Search results

This study aims to evaluate the adequacy of climate risk disclosure by providing empirical evidence on whether corporate disclosure meets rising stakeholders’ demand for risk disclosure concerning climate change.

Drawing on a triangulated approach for collecting data from multiple sources in a longitudinal study, we perform a panel regression analysis on a sample of multinational firms between 2007 and 2021. Inspired by the Global Reporting Initiative (GRI) principles, our innovative and inclusive model of measuring firm-level climate risks underscores the urgent need to redefine materiality from a broader value creation (rather than only financial) perspective, including the impact on sustainable development.

The findings of this study provide evidence of limited corporate climate risk disclosure, indicating that organisations have yet to accept the reality of climate-related risks. An additional finding supports the existence of a nexus between higher corporate environmental disclosure and higher corporate resilience to material financial and environmental risks, rather than pervasive sustainability risk disclosure.

We argue that a mechanical process for climate-related risk disclosure can limit related disclosure variability, risk reporting priority selection, thereby broadening the short-term perspective on financial materiality assessment for disclosure.

This study extends recent literature on the adequacy of corporate risk disclosure, highlighting the importance of disclosing material sustainability risks from the perspectives of different stakeholder groups for long-term success. Corporate management should place climate-related risks at the centre of their disclosure strategies. We argue that reducing the systematic underestimation of climate-related risks and variations in their disclosure practices may require regulations that enhance corporate perceptions and responses to these risks.

This study emphasises the importance of reconceptualising materiality from a multidimensional value creation standpoint, encapsulating financial and sustainable development considerations. This novel model of assessing firm-level climate risk, based on the GRI principles, underscores the necessity of developing a more comprehensive approach to evaluating materiality.

Businesses are increasingly vulnerable and exposed to physical climate change risks, which can cascade through local, national and international supply chains. Currently, few methodologies can capture how physical risks impact businesses via the supply chains, yet outside the business literature, methodologies such as sustainability assessments can assess cascading impacts.

Adopting a scoping review framework by Arksey and O'Malley (2005) and the PRISMA extension for scoping reviews (PRISMA-ScR), this paper reviews 27 articles that assess climate risk in supply chains.

The literature on supply chain risks of climate change using quantitative techniques is limited. Our review confirms that no research adopts sustainability assessment methods to assess climate risk at a business-level.

Alongside the need to quantify physical risks to businesses is the growing awareness that climate change impacts traverse global supply chains. We review the state of the literature on methodological approaches and identify the opportunities for researchers to use sustainability assessment methods to assess climate risk in the supply chains of an individual business.

Financial institutions have a role in harmonising economic purposes with environmental and social purposes through transmission mechanisms whereby the institutions provide channels to promote socially and environmental desirable activities. This study explores the sustainability criteria disclosed at firm-level corporate social responsibility reports for the purpose of providing direction for financial institutions committed to enhancing the contribution to sustainability objectives.

The Delphi Method and the Decision-Making Trial and Evaluation Laboratory (DEMATEL) system have been employed to systematically analyse the opinions of 15 experts regarding the operation of the 7 Taiwanese financial institutions listed on the Dow Jones Sustainability Index in 2019 with respect to the capacity to affect sustainability objectives.

The findings reveal a high prominence level for corporate governance, law compliance, risk management and occupational safety and health, representing amongst the sustainability criteria considered. This suggests that financial institutions may benefit from focussing resources on these areas, starting with corporate governance, when considering means for enhancing the sustainability performance.

The study is limited by the small number of financial institutions available in Taiwan which suggests that further research could be directed towards a larger sample of financial institutions, say by international comparison, expanding the range of industries studied or the inclusion for additional sustainability indicators.

Overall, the study has shed light on Taiwan's financial institutions' capacity to contribute to sustainable practices which is an area that has not been extensively investigated. This study may have useful implications for financial institutions in Taiwan.

The authors also recognise other factors that are likely to contribute to social impacts. These include human capacity building and development, information security, green procurement, green building and climate-related financial products.

This study fills the gap by providing useful insights for a better understanding of sustainable development in financial institutions by promoting sustainability practice in general. The authors' analysis will assist decision-makers in identifying and prioritising the driving factors and thus adopting suitable strategies to strengthen sustainability performance.

The main objective of this chapter is to figure out various challenges emerging, or transition economies face in fostering sustainable finance. In this regard, extensive review of the extant and relevant literature is conducted with specification of time range, online database, and keywords. The findings suggest the various financing barriers experienced by emerging and transition economies in implementing the sustainable development goals (SDGs). Furthermore, this chapter triggers further debate on green financing initiatives that can help in dealing with the challenges of sustainable finance. It is found that green financing initiatives offer significant solutions in emerging and transition economies. In addition, this chapter provides policy implications to academia, practitioners, financial institutions, and government agencies to promote sustainable finance.

Drawing insights from institutional theory, this paper aims to examine whether and to what extent banks have reconfigured their management control systems (MCSs) in response to growing institutional pressures towards sustainability, understood as environmental, social and governance (ESG) issues.

The authors conducted an exploratory study at the three largest Italian banking groups to shed light on changes made in MCSs to account for ESG issues. The analysis is based on 12 semi-structured interviews with managers from the sustainability and controls areas, as well as from other relevant operational areas particularly concerned with the integration process of ESG issues. Additionally, secondary data sources were used. The Malmi and Brown (2008) MCS framework, consisting of a package of five types of formal and informal control mechanisms, was used to structure and analyse the empirical data.

The examined banks widely implemented numerous changes to their MCSs as a response to the heightened sustainability pressures from regulatory bodies and stakeholders. In particular, with the exception of action planning, the results show an extensive integration of ESG issues into the five control mechanisms of Malmi and Brown’s framework, namely, long-term planning, cybernetic, reward/compensation, administrative and cultural controls.

By identifying the approaches banks followed in reconfiguring traditional MCSs, this research sheds light on how adequate MCSs can promote banks’ “sustainable behaviours”. The results can, thus, contribute to defining best practices on how MCSs can be redesigned to support the integration of ESG issues into the banks’ way of doing business.

Overall, the findings support the theoretical assertion that institutional pressures influence the design of banks’ MCSs, and that both formal and informal controls are necessary to ensure a real engagement towards sustainability. More specifically, this study reveals that MCSs, by encompassing both formal and informal controls, are central to enabling banks to appropriately understand, plan and control the transition towards business models fully oriented to the integration of ESG issues. Thereby, this allows banks to effectively respond to the increased stakeholder demands around ESG concerns.

In recent years, European banks have been required to integrate environmental and social objectives into their business practices. At the same time, they have become increasingly exposed to environmental, social and governance (ESG) controversies. This paper empirically examines the relationship between the board characteristics of banks (i.e. size, gender diversity, meeting frequency, sustainability compensation incentives and the presence of a sustainability committee) and exposure to ESG-related controversies.

The empirical analysis focuses on a sample of 61 European banks between 2012 and 2021. Employing generalized method of moments (GMM) estimation, the authors examine the relationship between board characteristics and ESG controversies.

The results of the study indicate that banks featuring certain board characteristics (i.e. larger and more gender-diverse boards, facing sustainability compensation provisions and having sustainability committees) experience lesser exposure to ESG controversies. Additionally, the authors ascertain that prior instances of ESG controversies play a role in influencing current levels of such controversies. This result highlights the relevance of a bank's historical trajectory.

The authors' sample contains banks based in the European Union (EU). Future research should broaden the analysis to encompass banks operating in other advanced countries, as well as in emerging countries. This expansion would offer more insights into the relationship between board characteristics and ESG controversies under different regulatory frameworks.

The authors' findings provide relevant implications for several stakeholders, including shareholders, regulators and supervisors. Certain board characteristics should be taken into consideration to limit exposure to ESG controversies.

To the best of the authors' knowledge, this paper represents the first attempt to provide evidence of the link between strong corporate governance standards and reduced exposure to ESG controversies.

This study aims to investigate disclosure of asbestos-related liabilities in corporate accounts and counter-accounts to examine whether and how accounting contributes to corporate accountability for asbestos-contaminated products.

This study uses the Goffmanesque perspective on impression management to examine instances of concealed asbestos-related liabilities in corporate accounts vis-à-vis the revealing of such liabilities in counter-accounts.

The findings show counter-accounts provide significant information on liabilities originating from the exposure of employees and consumers to asbestos. By contrast, the malleability of accounting tools enables companies to eschew accounting disclosures. While the frontstage positive performance of companies served an impression management role, their backstage concealing actions enabled companies to cover up asbestos-related liabilities. These companies used three categories of mechanisms to avoid disclosure of asbestos-related liabilities: concealing via a “cloak of competence”, impression management via epistemic work and a silent strategy of concealment frontstage with strategic reorganisation backstage.

This study has policy relevance as regulators need to consider the limits of corporate disclosures as an accountability tool. The findings may also initiate academic and practitioner conversations about accounting standards for long-term liabilities.

This study highlights the strategies companies use both frontstage and backstage to avoid disclosing asbestos-related liabilities. Through analysis of accounts and counter-accounts, this study identifies the limits of accounting as an accountability tool regarding asbestos-induced diseases and deaths.

Across the USA, local municipalities and providers struggle to reliably supply water and electricity when faced with severe weather events induced by climate change. Previous research suggests those at higher risk for experiencing the detrimental effects of climate change have higher climate-related concerns. Additionally, research demonstrates variation in trust in institutions and perceptions of environmental justice along racial lines, which can influence concern for access to resources. Informed by this research, the authors ask two questions: how do Oklahomans’ trust in institutions, environmental justice perceptions and global climate change risk perceptions differ based on race, and how do these factors influence concern for water and electrical infrastructure? The purpose of this study is to better understand Oklahomans’ trust in information from institutions, environmental justice perceptions, global climate change risk perceptions and concern for water and electrical infrastructure.

This study uses a series of nested regression models to analyze the survey responses of 2,687 Oklahoman adults. The data were pulled from Wave 3 of the Oklahoma Meso-scale Integrated Socio-geographic Network survey, which is part of the National Science Foundation EPSCoR S3OK project.

The findings demonstrate the complex interplay of riskscapes – or risk landscapes – that encompass institutional trust, perceptions of environmental justice, climate change and infrastructure in Oklahoma. The authors find evidence that education and income are better predictors of institutional trust and environmental justice than race among our respondents. Political ideology emerges as a significant predictor across all hypotheses.

This study contributes to the understanding of complex dynamics involving race, perceptions of environmental justice, trust in information from institutions, risk perceptions of climate change and concerns for water and electrical infrastructure in Oklahoma.

Debates regarding climate change risk perception (CCRP), particularly its scale and impact on social and environmental sustainability, have continued for decades. CCRP is experiencing a renaissance with an increased focus on environmentally relevant behaviors to mitigate the effects of climate change. However, CCRP lacks investigation from the employee perspective. Supported by the social exchange and value–belief–norm theories, this study aims to address the impact of employees’ CCRP on their proenvironmental behavior (PEB) via the moderating roles of environmental values and psychological contract breach.

The nonprobability convenience sampling technique was used to collect survey data from a sample of 299 employees across 138 manufacturing firms in Pakistan.

The results show that employees’ CCRP positively impacts their PEB and that this relationship is moderated by their environmental values and psychological contract breach. Specifically, environmental values strengthen the CCRP–PEB relationship, while psychological contract breach weakens it.

The findings of the study emphasize useful guidance for managers and practitioners as a future avenue to restructure the climate change framework by emphasizing the conditions (i.e. environmental values and psychological contract breach). In doing so, the study is beneficial for managers and practitioners in helping to increase employees’ PEB through the development of climate change action plans.

To the best of the authors’ knowledge, this study is one of the first investigations into CCRP–employees’ PEB nexus in the developing country context. The study incorporates social exchange and value–belief–norm theory, which serve as the CCRP’s theoretical underpinnings. The findings advance the new knowledge about a firm’s social responsibility to achieve the sustainable development goals outlined in the UN’s 2030 Agenda.

This paper aims to unravel the relationship between market-driven impacts of climate change and firms’ deployment of renewable energy (RE) innovation. The purpose is to understand how market-related forces, influenced by uncertainty, shape firms’ behaviour in response to climate change challenges.

Drawing on the behavioural theory of the firm (BTOF), the paper develops a conceptual model to decode the relationship between each category of market-driven impacts and the resulting RE innovation within firms. The model takes into account the role of uncertainty and differentiates between multinational enterprises (MNEs) and domestic firms.

The analysis reveals five key sources of market-driven impacts: investor sentiment, media coverage, competitors’ adoption of ISO 14001, customer satisfaction and shareholder activism. These forces influence the adoption of RE innovation differently across firms, depending on the level of uncertainty and the discrepancy between environmental performance and aspiration level.

This paper contributes to the literature in four ways. Firstly, it emphasises the importance of uncertainty associated with market-driven impacts, which stimulates different responses from firms. Secondly, it fills a research gap by focusing on the proactivity of firms in adopting RE innovation, rather than just operational strategies to curb emissions. Thirdly, the paper extends the BTOF by incorporating the concept of uncertainty in explaining firm behaviour. Finally, it provides insights into the green strategies of MNEs in the face of climate change, offering a comprehensive model that differentiates MNEs from domestic firms.