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Book part
Publication date: 9 June 2020

Anna Melinda and Ratna Wardhani

With the increasing understanding of stakeholders on sustainability aspects for the business, companies are nowadays paying more attention to environmental and social issues. This…

Abstract

With the increasing understanding of stakeholders on sustainability aspects for the business, companies are nowadays paying more attention to environmental and social issues. This study aims to examine the relationship between Environmental, Social, Governance (ESG) Index and firms’ value. Moreover, this study also examines how the controversy score influences the company’s value. The authors employ a dataset of 1.356 companies from 22 countries in Asia which representing the Asian market from 2014 to 2018. This study shows that ESG index score and controversy score are statistically significant, affecting the firms’ value, measured by Tobin’s Q. From the individual tests, the findings of this study indicate that ESG-environmental, ESG-social, and ESG-governance, individually affect the firms’ value. This study suggests that providing disclosure on ESG aspects is essential, not only to increase company value but also to show the company resilience and sustainability. On the other hand, ESG controversy score surprisingly indicates a positive relationship with the company value. The result implies that controversies provide a positive signal to the investor because controversies could provide a signal to the public of companies’ willingness to have transparency and accountability.

Details

Advanced Issues in the Economics of Emerging Markets
Type: Book
ISBN: 978-1-78973-578-9

Keywords

Book part
Publication date: 27 September 2021

Amalesh Sharma, Sourav Bikash Borah, Anirban Adhikary and Tanjum Haque

The extant literature provides much-needed support to understand marketing accountability and how marketing actions are related to financial performance (FP). However, we have…

Abstract

The extant literature provides much-needed support to understand marketing accountability and how marketing actions are related to financial performance (FP). However, we have limited understanding of the relationships between marketing actions and firms' social performance (SP) and environmental performance (EP). Understanding these links is critical to enhancing sustainable FP, SP, and EP. Moreover, the literature provides limited understanding of the measures by which SP and EP may be operationalized, or the data necessary to reach a conclusion. This study bridges these gaps by extensively reviewing the extant literature to offer a set of measures and data sources to operationalize SP and EP, and empirically show their relationships with marketing actions. We find that greenhouse gas (GHG) emission, environmental disclosure score, waste reduction, energy consumption, and recycling are prominent measures of EP, and that social disclosure score, philanthropy or community spending, and diversity of gender and race are prominent measures of SP. The KLD, ASSET4, and Bloomberg are prominent sources of data that can be used to operationalize SP, to which CDP may be added for EP. We also show that marketing actions positively affect EP and SP. This study contributes to the extant literature on SP and EP by identifying measures and data sources and linking marketing actions to both performance types. It contributes to policy development by identifying the importance of EP and SP and how marketing actions can help achieve such performance.

Book part
Publication date: 28 October 2021

Nuraddeen Abubakar Nuhu, Kevin Baird and Sophia Su

This study examines the impact of environmental activity management (EAM) on triple bottom line (TBL) performance and the role that sustainability strategies play in mediating…

Abstract

This study examines the impact of environmental activity management (EAM) on triple bottom line (TBL) performance and the role that sustainability strategies play in mediating these relationships. Data were collected using a survey of Australian managers and analysed using structural equation modelling (SEM). The findings indicate that each of the three levels of EAM – Environmental Activity Analysis, Environmental Activity Cost Analysis, and Environmental Activity Based Costing – influence-specific aspects of performance, either directly and/or indirectly through environmental and social sustainability strategies. The findings suggest that managers could enhance their use of EAM practices through the use of sustainability strategies in order to enhance performance. This study provides empirical insight into the impact that EAM practices and environmental and social sustainability strategies have on all three aspects of TBL performance.

Open Access
Article
Publication date: 27 January 2023

Alex Almici

This paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance…

3297

Abstract

Purpose

This paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance characteristics enhance the relationship between sustainability compensation and firms’ non-financial performance and to expand the domain of the impact of sustainability on non-financial performance.

Design/methodology/approach

This analysis is based on a sample of companies listed on the Milan Italian Stock Exchange from the Financial Times Milan Stock Exchange Index over the 2016–2020 period. Regression analysis was used by using data retrieved from the Refinitiv Eikon database and the sample firms’ remuneration reports.

Findings

The findings of this paper show that embedding sustainability in executive compensation positively affects firms’ non-financial performance. The results of this paper also reveal that specific corporate governance features can improve the impact of sustainability on non-financial performance.

Research limitations/implications

This analysis is limited to Italian firms included in the Financial Times Milan Stock Exchange Index; however, the findings are highly significant.

Practical implications

The findings provide regulators with useful insights for considering the integration of sustainability goals into executive remuneration. Another implication is that policymakers should require – at least – listed firms to fulfil specific corporate governance structural requirements. Finally, the findings can provide investors and financial analysts with a greater awareness of the role played by executive remuneration in the long-term value-creation process.

Originality/value

This paper contributes to addressing the relationship among sustainability, remuneration and non-financial disclosure, drawing on the stakeholder–agency theoretical framework and focusing on Italian firms. This issue has received limited attention with controversial results in the literature.

Details

Meditari Accountancy Research, vol. 31 no. 7
Type: Research Article
ISSN: 2049-372X

Keywords

Open Access
Article
Publication date: 15 December 2022

Cristina Sancha, Leopoldo Gutierrez-Gutierrez, Ignacio Tamayo-Torres and Cristina Gimenez Thomsen

This article studies the role played by sustainability operations management (OM) practices in the relationship between governance and environmental and social performance

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Abstract

Purpose

This article studies the role played by sustainability operations management (OM) practices in the relationship between governance and environmental and social performance adopting the lenses of the upper echelons theory and the resource-based view. In particular, the authors study three main relationships: (1) the impact of governance on the implementation of sustainability OM practices, (2) the impact of sustainability OM practices on sustainability performance and (3) the mediating role of sustainability OM practices in the relationship between governance and sustainability performance.

Design/methodology/approach

To test this study’s research model, the authors retrieved secondary data of 430 firms from the United Stated (US) and Europe and analyzed it using partial least squares (PLS)-based structural equation modeling (SEM).

Findings

This study’s results suggest that sustainability OM practices are needed to achieve higher social and environmental performance outcomes from governance, highlighting the key role of the OM department in the achievement of a sustainability strategy.

Originality/value

This paper adopts the environmental, social, governance (ESG) neglected focus and aims to provide a better understanding of and reveal the interrelationship between governance and sustainability OM practices (i.e. environmental and social).

Details

International Journal of Operations & Production Management, vol. 43 no. 13
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 3 October 2019

Pornanong Budsaratragoon and Boonlert Jitmaneeroj

The purpose of this study is to investigate the causal interrelations among the four pillars of corporate sustainability, which indicate a firm’s contribution to environmental

2881

Abstract

Purpose

The purpose of this study is to investigate the causal interrelations among the four pillars of corporate sustainability, which indicate a firm’s contribution to environmental, social, governance and economic activities. Moreover, this study identifies the critical drivers of corporate sustainability by focusing on the levels of market developments and geographical regions.

Design/methodology/approach

Based on corporate sustainability data of 2,725 global companies in 2016, this study uses a combination of analytical techniques including cluster analysis, data mining, partial least square path modeling and importance performance map analysis.

Findings

This study finds that companies in European developed markets exhibit the highest-ranking of corporate sustainability. In line with the social impact hypothesis, environmental, social and governance performance positively affects economic performance. Moreover, there is strong evidence of causal relationships and synergistic effects among the four pillars of corporate sustainability. In accordance with the institutional theory, the patterns of causal directions and the critical pillars depend on levels of market developments and geographical regions. Overall, social and environmental pillars are among the most critical drivers of corporate sustainability.

Research limitations/implications

The methodology does not aim to provide a new weighting scheme for calculating the corporate sustainability index.

Practical implications

Corporate managers should consider sustainability practices in all dimensions to benefit from synergistic effects among environmental, social, governance and economic activities. Furthermore, corporate sustainability strategies should not be generalized across countries with different levels of market developments and geographical regions.

Originality/value

This study prioritizes environmental, social, governance and economic pillars of corporate sustainability in emerging and developed markets across geographical regions.

Details

Measuring Business Excellence, vol. 23 no. 3
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 5 February 2018

Jing Wang and Jun Dai

The purpose of this paper is to contribute significantly to the empirical investigations related to the impact of sustainable supply chain management (SSCM) practices on…

4586

Abstract

Purpose

The purpose of this paper is to contribute significantly to the empirical investigations related to the impact of sustainable supply chain management (SSCM) practices on performance in Chinese firms. The paper also aims to theorize and empirically assess a comprehensive SSCM practices and performance model. The model incorporates two aspects of SSCM practices: internal and external management, and analyses the impact on corporate sustainability performance from all dimensions.

Design/methodology/approach

This paper develops a conceptual model to investigate the impact of SSCM practices on the firm performance. Based on the data of 172 Chinese firms, this paper analyzes the impact of SSCM practices on firm economic performance, environmental performance, and social performance for each dimension by using PLS structural equation methods.

Findings

The results show that firm’s internal SSCM practices have a positive impact on firm’s environmental performance and social performance. Moreover, environmental performance and social performance are positively related to economic performance.

Originality/value

A comprehensive SSCM practices performance model is proposed and empirically assessed for Chinese firms. The results of this investigation support the hypotheses that SSCM practices are environmentally and socially necessary and are favorable for business. A series of approach and implications of SSCM practices is recommended.

Details

Industrial Management & Data Systems, vol. 118 no. 1
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 20 December 2021

Jingsi Zhang, Liangqun Qi, Chengdong Wang and Xichen Lyu

This study aims to examine how servitization affects the environmental and social performance of manufacturing firms.

1007

Abstract

Purpose

This study aims to examine how servitization affects the environmental and social performance of manufacturing firms.

Design/methodology/approach

The hypotheses are tested using fixed-effect panel models based on secondary data of 1,413 manufacturing firms publicly listed in the USA.

Findings

Results show that servitization is positively related to the social performance of manufacturing firms; this positive relationship is more prominent under high levels of human resource slack. However, the impact of servitization on environmental performance depends on the level of absorptive capacity and human resource slack. Servitization improves environmental performance under high levels of absorptive capacity and human resource slack, while this positive impact is insignificant under low levels of absorptive capacity and human resource slack.

Research limitations/implications

The study focuses on the degree (depth) of servitization but ignores the scope of services provided by manufacturing firms (breadth of servitization).

Practical implications

This research suggests that servitization is an effective way of achieving simultaneous improvements in environmental and social performance. However, high levels of absorptive capacity and human resource slack are needed to achieve this goal.

Originality/value

This study contributes to the servitization literature by demonstrating the environmental and social sustainability benefits of servitization. The findings also highlight the crucial role of absorptive capacity and human resource slack on improving environmental and social performance through servitization.

Details

Journal of Manufacturing Technology Management, vol. 33 no. 3
Type: Research Article
ISSN: 1741-038X

Keywords

Article
Publication date: 16 August 2018

Gawon Yun, Mehmet G. Yalcin, Douglas N. Hales and Hee Yoon Kwon

The purpose of this paper is to evaluate the research conducted among the interim, dyadic interactions that bridge the stand-alone measures of economic, environmental and social

2249

Abstract

Purpose

The purpose of this paper is to evaluate the research conducted among the interim, dyadic interactions that bridge the stand-alone measures of economic, environmental and social performance and the level of sustainability, as suggested in the Carter and Rogers (2008) framework.

Design/methodology/approach

This paper conducts a systematic literature review based on the Tranfield et al. (2003) method of the articles published in 13 major journals in the area of supply chain management between the years 2010 and 2016. Results were analyzed using an expert panel.

Findings

The area of research between environmental and social performance is sparse and relegated to empirical investigation. As an important area of interaction, this area needs more research to answer the how and why questions. The economic activity seems to be the persistent theme among the interactions.

Research limitations/implications

The literature on the “environmental performance and social performance (ES)” interactions is lacking in both theoretical and analytical content. Studies explaining the motivations, optimal levels and context that drive these interactions are needed. The extant research portrays economic performance as if it cannot be sacrificed for social welfare. This approach is not in line with the progressive view of sustainable supply chain management (SSCM) but instead the binary view with an economic emphasis.

Practical implications

To improve sustainability, organizations need the triple bottom line (TBL) framework that defines sustainability in isolation. However, they also need to understand how and why these interactions take place that drive sustainability in organizations.

Originality/value

By examining the literature specifically dedicated to the essential, interim, dyadic interactions, this study contributes to bridging the gap between stand-alone performance and the TBL that creates true sustainability. It also shows how the literature views the existence of sustainability is progressive, but many describe sustainability as binary. It is possible that economic sustainability is binary, and progressive characterizations of SSCM could be the reason behind the results favoring economic performance over environmental and social.

Details

The International Journal of Logistics Management, vol. 30 no. 1
Type: Research Article
ISSN: 0957-4093

Keywords

Article
Publication date: 31 May 2019

Neha Saini and Monica Singhania

The purpose of this paper is to establish the relationship between environmentalsocial disclosure scores and corporate financial performance. The authors tried to investigate the…

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Abstract

Purpose

The purpose of this paper is to establish the relationship between environmentalsocial disclosure scores and corporate financial performance. The authors tried to investigate the relevance of assurance practice (whether or not companies’ assessment policies are subject to individual assessment for the given period) and value relevance in foreign-owned firms.

Design/methodology/approach

This research is based on accounting-based valuation model proposed by Berthelot et al. (2003), considering the market value of equity as the function of book value and other financial indicators including Return of Assets and Return on Capital Employed. Environmental and social disclosure scores are extracted from Bloomberg database as the measure of company’s transparency in reporting value relevance information and sustainable development. The study considers the sample period of 8 years (2008‒15) and uses static (fixed effects and random effects) and dynamic (generalised methods of moments (GMM)) panel data estimations for analysing and concluding results.

Findings

The results support the evidence of environmental disclosure score as performance relevance indicator. Environmental disclosure score highlights the positive and significant relationship with different performance indicators. The interaction between foreign ownership and environmental disclosure represents a negative association, implying that foreign ownership is incubating more on profit making rather than environmental protection initiatives. However, in the context of the social disclosure score, a positive association with economic performance is found. But interaction term between foreign ownership and social disclosure represented a negative coefficient.

Originality/value

Value relevance disclosures are investigated with performance indicators that create an incentive for stakeholders. Also, the effect of foreign ownership and value relevance interaction term on firm’s financial performance is determined. To the best of authors’ understanding, previous literature is silent about this dimension. The authors also tried to incorporate the solution to the endogeneity issue by using GMM.

Details

Benchmarking: An International Journal, vol. 26 no. 6
Type: Research Article
ISSN: 1463-5771

Keywords

1 – 10 of over 83000