Search results

The aim of this study is to critically examine the transparency and reporting practice of Environmental, Social, and Governance (ESG) controversies within the pharmaceutical and textile industry. Based on the four core dimensions of transparency, we explore which reporting medium is most frequently chosen for the disclosure of negative ESG contributions, the nature and information content of the disclosed incidents and how voluntary adherence to sustainability reporting standards and independent assurances affect the reporting.

We use conceptual content analysis and employ a counter-accounting approach to analyse the disclosure of 190 ESG controversies in 104 corporate reports from the pharmaceutical and textile industries, covering a three-year period from 2018–2020.

The very large majority of controversies are reported only once in the legal proceedings section of the annual report, but not again in the sustainability report, where it would be necessary to provide a balanced picture. Moreover, companies tend to disclose only those controversies that are either associated with high media attention or are expected to be related to litigation, resulting in 26 per cent of controversies not being disclosed at all. The overall quality of disclosure is unsatisfactory and in need of improvement, but comparably higher in the pharmaceutical industry than in the textile industry. Interestingly, neither the application of sustainability reporting standards nor independent assurance seems to positively impact the disclosure behaviour.

Our paper provides new insights into the shortcomings of current ESG controversy disclosures by revealing patterns of selective reporting practices and the strategic framing of issues. In addition, it contributes to the debates on corporate cherry-picking in the adoption of sustainability reporting guidelines and on the effectiveness of external assurance of sustainability reports. Based on the findings, it offers important implications for practitioners, in particular management, policy makers, rating agencies and assurance providers.

This study investigates the relationships between environmental, social, and governance (ESG) controversies and insolvency risk in the insurance sector. Drawing from legitimacy and stakeholder theories, the authors explore the impact of ESG controversies on insurers’ insolvency risk and the moderating effect of ESG practices on this relationship.

This study utilises a dataset comprising 120 stock insurance firms spanning from 2011 to 2022. The authors employed system-GMM estimations to control for potential endogeneity and conducted several robustness checks.

ESG controversy positively influences insurers’ insolvency risk, with ESG practices mitigating these positive effects. The Governance (G) component of ESG practices plays a key role in counteracting the effects of ESG controversies on insurance companies’ insolvency risk.

This is the first study to investigate the direct relationship between ESG controversies and insolvency risk in the insurance industry. It underscores the critical influence of stakeholders’ perceptions of the company’s legitimacy, which is determined by the number of ESG controversies undertaken by the insurer company, on its insolvency risk. Additionally, by examining the three components of ESG practices individually, the authors offer insights into how managers can gain a competitive edge, particularly by utilising governance practices as safeguards against the adverse effects of ESG controversies on their financial risk.

This study aims to investigate the effect of ESG controversies and their moderating role in ESG performance and the cost of equity and overall, short-term and long-term debt capital relationship in European listed companies.

The study employs two-way fixed effects panel linear regression models on the balanced longitudinal dataset of 231 European non-financial companies listed in the MSCI Europe Index in 2017–2022. To check the robustness, the study utilises the fixed effects logistic regression models with heteroskedasticity-consistent standard errors.

The study reveals the significant effect of ESG performance (negative) and ESG controversies (negative) on the cost of debt capital and the substantial moderating effect of ESG controversies (positive). Additionally, it provides empirical evidence of the crossover moderating effect of ESG controversies in ESG performance and cost of equity relationship.

The findings contribute to corporate practice and empirically support legitimacy and stakeholder theories.

Companies can utilise the results to proactively enhance their internal policies and behaviour to align with ESG practices and avoid ESG controversies, which will translate into reduced equity capital costs for shareholders and a lower cost of debt capital charged by creditors.

To the best of the authors’ knowledge, this is the first study to comprehensively investigate the influence of ESG controversies and their moderating effect in the context of the equity and debt capital cost for European listed companies.

The study aims to determine whether a relationship exists between the potential significance of corporate controversies for stakeholders and how organisations respond to them in their annual and sustainability reports.

This paper employs content analysis on annual and sustainability reports of 48 listed companies from the Refinitiv database. The logit regression was used to estimate the model.

The study revealed that the main factors increasing the probability of a controversial issue being addressed in a corporate report are the controversy’s potential significance, companies’ financial performance and lawsuits.

Our study has three major limitations. These are a relatively small sample of companies and reports, focusing on disclosures made in corporate reports and omitting other channels of communication, for example, social media, and a certain amount of subjectivity in the process of coding information.

Former studies show that corporations face a serious risk of their hypocritical strategies becoming too evident for stakeholder groups. Our findings suggest that the risk is already materialising and may undermine the idea of CSR and sustainability reporting.

Our research focuses on high-profile adverse incidents widely reported in the media, the omission of which from corporate reports seems to constitute a particular case of organised hypocrite. It also demonstrates that companies use an impression management strategy to defuse adverse publicity and that major controversies cause minor ones to be omitted from their reports.

Whether environmental, social and governance (ESG) factors are a curse or a blessing in the run for performance is still a burning issue. This is all the more true for banks, as their call for action in ESG dimensions clashes with evidence of scandals. As a more aligned to reality view, we propose to regard the mistreatment of ESG issues, both theoretically and empirically, as an undesirable output of banks' everyday activity. Empirically, we question whether 128 leading banks worldwide neglected the minimisation of ESG controversies (ESGC) in pursuing traditional productive efficiency, over the timespan 2011–2021.

To our end, we use oriented distance functions according to the nonparametric efficiency approach of data envelopment analysis (DEA). This framework accounts for undesirable outputs.

Being inefficient in the ESGC domain is not a necessary evil to achieve productive efficiency. Instead, incurring in higher ESGC negatively affects productive efficiency, by causing future decrease of reputation and performance.

We propose a new paradigm of banks’ activity and related efficiency evaluation. In so doing, we favour a real dimension of banks’ engagement in ESG concerns.

The purpose of the paper is to produce new knowledge about the positions that public libraries both take and are given in the conflicts over politics and identity that play out in contemporary cultural and library policy debates. Using conflicts over drag story hour at public libraries as case, the study seeks to contribute to an emerging body of research that delves into the challenges that public libraries as promoters of democracy are confronting in the conflictual political landscape of today.

The paper presents an analysis of debates reported in news articles concerning Drag story hour events held at Swedish public libraries. Utilizing the analytical lenses of discourse theory and plural agonistics, the analysis serves to make visible the lines of conflicts drawn in these debates – particularly focusing on the intersection of different meanings ascribed to the notion of the reading child, and how fear is constructed and used as an othering devise in these conflicts.

Different imaginings of the reading child and the construction and imagination of fear and safety shapes the Drag story hour debates. The controversies can be understood as a challenge to the previous hegemony regarding the direction and goals of Swedish cultural and library policy and the pluralistic democratic society these policies are meant to promote.

The paper offers new insights into the consequences of the revival of radical right politics, populism and societal polarization, and the different responses from public libraries.

As financial firms incorporate impact strategies more extensively into their operations, they are asked to sustain their impact claims and thus face increased risks of regulatory scrutiny and lawsuits from private and public parties. The lack of reliable frameworks to measure impact gives rise to phenomena like impact washing, leading to litigations. This article aims to explore the main factors contributing to the impact litigation risk and the mechanisms employed by practitioners in the impact investing field to navigate and address this challenge.

We conducted semi-structured interviews involving three impact investors and three impact lawyers with specific knowledge of ESG and impact controversies, adopting the Gioia Methodology for the analysis. We triangulated such information with the analysis of secondary data.

The “great noise” around the impact investing world and the rise of impact washing, the lack of shared standards for measuring impacts and the misalignment of interests among actors involved in the initiatives constitute a potential “litigation bomb”. Such a scenario is detrimental to an investment strategy, which has the potential to tackle societal issues.

This study represents an initial effort to connect the academic debate on impact litigation with the expert’s active “on-field” standpoints. The identified and validated drivers of impact litigations provide valuable insight to enhance the governance and accountability of impact investing. Implementing Impact Measurement and Management (IMM) tools, participatory governance models, clear impact-focused contracts and a proactive approach could serve as prospective solutions to mitigate the risk of disputes.