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Circular economy is an emerging concept which requires insights from a variety of disciplines, especially from sustainable operations management. Therefore, the purpose of this paper is to verify how formal and informal instruments of governance influence the induction of green practices in a green network located in Brazil, with implications for the circular economy.

Based on a review of the supply chain (SC), green supply chain management, and governance literature, proposals are made regarding the influence of governance instruments in inducing green practices. To investigate these propositions, a qualitative research was conducted using a single exemplary case study of a cosmetics supply network.

The authors present original research findings which have both expected and unexpected implications for the circular economy, due to the fact that the data analysis showed that the formal (contracts and environmental norms) and informal (trust and cooperation) instruments of governance positively influence the induction of green practices within the supply network.

This study contributes to supply network and governance theory by providing insights for better understanding of how governance instruments can induce green practices in a supply network, and it provides practical implications for SC managers, by showing the importance of considering different governance instruments. Implications for the circular economy are made.

Corruption and anti-corruption are two often studied topics in social sciences today and often highly debated issues in both the national and international political arena. They are important in the context of democratization and democratic consolidation as they include the idea of a government that serves its citizens in a transparent manner, and tie with it notions of social and political trust. The purpose of this study is to evaluate the relationship between anti-corruption policies and social and political trust and hypothesizes that anti-corruption policies have a desired positive effect on social and political trust in settings with low and moderate levels of corruption, whereas they have no effect in highly corrupt settings.

The study uses regression analysis and includes all world democracies (33) for which complete data are available for a period of nine years (2005-2014).

Results indicate that anti-corruption policies have the expected results on social trust: in low to moderately corrupt countries, the effect is positive, while it disappears in highly corrupt countries. There are no significant effects on political trust.

While the results are mixed, they point to the importance of studying further the relationship.

This study is important because it questions the effect of anti-corruption policies that are assumed to have particular effects on corruption. It is also the first study to analyze the effect on such policies on social and political trust in democracies.

The intensity of carbon emissions has led to the serious problem of global warming, and the consequences in terms of climatic disasters are gaining increasing attention worldwide. As the energy sector is responsible for most global emissions, developing clean energy is crucial to combat climate change. This study aims to examine the relationship between corporate governance and renewable energy (RE) consumption and explore the interaction between RE production and RE use.

The study adopts an econometric framework of a panel model, followed by the robustness check using alternative methods, including logit regressions. The bivariate probit model is used to analyze the interaction between the decision to use and the decision to produce RE. The analysis is based on a sample of 3,896 firms covering 45 countries worldwide.

The results reveal that appropriate governance mechanisms positively impact RE consumption. These include the existence of a sustainability committee; environmental, social and governance-based compensation policy; financial performance-based compensation; sustainability external audit; transparency; board gender diversity; and board independence. Firms with appropriate governance mechanisms are more likely to produce and use RE than others. Finally, while RE use positively impacts firm value and environmental performance, the authors find no significant effect on current profitability.

This study goes beyond previous research by exploring the impact of multiple governance mechanisms. To the best of the authors’ knowledge, this is also the first study examining the relationship between RE use and firm value. Overall, the findings suggest that RE transition requires, first of all, establishing appropriate governance mechanisms within companies.

This study aims to investigate the conditional direct and indirect effects of supply chain relational capital (RC) on supply chain sustainability via sustainability governance.

In line with the study’s aims, a quantitative survey-based approach was adopted. This study uses a random sample of 272 manufacturing firms from the apparel industry in Bangladesh. This study assesses the measurement model using partial least square-based structural equation modelling and test the proposed hypotheses using the Hayes PROCESS.

The results reveal that the indirect effect of supply chain RC on supply chain sustainability via sustainability governance is significant. While at low levels of network complexity (NC), the conditional indirect effect of supply chain RC on supply chain sustainability via sustainability governance is significant, this study finds that such indirect effects are insignificant at high levels of NC. This study further shows that NC positively moderates the relationship between supply chain RC and supply chain sustainability.

While previous studies have demonstrated the role of RC in adopting sustainability practice, this study explores this link further by investigating the conditional direct and indirect effects of supply chain relational capital on supply chain sustainability via sustainability governance.

This study aims to examine the relationship and effect of integrated reporting (IR) quality on sustainability performance and explore the relationships and effects of corporate governance mechanisms on IR quality and sustainability performance.

Partial least squares structural equation modelling (PLS-SEM) was used in a longitudinal study by following the steps in Roemer’s Evolutionary Model on a sample of listed companies on the Johannesburg Stock Exchange (JSE) in South Africa for a period from 2011 to 2016.

This study finds board effectiveness and external audit quality to be important determinants of IR quality. It also observes a strong effect of the IR quality on sustainability performance.

This study contributes by using and analysing a longitudinal data set from JSE, currently the only capital market globally requiring the mandatory IR application since 2010.

This study aims to investigate the effects of board attributes, i.e. board independence, gender diversity, board size and board activity, on the sustainability performance of 439 publicly-listed non-financial companies across 20 emerging countries over the period of 2010–2019.

We use Refinitiv environmental, social and governance (ESG) performance scores and board attributes variables derived from Thomson Reuters Eikon database. We examined the relationship between board features and sustainability performance by using the dynamic panel two-step system generalized method of moments estimator.

Overall, our findings suggest that smaller, gender diverse and independent boards that convene frequently achieve better sustainability performance. The authors document a positive relationship between board gender diversity and sustainability performance across a broad spectrum of sustainability indicators. The authors also find evidence that board independence has a positive impact on two sustainability performance measures, i.e. environmental and governance performance. Although board size does not influence aggregate sustainability measures (ESG score, ESG controversies, and ESG combined score), the authors find a negative relation between board size and governance performance. Finally, board activity seems only relevant in explaining ESG controversies, i.e. other things being equal frequently held board meetings significantly reduce sustainability issues (ESG controversies).

The authors’ findings provide implications to support regulators and emerging market companies on how to improve sustainability performance through the design and use of specific governance mechanisms. These interventions will help resolve agency problems among different stakeholders and, in turn, benefit sustainability.

This study also has social implications because it sheds light on how companies may change their attitudes towards sustainable practices through adjusting their corporate governance structures to increase the welfare of the society.

This study examines the behaviour of companies in emerging markets on sustainability performance by discussing a broad range of board characteristics and covering a large sample of emerging markets. Thus, it provides valuable insights to the companies for further growth opportunities in emerging markets.

This paper aims to contribute to the development of the European Union (EU) regulatory environment for sustainability reporting by analyzing how materiality is defined in the Non-Financial Reporting Directive (NFRD) and Corporate Sustainability Reporting Directive (CSRD) and by examining the added value and challenges of legalizing reporting and materiality requirements from both regulatory and practical company perspectives. It provides insights on whether this is reflected by EU pharmaceutical companies and to what extent companies report information on their materiality analysis process.

Doctrinal analysis was used to examine regulatory instruments. Qualitative document analysis was used to analyze companies’ reports. The added value and challenges were examined using a governance approach. It focused on legalizing reporting and materiality requirements, with a brief extension to corporate management and organization studies.

Materiality has evolved from a vague concept in the NFRD toward double materiality in the CSRD. This was reflected by the industry, but reports revealed inconsistencies in materiality definitions and reported information. Challenges include lack of self-reflection and company-centric perceptions of materiality. Companies should explain how they identify relevant stakeholders and how input is considered in decision-making.

Managers must consider how they conduct materiality assessments to meet society’s expectations. The underlying processes should be explained to increase the credibility of reports. Sustainability reporting should be seen as a corporate governance tool.

This work contributes to the literature on materiality in sustainability reporting and to the debate on the need for a holistic, society-centric approach to enhance the sustainability of companies.

This study aims to understand how firms in developing economies acquire knowledge about social sustainability by leveraging the social capital embedded in firms' social network, through optimally governing relationships with network members. The study proposes that relational and contractual governance mechanisms interact with various structural facets of the network, resulting in varying degrees of social sustainability related knowledge acquisition.

Primary data collected with a multiple respondent survey design from 204 manufacturing firms located in major industrial cities in Pakistan were used. Confirmatory factor analysis (CFA) followed by hierarchical regression analysis is used to test the hypotheses.

The study finds that both relational and contractual governance mechanisms are positively related to a firm’s social sustainability-related knowledge acquisition, but their effectiveness is impacted by the structural facets of the network. Network size positively moderates the relationship between relational governance and social sustainability related knowledge acquisition, whereas both network range and strength of ties negatively moderate the relationship between contractual governance and social sustainability related knowledge acquisition.

Practitioners with resource-constrained firms should interact with their social network to leverage the knowledge and resources embedded within. The findings prescribe optimal governance strategies for different combinations of network structure variables to gain maximum knowledge about social sustainability.

The literature lacks information on the effect of network structure on the relationships between social network governance and social sustainability-related knowledge acquisition for resource-constrained firms in the developing economy context, making this study’s contributions unique.

This study aims to examine whether the sustainability committee, a specialized governance mechanism for environmental and social issues, is related to environmental performance. Specifically, the authors consider the presence and effectiveness of the sustainability committee.

Using a sample of Australian firms (2002–2016), the presence of a sustainability committee and sustainability committee effectiveness (consisting of 12 sustainability committee characteristics) are examined. Firms’ environmental performance is measured by Thomson Reuters Asset4 ratings.

The authors confirm prior findings of a positive relationship between the presence of a sustainability committee and the firm’s environmental performance. More importantly, sustainability committee effectiveness is found to be positively associated with environmental performance, indicating the active role that the composition and function of the sustainability committee plays in enhancing environmental performance.

The findings are of interest to directors and managers who are interested in improving firms’ environmental performance, in addition to investors and regulators who are concerned about environmental performance.

This study meaningfully expands the extant literature that studies the sustainability committee in at least three ways. First, the authors evidence the effect of an unexplored dimension of committee heterogeneity (sustainability committee effectiveness) by hand-collecting detailed information of sustainability committee members. Second, the authors distinguish from prior studies, in that the authors test the direct relationship between sustainability committee effectiveness and environmental performance. Third, by adopting different robustness tests of endogeneity along with sampling firms in various industries over 15 years, the authors offer more compelling and more comprehensive evidence in this regard. Broadly, the authors enrich the literature on corporate governance and environmental performance.

Sustainability is a pressing challenge of governance and public financial management. One key element of sustainable governance is the role of citizens. Participatory budgeting (PB) is a participatory tool with which citizens can influence public administration. PB is a democratic process that grants people real power over real money and it has spread around the world. This special issue explores the role of PB in the context of sustainable governance. In this editorial, the authors aim to approach PB as a form of sustainable governance.

In this editorial, the authors collaborate in the analysis of how PB is implicated in the public management of complex social, economic and ecological issues. The authors identify key dimensions of internal and external sustainability based on prior research. The authors approach these dimensions as an internal–external nexus of sustainable governance in which organizational and financial sustainability are the internal dimensions and socio-political and environmental sustainability are the external dimensions.

Even though PB can be seen as one tool for citizen participation, it has the potential to foster sustainability in multiple ways. PB, as a form of sustainable governance, requires a financially and administratively sustainable organizational process that results in the institutionalization of PB. It also includes thorough consideration of socio-political and environmental sustainability impacts of PB.

Academics are actively studying PB from various perspectives. However, most of this work has approached PB from the viewpoints of design and results of PB, and less is known about its institutional settings. PB has not yet been adequately studied in the context of sustainability, and there is a need to scrutinize PB as a form of sustainable governance.