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1 – 10 of over 2000
Article
Publication date: 27 September 2022

Deepali Kalia and Divya Aggarwal

This paper aims to investigate the effect of total and each individual component of environmental, social and governance score (ESG) on financial performance (FP) of…

Abstract

Purpose

This paper aims to investigate the effect of total and each individual component of environmental, social and governance score (ESG) on financial performance (FP) of healthcare companies.

Design/methodology/approach

Data for 468 health-care firms for the business year 2020 is sourced from Thomson Reuters to obtain ESG data. Correlation and multivariate regression analysis are done to investigate the relation between ESG activities and firm performance. The analysis has been done on overall data and subsample data to examine the relation across developing vs developed markets.

Findings

The results of the study suggest that relation between ESG score and FP cannot be generalized. The results show that performing ESG activities positively impact firm performance of healthcare companies in developed economies; however, this relationship would be negative or insignificant in the case of developing economies.

Practical implications

The results of this study have implications for both practitioners and policymakers. The authors suggest the specific setups in which the relationship between ESG activities and firm performance will be negative or insignificant. These results are beneficial to policymakers who seek to increase the active participation of firms in ESG activities.

Originality/value

To the best of the authors’ knowledge, this study is the first to explore the relationship of ESG score on FP through the lens of country-level development variables for health-care sector companies.

Details

Journal of Global Responsibility, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2041-2568

Keywords

Open Access
Article
Publication date: 25 August 2022

Anastasia Giakoumelou, Antonio Salvi, Giorgio Stefano Bertinetti and Anna Paola Micheli

The authors compare two market collapse incidents, focusing on their role as turning points for ESG considerations among investors that do not fall under the SRI class…

Abstract

Purpose

The authors compare two market collapse incidents, focusing on their role as turning points for ESG considerations among investors that do not fall under the SRI class. The authors draw from the signaling theory to posit that ESG performance acts as a buffer to retain institutional shareholders under stress conditions.

Design/methodology/approach

The authors collect extensive data on institutional shareholdings and corporate performance during the pandemic and the 2008 financial crisis to examine the potential of ESG to act as a downward risk hedging mechanism. The authors test whether superior ESG scores function as insurance and resilience signals that lock investors in through times of high probability of divestments.

Findings

Findings indicate that ESG weighs in investment decisions during economic downturn and poor returns. The nature of this positive relationship is not static but dynamic contingent on overall risk materiality considerations.

Research limitations/implications

The authors update regulators, firms, investors and academics on ESG, risk and crisis management. The shifting materiality and the altering impact of ESG practices is our core implication, as well as limitation, in terms of metrics, temporal evolution and interaction with institutional factors, along with portfolio alpha and safe haven potential in ESG asset classes.

Originality/value

The authors extend current literature focusing on portfolio returns and firm valuations to highlight the role of ESG in shareholder retention during poor return periods. The authors further add to existing studies by examining the shifting materiality of ESG pillars during different crisis settings.

Details

Management Decision, vol. 60 no. 10
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 22 August 2022

Siew-Peng Lee and Mansor Isa

This study aims to examine the impact of environmental, social and governance (ESG) practices on the financial performance of Malaysian Shariah-compliant companies over…

Abstract

Purpose

This study aims to examine the impact of environmental, social and governance (ESG) practices on the financial performance of Malaysian Shariah-compliant companies over the period 2010–2017.

Design/methodology/approach

Panel regression models are used for this study to test the effect of ESG practices on the performance and the interaction variables to examine the impact of double ESGShariah screening on firms’ performance.

Findings

This study finds a positive relationship between ESG practices and financial performance, suggesting that ESG practices can enhance firm value. Additionally, the authors also find evidence that double ESGShariah screening can enhance the ESG relationship with performance. These results are consistent and robust to three proxies for financial performance and different estimation techniques.

Practical implications

The positive relationship between ESG practices and performance implies that firms should improve their ESG commitment as this is consistent with enhancing performance.

Originality/value

This study presents evidence concerning the impact of ESG practices on the financial performance of Shariah companies, thereby paving the way for further studies in sustainability investments in Shariah companies.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 7 September 2022

Niccolò Nirino, Felice Petruzzella, Gazi Mahabubul Alam and Francesco Campobasso

The aim of this study is to analyse the relationship between firms' sustainable practices and corporate financial performance during the COVID-19 pandemic. Specifically…

Abstract

Purpose

The aim of this study is to analyse the relationship between firms' sustainable practices and corporate financial performance during the COVID-19 pandemic. Specifically, this study aims to analyse the effect of sustainable practices on firms' stock returns during and after the first COVID-19 pandemic emergency.

Design/methodology/approach

A quantitative study was conducted to determine the impact of sustainable practices on firms' stock returns, using a sample of 1,418 European listed firms. In particular, we tested the effect of environmental (E) and social (S) scores, providing a multi-sectoral analysis in order to consider sector specificities.

Findings

The empirical outcomes indicate the existence of a negative (weak) or null relationship between sustainable practices and stock returns, failing to provide evidence that these practices are able to protect shareholders value during times of crisis.

Practical implications

The results obtained made it possible to highlight significant implications for investors and practitioners. They may have particular attention in evaluating firm's sustainable practices trying to understand more precisely the value that such practices can have for the company and its shareholders.

Originality/value

This article is part of the stream of studies that analysed the impact of sustainable practices on stock returns during a period of crisis in order to contribute to filling the gap due to the lack of consensus and the mixed results in the literature.

Details

Management Decision, vol. 60 no. 10
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 29 August 2022

Fabio La Rosa and Francesca Bernini

This paper aims to investigate the effect of environmental, social and governance (ESG) controversies on the cost of equity (COE) capital, exploring the moderating role of…

Abstract

Purpose

This paper aims to investigate the effect of environmental, social and governance (ESG) controversies on the cost of equity (COE) capital, exploring the moderating role of both positive ESG performance and market securities regulation.

Design/methodology/approach

This paper adopts a sample of 2,599 time observations related to European listed companies for which the authors examine a set of 30 negative ESG scores across the three pillars in terms of controversies, compliance and other negative issues. This study uses the average of seven implied COE estimates.

Findings

The results show that negative ESG performance, particularly environmental controversies, increases the COE, although this impact is mitigated when associated with company efforts to improve environmental performance. Besides, environmental controversies are likely to increase the COE in countries where the market regulation is stronger, as a consequence of higher investors’ expectations towards the scrutiny role of more efficient markets against companies’ controversies.

Practical implications

Companies should take care seriously of environmental issues such as biodiversity, product impact and resource impact, because investors do react accordingly. As despite no direct effects of positive ESG performance are observed in terms of COE reduction, the mitigating role on the ESG controversies–COE relationship makes ESG practices still significant for European investors.

Social implications

The effects of ESG performance on company financial performance should be investigated under the assumption that bad events weight more than positive ESG performance.

Originality/value

Because no prior studies have specifically assessed the effect of the European listed companies’ ESG controversies on their COE, this paper delivers insights into the relationship between positive and negative ESG performance and their effects on capital market financing.

Details

International Journal of Accounting & Information Management, vol. 30 no. 5
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 14 July 2022

Renu Jonwall, Seema Gupta and Shuchi Pahuja

Socially responsible investment (SRI) is a niche and upcoming investment strategy in India. Very few researches have been conducted on SRI in the Indian context. This…

Abstract

Purpose

Socially responsible investment (SRI) is a niche and upcoming investment strategy in India. Very few researches have been conducted on SRI in the Indian context. This study identifies the SRI awareness level, attitude towards the importance of environmental, social, and governance (ESG) issues, willingness to invest in SRI avenues and obstacles in SRI investment decision-making by Indian retail investors. The second objective was among the awareness, attitude, willingness, obstacle, and demographic constructs to identify the most significant variables that impact an individual investor's SRI decision in India. .

Design/methodology/approach

Data for the study have been collected through a self-structured questionnaire. Descriptive statistics are used to identify the importance of variables for individual investors. This paper used the theory of planned behavior (TPB) to understand the factors impacting individual investors' SRI behavior. Binary logistics regression analysis is used to recognize the variables that affect an individual investor's SRI decision.

Findings

The descriptive statistics indicate a low level of SRI awareness; the majority of the investors agreed that ESG issues are significant in investing and showed a willingness to invest in SRI avenues. However, the investors were not willing to accept lower returns from SRI. The majority of investors found, lower returns on SRIs, no tax benefit, lack of information about SRIs, and low liquidity as important obstacles in SRI investing. Binary logistics regression results indicated that awareness about SR/ESG indices, awareness about SR/ESG funds, and willingness to invest in SRI avenues significantly impact investors' SRI decisions but demographic variables have no significant impact on SRI decision-making.

Practical implications

This study has implications for the ethical/SR mutual funds managers, policymakers, government, and international asset management companies. The study finds an urgent need for increasing awareness about SRI among individual investors in India. The study suggests that the issuers must provide adequate information about SRI avenues and probable risk and returns involved in these, while the regulators must make efforts to educate investors in India.

Originality/value

The context of the present study is original because hardly any of the earlier studies conducted in India have tried to find out the individual investors' SRI awareness level, investors' willingness towards SRI, investors' attitude towards ESG issues, and obstacles faced by investors in socially responsible investing.

Article
Publication date: 10 August 2022

Ruihui Pu, Thitinan Chankoson, Rebecca Kechen Dong and Lingxi Song

This study brings knowledge economy and sharing to advance environmental, social and governance (ESG). Nevertheless, knowledge economy is a broad research field and…

Abstract

Purpose

This study brings knowledge economy and sharing to advance environmental, social and governance (ESG). Nevertheless, knowledge economy is a broad research field and dynamic phenomenon. To fill this lacuna, the purpose of this study is to build a link between the literature field of knowledge economy and sharing to advance each ESG limitation. To achieve this aim, the authors have (1) presented the prevailing state of research on the literature field of knowledge economy and sharing and (2) provided future research avenues for understanding the ESG.

Design/methodology/approach

Therefore, this study has conducted a bibliometrics-based visualization analysis of literature data of 169 publications in knowledge economy field from 2010 to 2020. The authors classify findings into five clusters mapping the evolution of knowledge economy.

Findings

The analytical findings indicate the linkages between these clusters with ESG, as well as the application of knowledge economy to advance ESG limitations. This study offers future research implications for knowledge management scholars and managerial suggestions to ESG practitioners.

Originality/value

ESG is a newly emerging investment concept and corporate evaluation standard aiming at exploring a sustainable development path and striking a balance between commercial value and corporate social responsibility. But the status quo indicates identical ESG limitations due to the board of directors’ limited knowledge capacity, inconsistent and ununified ESG measurement and a lack of ESG information. In parallel, knowledge economy has increasingly created a huge higher rate of return and benefits towards this disruptive society. This study brings knowledge economy and sharing to advance ESG. Nevertheless, knowledge economy is a broad research field and dynamic phenomenon.

Details

Library Hi Tech, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-8831

Keywords

Article
Publication date: 12 August 2022

Amina Buallay and Meera Al Marri

This study investigates the relationship between the level of sustainability disclosure and telecommunication and information technology (IT) sectors' performance…

Abstract

Purpose

This study investigates the relationship between the level of sustainability disclosure and telecommunication and information technology (IT) sectors' performance (operational, financial and market).

Design/methodology/approach

Using data culled from 4,458 observations from 60 different countries for 10 years (2008–2017), an independent variable derived from environmental, social and governance (ESG) score are regressed against dependent manufacture performance indicator variables [return on assets (ROA), return on equity (ROE) and Tobin's Q (TQ)]. Two types of control variables complete the regression analysis in this study: firm-specific and macroeconomic.

Findings

The findings elicited from the empirical results demonstrate that there is a significant negative relationship between ESG and market performance (TQ). However, there is no significant effect of ESG on both operational (ROA) and financial performance (ROE). Moreover, the findings elicited from the partial least square structural equation modeling the relationship between ESG and ROA is stronger in emerging than in developed economies.

Practical implications

The authors' opinion for policy makers is that it is essential to promote and implement the appropriate legislative framework for sustainability reporting, which should enhance both the sustainability practices as well the profitability of IT firms.

Originality/value

The model in this study presents a valuable analytical framework for exploring sustainability disclosure as a driver of performance in telecommunication and IT sectors' economies. In addition, this study highlights telecommunication and IT sectors' management lacunae manifesting in terms of the weak nexus between each component of ESG and IT sectors' performance.

Details

International Journal of Emergency Services, vol. 11 no. 3
Type: Research Article
ISSN: 2047-0894

Keywords

Article
Publication date: 29 July 2022

Renu Jonwall, Seema Gupta and Shuchi Pahuja

India is an emerging economy and one of the preferred investment destinations for environmental, social and governance (ESG) fund issuers. Institutional investors invest…

Abstract

Purpose

India is an emerging economy and one of the preferred investment destinations for environmental, social and governance (ESG) fund issuers. Institutional investors invest retail investors’ money, and hence, it becomes imperative for ESG fund managers to understand the social investment preferences of retail investors. This study aims to compare the Indian socially responsible (SR) investors and conventional investors in terms of their socially responsible investment (SRI) awareness level, opinions about broad and specific ESG issues, investment behavior and demographics. In addition, this paper makes an attempt to have a deeper insight into Indian investors’ behavior toward SRI by segmenting the Indian retail investors based on their SRI awareness level, attitude toward ESG issues and intention to accept lower financial returns, and choices made by them as consumers.

Design/methodology/approach

After collecting the data through the survey method an independent t-test is used to compare SR investors with conventional investors. Chi-square has been used to analyze the data related to demographics, and cluster analysis is used to identify segments among Indian retail investors.

Findings

The results indicated that Indian SR investors’ SRI awareness level is more, they are more concerned about broad and specific ESG issues, they are more into faith-based investing, and are responsible consumers vis-à-vis conventional investors. As per demographic, SR investors are in the middle age group of 30–40 years, male, hold a postgraduate degree and have an annual income of 10–20 lakhs in comparison to conventional investors. The results of cluster analysis indicated that Indian retail investors can be classified into three groups based on their SRI awareness, intention to sacrifice financial return, attitude toward ESG issues and choices made by them as consumers.

Research limitations/implications

Results have implications for national and international fund managers, policymakers, regulators and society. These results will help mutual fund companies to provide curated SR mutual funds as per the behavior and choice of retail investors and penetrate the Indian investment market more deeply.

Originality/value

This research study contributes to the literature on SRI by identifying the differentiating characteristics of Indian SR and conventional investors and segmenting Indian retail investors on the basis of their SRI awareness, the importance of ESG issues and choices made by them as investors and consumers.

Details

Social Responsibility Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1747-1117

Keywords

Open Access
Article
Publication date: 11 August 2022

Bejtush Ademi and Nora Johanne Klungseth

The purpose of this paper is to investigate the relationship between a company’s environmental, social and governance (ESG) performance and its financial performance. This…

Abstract

Purpose

The purpose of this paper is to investigate the relationship between a company’s environmental, social and governance (ESG) performance and its financial performance. This paper also investigates the relationship between ESG performance and a company’s market valuation. This paper provides convincing empirical evidence that delivering superior ESG performance pays off financially.

Design/methodology/approach

The financial data and ESG scores of 150 publicly traded companies listed in the Standard and Poor’s 500 index for 2017–2020, comprising 5,750 observations, were collected. STATA was used to run a fixed-effect regression and a weighted least squares model to analyze the panel data.

Findings

The results of the empirical analysis suggest that companies with superior ESG performance perform better financially and are valued higher in the market compared to their industry peers. The ESG rating score impacts both return-on-capital-employed as a proxy for financial performance and Tobin’s Q as a proxy for the market valuation of a company.

Originality/value

This study contributes to the existing research on ESG performance and financial performance relationship by providing empirical evidence to resolve confusion in the existing literature caused by contradictory evidence. Taking advantage of worldwide crisis caused by the COVID-19 pandemic, this study shows that a positive relationship between ESG performance and a company’s market valuation holds even during times of unexpected crises. Further, this study contributes to business practitioners’ knowledge by showing that ESG aspects constitute highly relevant non-financial information that impact the market’s perception of a company and that investing in sustainability positively impacts a company’s bottom line.

Details

Journal of Global Responsibility, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2041-2568

Keywords

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