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This study aims to examine the extended effects of corporate (ir)responsibilities in supply chains. More specifically, the authors compare the impact of social and environmental initiatives and failures in the reputational capital of supply chain partners. The authors investigate how (and if) companies’ decisions to prioritize different sustainability dimensions in their supplier selection processes (i.e. sustainability trade-offs) affect consumers’ perception of corporate image, corporate credibility-expertise, attitude towards the firm and word-of-mouth.

The authors conducted three behavioural vignette-based experiments with 562 participants from the USA, relying on analysis of variance and t-tests analyses.

Results show that consumers perceive social irresponsibility cases as more severe than environmental ones in suppliers’ operations, penalizing buyers’ corporate image, corporate credibility-expertise and word-of-mouth. Corporate image, attitude towards the firm and word-of-mouth also have significant differences between social and environmental trade-offs. Statistically significant differences were also found between scenarios that portrayed the discovery of an irresponsible action and ones that reinforced the previous irresponsible practice in companies’ suppliers.

When types of irresponsibility practices are presented, the discovery of child labour and modern slavery conditions in suppliers damage how consumers perceive the company on corporate image and their attitude towards the organization and how they will spread word-of-mouth, reinforcing the importance of considering sustainability issues when making supplier selection decisions.

The study contributes to the understanding of how companies are perceived by their consumers regarding irresponsible practices and their impact on firms’ supplier selection decisions. Furthermore, data suggests that consumers might hierarchize sustainability dimensions, perceiving social irresponsibility cases as more severe than environmental irresponsibility ones.

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

This briefing is prepared by an independent writer who adds his/her own impartial comments and places the articles in context.

Take any financial or environmental scandal perpetrated by a major company – and unfortunately, there are quite a few to choose from – and people will tend to remember what went wrong and some of the fallout from the scandal, but it is unlikely they will know much about why something went wrong. For example, people will remember that Lehman Brothers went bust during the global financial crisis (GFC) in 2008 and can picture its employees leaving its offices with Iron Mountain boxes. They will also perhaps remember the Exxon Valdez oil spill in Alaska in 1989, and the devastation it caused the local wildlife. But does anyone remember exactly why these events occurred?

This paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Corporate social responsibility (CSR) has been consistently discussed by the retail companies as a key factor of their strategic plan. The widely divided literature on the link between CSR and financial performance has distracted the researchers to focus on the important variables of CSR, that is donations, community work and environmental performance. This chapter provides a reflection on why retail companies make these variables of CSR as the integral part of their core strategy and pinpoint the underlying benefits of adopting these variables. In the CSR disclosures, donations, community work and environmental performance are highly focused by the retail companies. Thus this chapter paves the way for the discussion for the highly significant variables of CSR in the retail industry. The chapter not only presents a framework on which future studies can be based but also improves the understanding of the concept that why donations, community work and environmental performance are important for the retail industry in the United Kingdom. The retail companies and the policy makers at the global or local level develop effective and relevant strategies by drawing on the multiple aspects of CSR. Despite having an extensive body of knowledge about CSR, there is however little known about the importance of community work, donations and environmental performance in relation to the UK retail industry.

Multinationals are increasingly pressured by stakeholders to commit to environmental sustainability that exceeds their own firm borders. As a result, multinationals have started to commit to environmental supply chain sustainability programs (ESCSPs). However, little is known about whether such commitment is rewarded or punished by financial markets, and if the stock price reaction differs depending on the type of firm that commits to such a program. This paper aims to discuss these issues.

The authors conduct an event study followed by two-equation Heckman modeling, using a sample of 66 multinationals that committed to the ESCSP of the Carbon Disclosure Project (CDP).

It was found that generally there is a marginally significant negative stock price reaction to announcement of participation in this ESCSP (i.e. −0.8 percent, p<0.10). However, the authors argue and show that firms in industries that have historically faced more pressure from consumers are less likely to announce their participation. If one corrects for this industry bias, then the negative stock price reaction is even more pronounced (i.e. −3.2 percent, p<0.05).

Using objective data, the study provides insights into the shareholder wealth effects of firms that commit to the ESCSP of the CDP. As such, the sample does not cover firms that set up their own ESCSPs.

The paper is valuable for practitioners and investors who are interested in finding out if participation in ESCSPs is financially attractive, and for (governmental) policy makers who may want to be assured that there is sufficient incentive for firms to pursue environmental supply chain sustainability.

This is the first paper that captures how financial markets react to announcements of ESCSPs.

The study investigates the interaction of sustainability dimensions in supply chains. Along with the analysis of sustainability trade-offs (i.e. prioritizing one dimension to the sacrifice of others), we develop and test the concept of cross-insurance mechanism (i.e. meeting of one sustainability goal possibly attenuating the effects of poor performance in another).

Through the analysis of a 20-variation vignette-based experiment, we evaluate the effects of these issues on the corporate credibility (expertise and trustworthiness) of four tiers of a typical food supply chain: pesticide producers, farmers, companies from the food industry and retail chains.

Results suggest that both sustainability trade-offs and cross-insurance mechanisms have different impacts across the chain. While pesticide producers (first tier) and retail chains (fourth tier) seem to respond better to a social trade-off, the social cross-insurance mechanism has shown to be particularly beneficial to companies from the food industry (third tier). Farmers (second tier), in turn, seem to be more sensitive to the economic cross-insurance mechanism.

Along with adding to the study of sustainability trade-offs in supply chain contexts, results suggest that the efficiency of the insurance mechanism is not conditional on the alignment among sustainability dimensions (i.e. social responsibility attenuating social irresponsibility). In this sense, empirical evidences support the development of the cross-insurance mechanism as an original concept.

Filling a gap in extant research regarding the measurement of an export country's environmental image and investigating its importance for consumers' evaluation of an environmentally differentiated imported product.

Online surveys carried out in Denmark (Study 1), Germany and France (Study 2; N˜500 from each country). In Study 1, we develop an environmental country image instrument and investigate its nomological validity vis-à-vis other country image constructs and Danish consumers' evaluation of organic milk from Germany. In Study 2, we validate the instrument with consumers from Germany and France, evaluating organic milk from Denmark.

Consumers differentiate between a country's environmental image and its general and production-related images. The country's environmental image is important to consumers' evaluation of an environmentally differentiated product from the country. Specifically, we find that a country's environmental image strongly influences its product-specific images and, through these, the consumer's evaluation of an organic food product from the country.

Consumers' use of a country's environmental image as a cue to the credibility of environmental claims gives competitive advantages to exporters from countries with a favorable environmental image, while exporters from countries with an unfavorable environmental image need measures to compensate. Companies and countries should monitor how the environmental image of their country evolves in important markets and be ready to act when facing damages to their country's environmental image.

This article is the first to propose a measure of environmental country image and to document that consumers use the environmental image of an exporting country to assess environmental claims on imported products.

The purpose of this paper is to present a granulated governance perspective to face sustainability risks and challenges that our planet is facing. The authors argue that sustainability challenges should be addressed simultaneously at the individual, organizational, sectorial, national and supranational level. Financial institutions have a systemic impact on the economy, and on the functioning of our societies. Therefore, a culture of profit maximization and unbridled risk-taking, notwithstanding the external costs and impacts, contaminates not only the financial system and the economy, but also individual norms of responsibility. In this line of reasoning, the global financial crisis revealed the destabilizing effects on the economy, society and corporations and forms a serious impediment for sustainable business. This is a huge challenge for sustainability business and corporate governance; however, it is an illusion to think that managers can prevent scandals and moral norm deterioration without support from other social players.

This paper offers a conceptual analysis on the past financial crisis (2008-2012). It questions the focus on sustainability at the corporate level, and suggests a more comprehensive method for governance. The authors argue in favour of sustainability implementation, combining different governance levels.

The double-dip financial crisis 2008-2012 showed the failure of an unsustainable global system. It becomes clear that corporate responsibility and corporate governance are limited in their contribution to sustainable business in a sustainable economy. Hence, it is important to have a more integrated approach to address sustainability risks, with a solution at individual, sectorial, national and supranational governance levels.

This contribution advances five different levels of governance to mitigate risks for sustainable business, arguing in favour of integrated governance for sustainability risks. However, an empirical validation of these ideas still needs to be developed. Future empirical research is needed to validate the five levels of governance. Future research is also needed to better grasp the mechanisms in support of governance.

Corporate responsibility and corporate governance are necessary but not sufficient conditions to address the sustainability risks one faces. All actors in the economy recognize that governance for sustainable business in a sustainable economy is a collaborative effort for which neither legislative nor institutional or behavioural norms are developed in an integrated way. They should also recognize that integrated governance is not only imperative for the common good, but also in the direct interest of shareholders and other stakeholders.

This paper contributes to the literature on corporate responsibility and corporate governance with the identification of specific roles for regulators, sector representatives and individuals, which are complementary to the role of the companies in creating the conditions for sustainable business in a sustainable economy.

Over the last decade, the Chilean economy has experienced rapid growth, allowing per capita GDP to rise from $10,700 to $19,887. Additionally, the capital markets size increased over 16%. Given this, it is expected that Chile will be considered a developed country by 2020, according to the Organization for Economic Co-operation and Development (OECD). Chile is in the initial stages of joining the OECD; a process that is expected to accelerate positive changes in the economy. However, in recent years, publicly traded Chilean firms began to face financial scandals causing the upheaval of the regulatory market structures and initiating environmental legislation. These scandals have consistently occurred across all economic sectors and typically have included companies with large market capitalizations and strong risk management procedures. Nevertheless, these mechanisms have proven unsuccessful due to misinformation or information manipulation. The changes to the Chilean economy can be considered as operational risk to its member firms. These risks typically result from inadequate or failed internal processes or people systems, and/or from external events. The radical changes in this transitional economy and the impact on the differing companies involved are good examples that should provide a warning for emerging market economies trying to implement risk management control systems. Unfortunately, agencies such as the Internal Revenue Service and the Securities and Exchange Commission (SEC) in the United States cannot be modeled in the traditional sense in countries similar to Chile. Different authors simplified operational risk management, but this framework is not feasible in emerging economies based solely on the criteria of identification, evaluation, monitoring, and management.

The purpose of this paper is to present an exploratory essay evaluating whether involuntary intellectual capital disclosure (ICD) is value relevant to stakeholders. The authors define involuntary disclosure as “what external stakeholders and stakeseekers disclose about a company”. This essay is timely because it lays the foundations for future ICD research that departs from traditional analyses of corporate reports, especially annual reports.

The paper provides a critical reflection on current and future developments in ICD research. The normative arguments rely on the experience and expertise along with examples from the ICD literature and contemporary business media to critique existing ICD research and practice and to offer new ways forward for future research.

In highlighting the limitations of the traditional ICD literature, the authors provide a foundation from which researchers should contemplate a powerful new force in ICD brought about by the rapid transformation in technologies and forces of mass communication. The authors introduce the concept of “involuntary disclosure”, and highlight several key issues that intellectual capital (IC) researchers should consider if they want their academic endeavours to contribute not only to practice, but to a wider environmental and social good.

Involuntary disclosures produced by stakeholders and stakeseekers introduce opportunities and threats to organisations, bringing new risks that impact share value and reputations. How well organisation manage these risks, and the impact inside and outside organisational boundaries, to provide economic, environmental and social value, should provide ample fuel for future transformational IC research.

The most value relevant disclosures are not what an organisation discloses or reports about itself, but rather what stakeholders and stakeseekers communicate. However, how reliable are involuntary disclosures and how can stakeholders and organisations verify IC disclosures coming from outside the organisation? If involuntary IC disclosures are value relevant, how might organisations seek to influence and manage them to serve their ends?

Whilst many studies consider labelling as means of aggregated communication of environmental product features, the presentation of detailed product information seems a promising alternative. However, the mechanisms through which detailed product information takes effect on consumers requires better understanding. The purpose of this paper is to empirically develop a framework that focuses on consumers’ perceived usefulness of, and trust in, detailed product information, whilst also considering the role of environmental self-identity. This understanding will help businesses to further stimulate eco-friendly consumption.

Structural equation modelling and conditional process analysis are utilised to test hypotheses based on a sample of 279 respondents to a German online survey.

Results show that the perceived usefulness of product information (PUPI) has a positive effect on purchase intention, and this effect is intensified by an individual’s environmental self-identity. Furthermore, for consumers with high environmental self-identity, the effect of PUPI on purchase intention is mediated in turn by trust in detailed product information and resistance to negative information.

This study contributes to the debate on the role of product information in ethical consumption by showing how detailed product information gives rise to favourable behavioural outcomes. When detailed information is perceived as being useful, it can affect purchase intention through greater trust and an increased resistance to negative information. Further, detailed product information appears beneficial for both, the mass market and specific segments with high environmental self-identity. Hence, this study empirically establishes the effects of detailed product information on consumer decision making, thus informing sustainability-related marketing theory and practice.