks can imitate successful practices to gain legitimacy. By understanding and adapting to these standards, organizations could demonstrate how HRM practices can serve as a medium for effectively integrating SDGS into organizational practices and strategies.

Considering the above findings and using institutional theory to understand the integration of HRM practices in advancing SDGs. We propose the following propositions and a graphical representation of the framework in Figure 2:

In the context of institutional theory, India’s unique institutional landscape shapes the practices of its banking sector, influencing recruitment and selection, remuneration and payments, health and safety, and training and development (Budhwar and Khatri, 2001), which in turn influences the bank’s ability to meet the Sustainability Goals. Indian public-law banks in this sector, governed by government regulations and operational policies, have a strong institutional influence (Chaudhary and Sharma, 2011; Sathye, 2003). Emphasizing diversity in recruitment is consistent with the institutional framework which promotes social equality. Salary structures that follow government-mandated guidelines reflect an institutionalized commitment to reducing income inequality. WH&S practices are influenced by the regulatory framework and engagement that meet the diverse needs of the workforce (Jaiswal and Dyaram, 2020). Training and development initiatives, led by Affirmative Action, help reduce skills and promote a more inclusive workforce. Private banks, on the other hand, operate in a more dynamic, market-oriented institutional environment (Chaluvadi et al., 2018). Their recruiting practices often focus on niche skills and talent that meet market demands. Compensation structures are flexible and performance-based, reflecting the dynamics of the competitive market. WH&S practices and training and development projects are influenced by the need to attract top talent and keep them competitive. The impact on Indian banks within an institutional theory framework highlights the dual impact of government regulations and market dynamics. Balancing these institutional pressures is critical for Indian banks to effectively advance sustainability goals and navigate a diverse socio-economic environment.

In China, the state-dominated institutional landscape has a significant impact on HRM practices in the banking sector, affecting its ability to effectively achieve the SDGs. State banks operate in an environment where government priorities shape recruitment practices to meet national economic goals. Rewards and payments, occupational health and safety practices, and training and development initiatives aim to support the central economic agenda (Ding et al., 2004). The institutionalized approach of China’s banking sector is leading to a concerted effort to recruit people to create a skilled workforce that will drive technological innovation and economic growth. Rewards are found to be in line with the government’s goals, which emphasize long-term stability and financial efficiency. Strict standards of health and safety practices apply to maintain a safe work environment. Training and development programs are strategically designed to support national and economic priorities. For Chinese banks, the implications of the institutional theoretical framework highlight the powerful influence of government supervision and coordination. The challenge is to balance this centralised management with the need to adapt to market dynamics and global sustainability standards. Achieving this balance is critical for Chinese banks to effectively contribute to the SDGs while operating within the institutional constraints of a centrally planned economy. For Chinese banks, the implications of the institutional theoretical framework highlight the powerful influence of government supervision and coordination. The challenge is to balance this centralised management with the need to adapt to market dynamics and global sustainability standards. Achieving this balance is critical for Chinese banks to effectively contribute to the SDGs while operating within the institutional constraints of a centrally planned economy.

The theoretical implications of the current study extend beyond the banking sector to provide useful insights into the integration of institutional theory highlighting coercive pressures (conformity due to external pressures), mimetic pressures (imitation of successful HRM practices) and normative pressures (adherence to professional standards and norms) with HRM practices to embed and progress the development of SDGs. This research attempts to uncover mechanisms through which Indian and Chinese banks respond to external influences in terms of reporting practices while trying to achieve sustainability objectives. In India where institutional norms stress diversity and equality, banks adapting to these practices enable the contribution to SDGs 8, 10 and 13. In contrast, in China, there is the dominance of state-owned initiatives that dictate the alignment of HRM strategies with economic priorities at the national level. This emphasizes the challenge of balancing global sustainability initiatives with a centralised management system. By unpacking the dynamics that influence the implementation of HRM practices and their integration with institutional theory, this study offers a framework for a comprehensive understanding of navigating the institutional environmental challenges that need to be factored in to achieve sustainable developmental goals.

The practical implications of the study offer actionable insights for banks and other organizations worldwide seeking to align their HRM practices with SDGs. As is explained above, for Indian banks, the emphasis was on leveraging the industry norms to lead HRM strategies that foster diversity, inclusion and well-being of employees thereby contributing to SDG 8, 10 and 13. By systematically aligning the HRM practices of recruitment, rewards, workplace health and safety, and training and development initiatives with organizational goals that advance SDG targets, Indian banks could position themselves as leaders in the reporting and implementation of sustainability practices. Moreover, Chinese banks could prioritize their strategic alignment of HRM practices with SDGs trying to balance out the governmental pressures in an attempt to foster a culture of social responsibility and stewardship. In addition, the study uncovers the significance of capacity-building initiatives that enhance the HR capabilities to navigate institutional challenges and thereby drive SDG outcomes. Organizations could empower the HR professional by investing in T&D initiatives in an attempt to further integrate sustainability practices into their organizational strategic goals. This would enable meaningful progress towards the achievement of SDGs.

Although the research presented here provides valuable insights into the alignment of HRM practices with the SDGs in the Chinese and Indian banking sectors, several limitations must be acknowledged. The study provides an overview and may not fully capture the nuances between individual banks, considering factors such as regional differences, organizational size and specific regulatory circumstances. The temporal dynamics of HRM practices have not been widely studied, and the study is based on publicly available information, which may limit the depth of analysis because detailed and up-to-date information on specific banking practices is not available.

Finally, this study used published reports to analyse the implementation of HRM practices. To improve the understanding of HRM practices in the banking sector about the SDGs, future research could start with in-depth case studies of certain banks in China and India. These case studies could provide a more detailed view of how individual organizations are addressing the challenges and opportunities of the SDGs. Longitudinal analyses can track the evolution of HRM practices over time, taking into account economic changes, regulatory changes, and the progress of the sustainability framework. Extending the analysis to other industries and global regions would allow comparisons across industries and cultures, illuminating the universality or uniqueness of observed practices. In addition, examining the impact of new technologies on HRM practices and assessing the impact of national and international policies would contribute to a comprehensive understanding of the complex relationship between HRM strategies and sustainability. With these tools, future research can further enrich the field and inform decision-makers and stakeholders in the field.

Future research could also explore the interplay between other facets and differential aspects of institutional theory (in mimetic, normative and coercive isomorphism), and HRM practices in the achievement of SDGs. Future research could examine the role of institutional adaptability in facilitating and hindering organizational efforts to align HRM practices with SDGs can inform recommendations for addressing and removing systematic barriers in advancing sustainable development objectives globally.

In conclusion, this study gives valuable insights into the pivotal role of HRM practices in advancing SDGs within the financial sectors of India and China. A comparative analysis of top banks highlights that both countries influence HRM practices to address SDGs 8, 10, and 13. However, differences exist in the scale and efficiency of implementation and reporting, emphasizing specific strengths and limitations for Chinese banks, while distinct strengths and weaknesses emerge for Indian banks. These variations underscore the complexities of aligning HRM strategies with SDGs, guided by the unique institutional contexts of each country. The proposed frameworks integrate core HRM functions with targeted SDGs, stressing HRM’s role in advancing sustainability within financial institutions. The research offers fundamental insights into reporting practices and emphasizes HRM’s strategic significance in contributing to global sustainability agendas. This study extends the understanding of the HRM-sustainability relationship in emerging markets like India and China, suggesting a pathway for improving corporate sustainability practices in these regions.