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In 2009, Newsweek published a report in which they ranked the 500 largest US companies and the 100 largest global companies based on its environmental performance measures (http://greenrankings2009.newsweek.com/). This ranking is referred to as Newsweek’s Green Ranking. Included in this ranking is information about water and air pollution, solid waste disposal, toxic wastes, carbon emissions, and enforcement actions. The question we are addressing in this study is how well it measures pollution performance? The question is relevant to environmental accounting/reporting since it is part of a dilemma yet to be answered: Aggregated environmental indices/scores are easy for average information users to percept, while specific information may not be preserved when it is aggregated into the overall score(s).

Specifically, we examine whether Newsweek’s Green Ranking is correlated with pollution measures based on Toxics Release Inventory (TRI) in order to determine how valid or reliable Newsweek’s Green Ranking is – in other words, how much Newsweek’s Green Ranking can explain the pollution by the toxic releases. We find that there is no significant correlation between Newsweek’s Green Ranking and the TRI measures except for the firms in the utilities industry. Concluding that on one measure, which we consider a very important one, there is no justification for the overall Green Ranking Score presented by Newsweek. However, in Newsweek’s three-part score the element that is termed the Environmental Impact Score captures pollution performance measured based on TRI. The contrast between the overall ranking and performance ranking indicates that a composite index that incorporates hard performance and soft measures can dilute the information carried by performance data.

The purpose of this paper is to study the relationships among environmental performance (EP), environmental disclosure (ED), and financial performance (FP) (three corporate constructs) using data from Newsweek’s green rankings.

Previous studies document mixed results about the relations among the three constructs. A firm’s overall management strategy may affect the three constructs simultaneously; therefore, the interrelationships among EP, ED, and FP were jointly examined. A simultaneous equations approach was used to test the hypothesis.

The three-stage least square (3SLS) estimation results show a negative relationship between EP and FP and a positive relationship between EP and ED, suggesting that financially successful firms are less likely good environmental performers but green firms are more likely to disclose their EP.

Since the sample firms examined in this study are US large-size companies, the results found in this paper may not apply to small- and/or medium-size firms or to companies in other countries.

Three corporate constructs are jointly correlated with each one. A firm’s overall strategic plan on environmental engagement is likely reflected in how it engages in each of the constructs that affect costs and benefits. Sustainable efforts, in short term, may put firms at risk. Companies may need to take a long-term perspective when cutting costs is curtailed.

The research contributes to the ED and EP literature by using a 3SLS simultaneous equation method and analyzing a more recent and comprehensive multi-industry data. By controlling industry effect, the research investigates the interrelationships among three corporate constructs and finds interesting results. An interpretation and discussion are provided.

The purpose of this paper is to explore the source of apparent abnormal returns accrued by “green” company stocks. Though one cannot completely rule out that market-to-book and size factors may already capture the information of Trucosts’ total damage measure, the authors attempt to attribute the effect to risk, a persistent desirable characteristic or a short-run attention effect.

The authors construct portfolios of stocks using the Trucost data for identifying more environmentally friendly companies. The authors then compare the risk-adjusted returns of the green portfolios to the non-green portfolios. A secondary analysis of the price impact of being listed on the Newsweek green company listed is used to determine attention effects.

The authors find that green stock returns outperform the most polluting stocks by 3.7 percent per year on a risk-adjusted basis. The evidence is most consistent with a significant but economically small attention effect coupled with a longer lasting and greater magnitude desirable characteristic driving green returns. The authors do not find evidence of a risk-contribution to the performance after controlling for well-known factors.

Fund managers may benefit from this research in selecting green stocks, and thereby enhancing investment performance, with desirable characteristics without fear of increasing risk.

One social implication is that investing in sustainable and green firms may not only be beneficial for the common good but also for the investor. Increased capital flows, and hence lower borrowing costs, for green firms may assist in creating a more ecologically sustainable economy.

To the authors’ knowledge this paper unique in attempting to determine if the green premium is a short-run inefficiency resolved by attention or a result of a desirable characteristic.

This paper aims to investigate the relationship between environmental performance and management and company valuation. With a specific focus on company valuation, this study shows how a firm’s environmental activities, including its environmental management practices, are perceived and valued by its stockholders.

Newsweek’s green ranking data between 2014 and 2016 were used to support this analysis. Environmental performances and environmental management practices of 345 Fortune 500 companies from various industries were included in the data set.

The analysis finds higher valuations for US companies that are more efficient in managing greenhouse gas emissions. In addition, it empirically shows that investors place a higher value on companies with the following environment-related management policies: initiatives that reward top management for achieving environmental goals and third-party auditing of environmental performance.

By incorporating corporate environmental management practices as an additional environmental performance criterion, this research fills a gap in the literature on the potential relationship between corporate environmental performance and company valuation.

The purpose of this paper is to investigate whether companies’ environmental and social supply chain activities are associated with their financial performance.

A sample from the top 500 US companies based on Newsweek's green ranking is used. Data from the Bloomberg environmental, social and governance (ESG) and COMPUSTAT financial database are used for an empirical analysis of the relationships.

Integrated sustainable supply chain management, jointly including social and environmental supply chain management, efforts is positively associated with corporate financial performance measured by return on assets and return on equity, and the positive effects can have a time lag of at least two years.

By adopting the ESG database, the paper only tests corporate sustainability supply chain management using a binary 0-1 valuation. Three-year data period is also a limitation for an extensive time study. A research implication is that win-win benefits may accrue, but additional nuances may exist such as indirect influences that need to be studied.

Two major implications of this study are that organizations may wish to implement both environmental and social supply chain management simultaneously to get the greatest benefit, and that managers need to be patient about reaping the rewards of these initiatives.

The paper contributes to the sustainability management literature by being the first to use publicly available data to investigate the financial benefits associated with individual and joint environmental and social supply chain management activities. The paper also uses a relatively large data set from US-based companies that have not been widely studied in the supply chain management literature.

This study aims to examine the impact of green operation (measured using the energy intensity of its operations) on the value of corporate firms in stock markets. The authors also examine the channel of such an impact and its implication on a firm's financing choices.

The authors conduct various univariate and multivariate regression analyses on a panel of all non-financial Indian firms listed on the National Stock Exchange from 2010 through 2018. The authors use the sensitivity of investments to the cash flows model to test the financial constraints hypothesis.

The authors’ analysis shows a positive relationship between energy efficiency (firms that consume a lesser amount of energy per unit of sale) and the value of firms in the stock market. The authors empirically attribute this greater valuation to the lesser volatility of stock returns, measured by the standard deviation of daily stock returns. Finally, the authors observe that investments in energy-efficient firms are less sensitive to their internal cash flows.

The results suggest that less green firms face greater constraints in accessing finance from external sources and, therefore, depend more on internal than external capital to finance their investments. Hence, managers of such firms can ease their financing pressures by making their operations greener.

In this study, the authors examine the implications of green operations on the financing choices of firms. This aspect of going green is important because managers will have enough incentives to invest in green technologies as that would increase their access to external finance and, hence, decrease their financial constraints.

Sustainability certifications can support green innovation in important consumer sectors such as food and beverage. This research interrogates how certified companies communicate sustainability claims online and whether these practices differ from non-certified counterparts. The purpose of the study is to understand if certification stands to alter online communication about sustainability.

A discourse analysis of the websites and social media accounts of three highly-rated Canadian B Corps and three matching non-certified companies inductively identified 5 types of sustainability claims: transparency, brand story, green materials/processes, community engagement and sourcing partnerships. A comparative analysis was used to determine if certification alters corporate sustainability communication practices of firms.

The findings indicate that sustainability certifications alter external online sustainability communication. Of the 457 sustainability claims coded in the sample, 67.6% are from certified firms. Attaining certification also alters the areas of communication focus, increasing communication about the socially oriented community engagement dimension, which is often underrepresented.

The research contributes to the understanding of sustainability communication among privately held small and medium-sized enterprises (SMEs), which are currently underrepresented in the literature. The unique sampling used in this study considers how communication is altered post-certification as a novel way to understand the impacts of sustainability certifications.

This chapter examines Unilever's transformation in sustainability and corporate social responsibility (CSR) over the past decade. It tracks the author's involvement with an internal team that studied Unilever's world “outside in” and “inside out” through the engagement of over 100 organizational leaders to awaken the company for change. The case reports how Unilever embraced a “vitality mission” to align its strategies and organization around sustainability and CSR and infuse social and environmental content into its corporate and product brands. Among the innovations described are certification of the sources of sustainable fish and tea, Dove's inner-beauty campaign, and several “bottom of the pyramid” efforts. Particular attention is given to the makeover of its high-growth Asian business. The transformation is examined as a “catalytic” approach to change and discussed with reference to theories of complex adaptive systems. This raises theoretical questions about the role of top-down versus more communal leadership, the importance of mission versus vision in guiding change, and the relevance of emotive and psycho-spiritual versus more programmatic interventions in the rearchitecture of an organization as it progresses on sustainability and CSR.

The purpose of this paper is to explore the relationship between a chief executive officer (CEO)’s personal engagement in broader societal causes (CEO civic engagement) and firm’s social and environmental performance.

A theoretical framework was developed based on upper echelons and stakeholder theories to argue that CEOs’ professional background characteristics can be closely related to firm-level social and environmental performance. Hierarchical OLS analysis was conducted using data from 178 large, publicly traded large US firms between 2010 and 2013.

Overall, the findings suggest that firms led by CEOs with active civic engagement are more likely to support various philanthropic efforts. Additionally, the findings suggest that firms led by civic-minded CEOs are more likely to support an active corporate environmental engagement by investing significant resources in various environmental causes. Contrary to the authors’ predictions, the level of CEO civic engagement was not a significant predictor of firm level community engagement activities.

The findings extend current scholarly work on executive determinants of corporate social performance by highlighting the important role of CEOs’ personal engagement beyond studying CEOs’ demographic characteristics. Specifically, the findings that the CEO-civic engagements lead to higher degrees of corporate philanthropy and environmental performance show that CEOs’ civic engagement can go beyond what is considered symbolic executive actions.

The findings suggest that firms that seek to foster social and environmental performance in a meaningful way should recruit and retain CEOs that have a personal commitment to and engagement in various social and environmental issues and causes.

By empirically examining the effect of CEO civic engagement on corporate philanthropy, community involvement and environmental performance, this paper seeks to contribute to the scholarly conversation on the effects of CEOs in shaping the firm’s social and environmental engagement and addressing external stakeholder concerns.