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Plastun, Alex, Inna Makarenko, Yulia Yelnikova, and Serhiy Makarenko. "Environmental, social and governance investment standardization: moving towards sustainable economy." Environmental Economics 10, no. 1 (May 8, 2019): 12–22. http://dx.doi.org/10.21511/ee.10(1).2019.02.
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This paper is devoted to the investigation of environmental, social and governance investment (investment with ESG criterion) normative base in the context of standardization process in sustainable economy financing. Complexity of such standardization and the lack of commonly accepted regulations, indexes metrics are under discussions of scholars, which encourage the need for clear guidance in ESG investment. 651 sustainability rating products and more than 300 investment policy instruments in different countries show the need for classifying the ESG standards. The solution of this scientific and practical task is based on the developed ESG investment standards system classifications. Proposed classification incorporates such criteria as level of standards adoption, mandatory degree, sectorial specificity, degree of companies’ awareness of responsible activity, ensuring transparency and the benchmarks formation, creating the institutional support of the ESG investment standardization process in sustainable economy and making more grounded investment and regulatory decisions.
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Tarmuji, Indarawati, Ruhanita Maelah, and Nor Habibah Tarmuji. "The Impact of Environmental, Social and Governance Practices (ESG) on Economic Performance: Evidence from ESG Score." International Journal of Trade, Economics and Finance 7, no. 3 (June 2016): 67–74. http://dx.doi.org/10.18178/ijtef.2016.7.3.501.
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Camilleri, Mark Anthony. "Environmental, social and governance disclosures in Europe." Sustainability Accounting, Management and Policy Journal 6, no. 2 (May 5, 2015): 224–42. http://dx.doi.org/10.1108/sampj-10-2014-0065.
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Purpose – The purpose of this paper is to shed light on the European Union’s (EU) latest regulatory principles for environmental, social and governance (ESG) disclosures. It explains how some of the EU’s member states are ratifying the EU Commission’s directives on ESG reporting by introducing intelligent, substantive and reflexive regulations. Design/methodology/approach – Following a review of EU publications and relevant theoretical underpinnings, this paper reports on the EU member states’ national policies for ESG reporting and disclosures. Findings – The EU has recently revised a number of tools and instruments for the reporting of financial and non-financial information, including the EU’s modernisation directive, the EU’s directive on the disclosure of non-financial and diversity information, the EU Energy Efficiency Directive, the European pollutant release and transfer register, the EU emission trading scheme, the integrated pollution prevention and control directive, among others. Practical implications – Although all member states are transposing these new EU directives, to date, there are no specific requirements in relation to the type of non-financial indicators that can be included in annual reports. Moreover, there is a need for further empirical evidence that analyse how these regulations may (or may not) affect government entities and big corporations. Social implications – Several EU countries are integrating reporting frameworks that require the engagement of relevant stakeholders (including shareholders) to foster a constructive environment that may lead to continuous improvements in ESG disclosures. Originality/value – EU countries are opting for a mix of voluntary and mandatory measures that improve ESG disclosures in their respective jurisdictions. This contribution indicates that there is scope for national governments to give further guidance to civil society and corporate business to comply with the latest EU developments in ESG reporting. When European entities respond to regulatory pressures, they are also addressing ESG and economic deficits for the benefit of all stakeholders.
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Velte, Patrick. "Institutional ownership, environmental, social, and governance performance and disclosure – a review on empirical quantitative research." Problems and Perspectives in Management 18, no. 3 (September 22, 2020): 282–305. http://dx.doi.org/10.21511/ppm.18(3).2020.24.
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Since the financial crisis of 2008–2009, nonfinancial-related shareholder activism increased, as public interest entities (PIEs) should strengthen their environmental, social, and governance (ESG) activities. This study aims to determine whether institutional ownership (IO) impacts ESG performance and disclosure and vice versa. Moreover, IO’s moderating and mediating influence on the relationship between ESG and firms’ financial consequences is included. This is the first literature review focusing on IO and ESG, describing IO as independent, dependent, moderator, and mediator variable. A structured literature review with 81 empirical-quantitative (archival) studies on that topic is presented based on an agency theoretical framework. Regarding the main results, long-term IO leads to increased ESG performance. Moreover, ESG performance promotes the ratio of institutional investors. Other relationships are rather heterogeneous and too low in an amount yet, stressing major research gaps.
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Harymawan, Iman, Fajar Kristanto Gautama Putra, Bayu Arie Fianto, and Wan Adibah Wan Ismail. "Financially Distressed Firms: Environmental, Social, and Governance Reporting in Indonesia." Sustainability 13, no. 18 (September 10, 2021): 10156. http://dx.doi.org/10.3390/su131810156.
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This study examines the relationship between financial distress and environmental, social, and governance (ESG) disclosure. We hypothesize that financially distressed firms are tempted to enhance ESG disclosure as it provides higher performance in terms of financial and market perspectives. ESG disclosure needs substantial resources, which financially distressed firms may not be able to provide. In Indonesian settings, we find that financially distressed firms have lower ESG disclosure quality than non-distressed firms. Our results are robust due to lagged variable, Heckman’s two stages, and coarsened exact matching regression showing consistent results. Furthermore, our results are consistent with three years of rolling windows of financial distress and all sections of ESG reporting, except the general information section. This study extends the scope of prior studies by focusing on firms’ eagerness to provide higher quality ESG disclosure, particularly distressed firms.
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Samina Rooh, Muhammad Zahid, Muhammad Farooq Malik, and Muhammad Tahir. "Corporate Governance Characteristics and Environmental, Social & Governance (ESG) Performance: Evidence from the Banking Sector of Pakistan." Journal of Business & Tourism 7, no. 1 (June 30, 2021): 35–50. http://dx.doi.org/10.34260/jbt.v7i1.218.
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The purpose of the paper is to examine the impact of corporate governance on environmental, social, and governance (ESG) performance.This paper alsoinvestigates the influence of corporate governance on environmental, social, and governance (ESG) disclosure.The majority of previous empirical research studies have either centered on ESG disclosure in developed economies, but the present problem concerning the corporate sector is defining the role of corporate governance in improving ESG performance inthe banking sectors of Pakistan.This paper is based on quantitative and secondary data approaches. The datawas collected fromthe annual reportsof 17 public and privatecommercial banks of Pakistan through an adapted ESG index. This study applied the Stata 13.0 panel data approach to analyzing the effect of corporate governance on ESG performance. Theresults showed that gender diversity, boardindependence,and return on assets(ROA) positively affect ESG performance. The board size and firm size havean insignificant impact on the ESG performance. Furthermore, firm age and previous year ESG practices (lag of ESG) have a significant positive role inthe improvement of ESG performance.However, in contrast, firm leverage has a negative significant effect on the ESG practices of the banking sectors.This papertries to fulfill the gap by examiningcorporate governance and ESG performance in the banking sectors ofPakistan. The findings of the study have significant implications for the top management of the banks, financial experts, regulatory bodies, investment advisors, academics practitioners, and Pakistan stock exchange towards the better implementation of corporate goverance and ESG practices.
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Cek, Kemal, and Serife Eyupoglu. "DOES ENVIRONMENTAL, SOCIAL AND GOVERNANCE PERFORMANCE INFLUENCE ECONOMIC PERFORMANCE?" Journal of Business Economics and Management 21, no. 4 (June 11, 2020): 1165–84. http://dx.doi.org/10.3846/jbem.2020.12725.
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The purpose of this paper is to evaluate the influence of environmental, social and governance performance on the economic performance of the Standard & Poor’s 500 companies. Structural equation modeling and linear regression have been utilized to measure the overall and individual influence of environmental, social and governance (ESG) performance on economic performance using longitudinal data comprising the years from 2010 to 2015. The overall ESG model had a significant relationship on economic performance. Furthermore, the findings of this study show that social and governance performance significantly affects economic performance in all regression models. However, environmental performance failed to show a significant relationship. The research contributes to the literature by providing insights for investors, managers and employees about the influence of ESG performance on company performance.
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Zhang, Xinying, Cun Zhou, and Shiyun Zhang. "The Environmental, Social and Governance (ESG) Responsibilities of Landscape Architecture Firms." E3S Web of Conferences 143 (2020): 02045. http://dx.doi.org/10.1051/e3sconf/202014302045.
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ESG performance has a positive influence on the long-term sustainable development of both the firm and the society. LA is concerned about the relationship among humans, the buit, and nutural environments, so it is of especial importance to study what LA firms are supposed to do in ESG practice. This paper made a detailed discussion about each of the ESG responsibilities of LA firms respectively in accordance with the distinctive firm characteristics of the LA industry. This study might have two possible implications for the literature on ESG: (1) an industry-based approach to the study of ESG performance is of theoretical and realistic significance; and (2) ESG responsibilities are worthy of attention for the study of LA firms.
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Asvathitanont, Chayakrit, and Nopphon Tangjitprom. "The Performance of Environmental, Social, and Governance Investment in Thailand." International Journal of Financial Research 11, no. 6 (December 14, 2020): 253. http://dx.doi.org/10.5430/ijfr.v11n6p253.
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The environmental, social, and governance (ESG) investment has evolved from the concept of socially responsible investing (SRI) starting in the period concerned with the civil rights movement and social responsibility. The concept of socially responsible investing has evolved into sustainable investment focusing on the companies that show concerns about environmental, social, and governance (ESG). This study aims to investigate the performance of ESG investment in the Stock Exchange of Thailand based on the list of companies with good performances in environmental, social and governance known as “ESG100 Companies” in Thailand. The performance of ESG investment is not different from the corresponding benchmarks. However, the risk of ESG portfolio is lower both in term of total risk and systematic risk, which results in the abnormal performance measured by Jensen’s Alpha. Finally, the list of ESG100 companies does not provide only static information in portfolio selection, but it can also provide information like the persistence in the list or the new inclusion to the list that can help in constructing the investment portfolio and generate abnormal performance.
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Yeoh, Peter. "Sustainability of Environmental, Social and Governance The Sustainability of Environmental, Social and Governance (ESG) Reporting in the US and the UK." Business Law Review 42, Issue 6 (December 1, 2021): 272–81. http://dx.doi.org/10.54648/bula2021038.
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Regardless of the controversy over the impact of environmental, social and governance (ESG) issues on the fates or fortunes of business corporations, calls whether from policymakers (I. Mirza, ‘Congress a step closer to making corporate ESG disclosure mandatory’ (2021), JD Supra, 28 June 2021, https://www.jdsupra.com/legalnews/congress-a-step-closer-tomaking- 9721287/ (accessed 8 Aug. 2021), social advocates (J. Jaeger, ‘Activist investor win at ExxonMobil should be wake-up call for companies’ (2021), Compliance Week, 15 June 2021, https://www.complianceweek.com/boards-andshareholders/ activist-investor-win-at-exxonmobil-should-bewake- up-call-for-companies/30475.article (accessed 8 Aug. 2021), and from businesses itself (A. Murray & K. Dunn, ‘CEOs are calling for more regulation-of ESG standards’, Fortune, 12 August 2021, https://fortune. com/2021/08/12/ceos-are-calling-for-more-regulationof-esgstandards/ (accessed 12 Aug. 2021), are increasingly made throughout the course of the present COVID-19 pandemic cycle for regulatory actions (C.A. Adams & S. Abhayawansa, ‘Connecting the COVID-19 pandemic, environmental, social and governance (ESG) investing and calls for “harmonisation” of sustainability reporting’, Critical Perspectives on Accounting, https://doi.org/10.1016/j.cpa. 2021.10230908/08/21 (accessed 9 Aug. 2021). Various facets of the COVID-19 pandemic have been blamed for their impacts on the lives and livelihoods of people across the world (OECD, ‘Coronavirus: The world economy at risk’ (2020), OECD Interim Economic Assessment (2 Mar. 2020), https://www.oecd.org/berlin/publikationen/Interim- Economic-Assessment-2-March-2020.pdf (accessed 8 Aug. 2021), including those in the US and the UK, but equally business corporations (E. Reicin, ‘Businesses should be held accountable for their ESG claims’ (2021), Forbes (23 Mar. 2021), https://www.forbes.com/sites/forbesnonprofitcouncil/ 2021/03/23/businesses-should-be-held-accountable-for-theiresg- claims/?sh=67265fd25679 (accessed 8 Aug. 2021) and governments (K.P. Pucker, ‘Overselling sustainability reporting’ (2020), Harvard Business Review, May–June 2020, https://hbr.org/2021/05/overselling-sustainability-reporting (accessed 8 Aug. 2021) have also been blamed for their respective failures to do their parts in addressing ESG challenges that have become more prominent. Trust law, commercial trust, evolution of the role of a trustee, rule of law, whether a commercial trust is in the essence of a trust
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Ruan, Lei, and Heng Liu. "Environmental, Social, Governance Activities and Firm Performance: Evidence from China." Sustainability 13, no. 2 (January 14, 2021): 767. http://dx.doi.org/10.3390/su13020767.
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Increasingly noticeable environmental and risk problems have made more and more companies and regulatory agencies realize the importance of environmental, social, and governance (ESG) activities. However, on the question that whether ESG activities have promoted or reduced firm performance, there is still no consensus. Especially for China, a representative country in emerging markets whose corporate ESG activities are still in their infancy and related systems and regulatory measures not complete, its theoretical and practical circles more urgently need to know an accurate answer to this question. Therefore, this article takes China’s Shanghai and Shenzhen A-share listed companies that have ESG rating data from 2015 to 2019 as samples and finds that corporate ESG activities have a significantly negative impact on firm performance. Further research finds that compared with state-owned enterprises and environmentally sensitive enterprises, non-state-owned enterprises and non-environmentally sensitive enterprises provide stronger evidence to support the above conclusions.
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Triyani, Agus, and Suhita Whini Setyahuni. "PENGARUH KARAKTERISTIK CEO TERHADAP PENGUNGKAPAN INFORMASI ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG)." Jurnal Ekonomi dan Bisnis 21, no. 2 (October 13, 2020): 72. http://dx.doi.org/10.30659/ekobis.21.2.72-83.
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This study intends to examine the effect of CEO characteristics on environmental, social, and governance (ESG) disclosure. We took sample by using pusposive technique in� public listed companies in Indonesia during 2012-2017 periods. A total of 159 firms-years observations were included in the sample. The results indicate that CEO�s tenure and CEO�s age impact ESG disclosure negatively, while educational background impact ESG disclosure positively. Our findings provide new evidence on the role of CEO on companies�s sustainability performance. The findings are expected to be able to ensure the importance of choosing the right CEO�s characteristics in order to enhance ESG disclosure.
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Atan, Ruhaya, Md Mahmudul Alam, Jamaliah Said, and Mohamed Zamri. "The impacts of environmental, social, and governance factors on firm performance." Management of Environmental Quality: An International Journal 29, no. 2 (March 12, 2018): 182–94. http://dx.doi.org/10.1108/meq-03-2017-0033.
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Purpose The ESG factor, which consists of environmental, social, and governance factors, represents the non-financial performance of a company. United Nations Principles for Responsible Investment invites investors to consider ESG issues when evaluating the performance of any company. Moreover, nowadays, the contribution of corporations towards sustainable development is a major concern of investors, creditors, government, and other environmental agencies. Therefore, the purpose of this paper is to examine the impact of ESG factors on the performance of Malaysian public-limited companies (PLC) in terms of profitability, firm value, and cost of capital. Design/methodology/approach A total of 54 companies are selected from Bloomberg’s ESG database that has complete ESG and financial data from 2010 to 2013. This study conducted panel data regressions such as the pooled OLS, fixed effect, and random effect. Findings Based on the regression results, there is no significant relationship between individual and combined factors of ESG and firm profitability (i.e. ROE) as well as firm value (i.e. Tobin’s Q). Moreover, individually, none of the factors of ESG is significant with the cost of capital (weighted average cost of capital, WACC), but the combined score of ESG positively and significantly influences the cost of capital (WACC) of a company. Practical implications As this is a new study on Malaysia, the findings of this study will be useful to investors, SRI analysts, policy makers, and other related agencies. Originality/value To the best of the authors’ knowledge, this study is among the first empirical study to examine the impact of ESG factors on the performance of Malaysian PLC in terms of profitability, firm value, and cost of capital.
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Aboud, Ahmed, and Ahmed Diab. "The impact of social, environmental and corporate governance disclosures on firm value." Journal of Accounting in Emerging Economies 8, no. 4 (November 5, 2018): 442–58. http://dx.doi.org/10.1108/jaee-08-2017-0079.
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PurposeThe purpose of this paper is to examine the impact of environmental, social, and governance (ESG) practices disclosure and firm value in the Egyptian context. This is done through investigating the influence of being listed and ranked in the Egyptian Corporate Responsibility Index on firm value during the period starting from 2007 to 2016.Design/methodology/approachUsing univariate and multivariate analyses, the findings support the economic benefits of ESG disclosures.FindingsThe authors find that firms listed in the ESG index have higher firm value, and that there is a positive association between firms’ higher rankings in the index and firm value, as measured by Tobin’sq.Research limitations/implicationsThe findings provide feedback to regulators and standard-setters in the developing countries, and more specifically the Egyptian regulators, on the benefits associated with the introduction of the sustainability index (Standard & Poor’s (S&P)/EGX ESG index). This, in turn, clarifies how the government’s efforts to promote ESG provide benefits to publicly traded firms.Practical implicationsBy linking ESG to firm value, the ESG index will enable investors to take a leading role in inducing firms to enhance transparency and disclosure, and hence, improving their reporting standards. This, in turn, will ultimately result in improving sustainability and governance practices in Egypt.Social implicationsThe reported positive market reactions to social and governance practices disclosures can motivate firms to improve their social and governance performance.Originality/valueThe study contributes to the literature by addressing the combined economic effects of social and governance disclosures on firm value, and by investigating the economic effects of such disclosures on firm value in an emerging market.
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Aboud, Ahmed, and Ahmed Diab. "The financial and market consequences of environmental, social and governance ratings." Sustainability Accounting, Management and Policy Journal 10, no. 3 (July 1, 2019): 498–520. http://dx.doi.org/10.1108/sampj-06-2018-0167.
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Purpose This study aims to examine the combined impact of environmental, social and governance (ESG) ratings on the market and financial performance of Egyptian companies during the period from 2007 to 2016 and, thereby, determines the influence of the recent political revolutions –that broke out in the MENA region in early 2011 – on the association between ESG practices and corporate performance. Design/methodology/approach The present work uses data from the S&P/EGX ESG index, which is the first of its kind in the MENA region. The ESG index is designed to increase the profile of companies listed on the Egyptian Exchange and is expected to boost the level and quality of ESG practices in the Egyptian context. The sample includes the 100 most active Egyptian companies in the Egyptian Stock Exchange as measured by the EGX 100 index in the financial year that ended in 2016. The sample begins in 2007, concurrent with the start of the ESG index, and ends in 2016. The period from 2007 to 2010 represents the pre-revolution period, and the period from 2012 to 2016 is the post-revolution period. Findings Firms with high ESG ratings are found to enjoy a better financial and market performance. The authors found some evidence that the influence of ESG ratings on financial performance is more obvious after the revolutions than before the revolutions. Practical implications This study provides insights regarding the impact of political events on the market in the Middle East region. Despite its increasing economic and political importance, this region still suffers from inadequate attention in the literature. The present work investigates the variances that evolved out of the events that started in early 2011 and the implications of these events on the market. The results of this study have implications for regulators and investors in the Egyptian stock market. The authors believe that the relatively new S&P/EGX ESG index provides a way to enhance ESG ratings in Egypt. Social implications The results of the present study provide insights for policymakers regarding the usefulness of the sustainability indices. Originality/value The present results contribute to the growing literature on the economic consequences of ESG ratings, especially in relation to a context characterized by intense political/revolutionary changes. In particular, this study contributes to the few works that have addressed the economic implications of ESG ratings in emerging markets.
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Sharipuddin, Syaza Laili, Nur Aeisya Firrzana Mohd Ayub, Nur Aqilla Mahassan, and Memiyanty Abdul Rahim. "Do Environmental, Social and Governance (ESG) Disclosures Affect Islamic Banks Financial." 12th GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES 12, no. 1 (October 8, 2021): 89. http://dx.doi.org/10.35609/gcbssproceeding.2021.12(89).
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Currently, businesses are very vulnerable and exposed to the uncertainty that may cause damage to the company. With the ongoing pandemic issue, companies are more concerned about their performance and survival. Companies like banks play a crucial role in the economy since its growth depends on its financial sector's stability regardless of the country. Thus, companies have many approaches and strategies to maintain their business and stay relevant in the corporate world; hence, ESG disclosure comes in handy. According to the Bursa Malaysia Sustainability Reporting Guide (2018), ESG which stands for "Environmental, Social, and Governance" is a term used extensively, specifically by the investment community, portraying the environmental, social, and governance matters considered by investors in the corporate behaviour context. Experts have actively discussed ESG disclosure to address such reporting to enhance the company's performance portfolio. Furthermore, the ESG factor becomes one of the primary considerations for the investors' decision. ESG factor influences and strengthens the investors' confidence towards the company's performance. Bukhari, Hashim and Amran (2020) suggested that companies providing ESG disclosure show improvement in their financial performance. Experts found a significant impact of sustainability practices on the Islamic banks' financial performance (Jan, Marimuthu & Isa, 2019). Companies' ESG disclosure performance has established a reputation for playing a significant role in financial transparency and how it varies by economic and stakeholder's perspective (Oncioiu, Popescu, Aviana, Serban, Rotaru, Petrescu & Pantelescu, 2020). Jan et al. (2019) found that there is still a low adoption level of sustainability practices and reporting in the Islamic banking industry. An empirical study conducted by Nobanee and Ellili (2016) also stated that sustainability disclosure has an insignificant effect on Islamic banks than the high degree of such disclosure on conventional banks. Moreover, from a study conducted in seven Muslim countries, the sustainability practices and reporting were not of serious concern to those countries' Islamic banks (Hassan and Syafri Harahap, 2010). Keywords: Environment, Social, Governance (ESG) Disclosure, Islamic Banks, and Financial Performance.
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Uddin Ahmed, Sarwar, Samiul Parvez Ahmed, and Ikramul Hasan. "Why banks should consider ESG risk factors in bank lending?" Banks and Bank Systems 13, no. 3 (August 10, 2018): 71–80. http://dx.doi.org/10.21511/bbs.13(3).2018.07.
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Why banks should be concerned about incorporating environmental, social and governance (ESG) criteria in the lending process? What is the motivation? This study aims to find the motives for considering environmental, social and governance (ESG) criteria in bank lending process. A primary survey has been conducted to know the current status and motivation for incorporating ESG factors in investment decisions. Sample comprised 30 private commercial banks (PCBs) operating in Bangladesh. Data collected were analyzed with graphs, descriptive statistics, and regression analysis. Findings of the study indicate that banks are mostly considering basic environmental, social and governance factors set by regulators qualitatively. They are lagging behind in considering the advanced ESG criteria needed for sustainable and efficient credit risk management. Based on motivation for incorporating ESG factors, it was found that banks pioneering in incorporating ESG factors in lending decisions are compensated through better financial performance. Findings of the study are expected to encourage practitioners and policy-makers to take more pragmatic steps to incorporate ESG risk factors quantitatively in lending decision-making process.
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Tamimi, Nabil, and Rose Sebastianelli. "Transparency among S&P 500 companies: an analysis of ESG disclosure scores." Management Decision 55, no. 8 (September 18, 2017): 1660–80. http://dx.doi.org/10.1108/md-01-2017-0018.
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Purpose The purpose of this paper is to explore the state of S&P 500 companies’ transparency by analyzing their Bloomberg ESG (Environmental-Social-Governance) disclosure scores. Additionally, the effects of industry sector, firm size, and governance practices on transparency are examined. Design/methodology/approach Data were retrieved from Bloomberg using the financial analysis environmental, social and governance function for companies comprising the S&P 500 index. Descriptive statistics are provided on each of the three components separately (ESG). Nonparametric procedures are used to test for significant differences in transparency within each of these three areas based on industry sector. Additionally, nonparametric tests are used to determine the impact of firm size (market capitalization) and governance factors (board size, board gender diversity, chief executive officer (CEO) duality, and linking executive compensation to ESG disclosure) on the composite ESG score. Findings Descriptive statistics reveal that S&P 500 companies differ in their level of disclosure across the three areas (ESG). The highest level of transparency is found on Governance and the lowest on Environmental. Moreover, there is much variability in the percentage of S&P 500 companies disclosing information about specific Social policies (e.g. child labor). Significant differences in transparency on both the Social and Governance dimensions are found between certain industry sectors. The results also reveal that large-cap companies have significantly higher ESG disclosure scores than mid-cap companies and that governance factors impact ESG disclosure. Significantly, higher ESG disclosure scores are observed for S&P 500 firms with larger boards of directors, with boards that are more gender diverse, that allow CEO duality, and that link executive compensation to ESG scores. Originality/value This study focuses on corporate transparency through a granular analysis of ESG disclosure scores when most other studies have been primarily conducted at the macro level. Stakeholders, analysts, and shareholders are increasingly scrutinizing firms’ sustainability disclosures in their assessment of management quality, as it reflects on the practices/policies that are employed to improve firms’ environmental and social footprints.
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Alsayegh, Maha Faisal, Rashidah Abdul Rahman, and Saeid Homayoun. "Corporate Economic, Environmental, and Social Sustainability Performance Transformation through ESG Disclosure." Sustainability 12, no. 9 (May 11, 2020): 3910. http://dx.doi.org/10.3390/su12093910.
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Within the environmental, social, and governance (ESG) disclosure–corporate sustainability performance (economic, environmental and social; EES) framework, our empirical analysis examined the impact of ESG information disclosure on EES sustainability performance among Asian firms from 2005 to 2017. The positive ESG disclosure–EES sustainability performance relationship found in this study provides evidence that disclosing the implementation of environment and social strategies within an effective system of corporate governance in the organization strengthens corporate sustainability performance. The results also show that environmental performance and social performance are significantly positively related to economic sustainable performance, indicating that the corporation’s economic value and creating value for society are interdependent. In line with the stakeholder theory and the shared value theory, ESG information disclosure to all stakeholders is an important factor in creating a competitive advantage for enhancing corporate sustainability performance.
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Teng, Xiaodong, Yanzhi Wang, Aiguo Wang, Bao-Guang Chang, and Kun-Shan Wu. "Environmental, Social, Governance Risk and Corporate Sustainable Growth Nexus: Quantile Regression Approach." International Journal of Environmental Research and Public Health 18, no. 20 (October 15, 2021): 10865. http://dx.doi.org/10.3390/ijerph182010865.
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Despite a huge body of literature revealing that the effect of environmental, social and governance (ESG) scores on a firms’ financial performance and value, it lacks the empirical research on the nexus between corporate sustainable growth and ESG risk in the existing research. The paper aims to examine the nexus between ESG risk and corporate sustainable growth. This study utilizes a quantile regression approach to explore how ESG risk affects corporate sustainable growth (proxied by sustainable growth rate, SGR). The ordinary least squares estimation results confirm that ESG significantly negatively affects corporate sustainable growth. The quantile regression results reveal ESG risk has a significant negative effect on corporate sustainable growth in the upper quantiles of SGR, but not in the lower and median quantiles. The results show that the impact of ESG risk on the corporate sustainable growth is asymmetric and affected by the distribution of SGR. Furthermore, the research results identify that the negative relationship between ESG risk and corporate sustainable growth is particularly apparent for firms in environmentally sensitive industries. This study greatly contributes to existing literature, as with this detailed knowledge, managers can make decisions based on these associations and identify the most lucrative course of action.
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Pirtea, Marilen Gabriel, Gratiela Georgiana Noja, Mirela Cristea, and Mirela Panait. "Interplay between environmental, social and governance coordinates and the financial performance of agricultural companies." Agricultural Economics (Zemědělská ekonomika) 67, No. 12 (December 14, 2021): 479–90. http://dx.doi.org/10.17221/286/2021-agricecon.
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On the complex framing of the agricultural fields, related to the corporate social responsibility (CSR), the general objective of this paper is to assess the impacts of environmental, social and governance (ESG) credentials of CSR and human capital features on the financial performance of agricultural companies. The data consists of a sample of 412 public companies from the Thomson Reuters Eikon database, with data for 2020, operating in 17 agricultural areas with headquarters allocated around the world. The methodological endeavor embeds two econometric procedures, multifactorial models of robust regression and structural equation modelling (SEM). The research results bring new evidence to underline the risks related to the sustainability of the financial performance of agricultural companies and the decisive role played by the ESG dimensions to counteract these risks, particularly by the environmental pillar, along with CSR specific strategies and human capital characteristics (management board and employees). We propose several strategies for companies operating in agricultural fields in order to enhance profitability by CSR measures.
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Linnenluecke, Martina K. "Environmental, social and governance (ESG) performance in the context of multinational business research." Multinational Business Review 30, no. 1 (February 3, 2022): 1–16. http://dx.doi.org/10.1108/mbr-11-2021-0148.
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Purpose This paper aims to examine the state of research on environmental, social and governance (ESG) performance in the context of multinational business research. This paper discusses research progress as well as various issues and complexities associated with using ESG ratings in cross-country studies and for assessing the performance of multinational enterprises (MNE) and emerging market multinationals (EMNEs). Design/methodology/approach The paper identifies emerging literature that focuses on tracking the development and uptake of ESG ratings in the international context. It discusses three emerging research streams: Research examining the ESG-financial performance relationship in emerging markets, research tracking the ESG performance of multinationals in the various countries and regions they are operating, and frameworks for assessing ESG-related risks on a country level. Findings While the emerging body of work adds an important dimension to the identification and awareness of ESG issues globally, numerous unresolved issues become evident. ESG frameworks have been built to assess corporate sustainability as it relates to firms in their “home” countries (typically with a focus on developed countries), with limited applicability and transferability to emerging markets. International firm activities are often not captured in detail and not comprehensively mapped across firm subsidiaries and a firm’s corporate supply chain where ESG issues are prone to happen, and ESG scores do not comprehensively integrate views and voices from various local stakeholders that are impacted by firm activities, particularly indigenous communities. Research limitations/implications Research on ESG ratings in the context of multinational business research is generally sparse and fragmented, thus creating opportunities for future research to expand on existing and emerging findings. Practical implications The paper creates awareness of issues to consider when using ESG ratings in cross-country studies and for assessing the ESG performance of MNEs and EMNEs: ESG scores can be subject to bias and are not weighted by materiality, which can be misleading for portfolio construction and performance measurement purposes. Managers need to be aware that ESG scores are often not capturing ESG issues occurring in supply chains and ESG issues affecting local communities. Originality/value This study enriches the understanding of ESG in the context of multinational business research practice.
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Sultana, Sayema, Norhayah Zulkifli, and Dalilawati Zainal. "Environmental, Social and Governance (ESG) and Investment Decision in Bangladesh." Sustainability 10, no. 6 (June 1, 2018): 1831. http://dx.doi.org/10.3390/su10061831.
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Senadheera, Sachini Supunsala, Piumi Amasha Withana, Pavani Dulanja Dissanayake, Binoy Sarkar, Shauhrat S. Chopra, Jay Hyuk Rhee, and Yong Sik Ok. "Scoring environment pillar in environmental, social, and governance (ESG) assessment." Sustainable Environment 7, no. 1 (January 1, 2021): 1960097. http://dx.doi.org/10.1080/27658511.2021.1960097.
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Zumente, Ilze, and Jūlija Bistrova. "Do Baltic investors care about environmental, social and governance (ESG)?" Entrepreneurship and Sustainability Issues 8, no. 4 (June 30, 2021): 349–62. http://dx.doi.org/10.9770/jesi.2021.8.4(20).
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Hammami, Ahmad, and Mohammad Hendijani Zadeh. "Audit quality, media coverage, environmental, social, and governance disclosure and firm investment efficiency." International Journal of Accounting & Information Management 28, no. 1 (December 12, 2019): 45–72. http://dx.doi.org/10.1108/ijaim-03-2019-0041.
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Purpose The purpose of this study is twofold: first, to introduce two determinants of environmental, social and governance (ESG) disclosure transparency, namely, audit quality and public media exposure; and second, to investigate the impact of ESG transparency on firm-level investment efficiency. Design/methodology/approach Ordinary least square (OLS) regressions are applied to explore the relationship between the two variables of interest (audit quality and public media exposure) and ESG transparency on a sample of publicly listed Canadian firms during the period 2008 to 2017. Then, an econometric model is used to investigate the association between ESG transparency and investment efficiency under two identified scenarios, under-investment and over-investment. Findings Results show that audit quality and public media exposure are two main drivers of ESG transparency, hence, commitment to high-quality audits and exposure to high public media coverage drive firms to disclose more extensive and transparent ESG information. The authors also find a negative association between ESG transparency and firm-level investment inefficiency. Thus, ESG transparency generates influential incremental information that helps mitigate the information asymmetry between firms and stakeholders while fostering better resource allocation through investment efficiency. Originality/value This study contributes to the corporate social responsibility (CSR) and ESG literature by identifying audit quality and public media exposure as two determinants of ESG transparency; and by noting that higher ESG transparency has a significant economic effect on capital investment decisions through higher firm-level investment efficiency.
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Li, Jun, and Di (Andrew) Wu. "Do Corporate Social Responsibility Engagements Lead to Real Environmental, Social, and Governance Impact?" Management Science 66, no. 6 (June 2020): 2564–88. http://dx.doi.org/10.1287/mnsc.2019.3324.
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We construct an event-based outcome measure of firm-level environmental, social, and governance (ESG) impact for public and private firms globally from 2007 to 2015 using data from RepRisk. Then we measure the societal impact of corporate social responsibility (CSR) engagements using participation in the United Nations Global Compact (UNGC) as a proxy. We demonstrate a robust and striking difference between public and private firms: whereas private firms significantly reduce their negative ESG incident levels after UNGC engagements, public firms fail to do so and are more likely to engage in decoupled CSR actions—actions with no subsequent real impact. We then conduct a series of in-depth analyses to examine possible economic mechanisms. Our results are most consistent with shareholder–stakeholder conflicts of interest being the main moderator of decoupling. The intensity of this conflict is further moderated by three factors: ownership type, proximity to final consumers on the value chain, and specific ESG incident types. Other possible mechanisms, such as selective entry into UNGC and heterogeneities in media exposure, country representation, and entry timing, do not survive our analysis. Our results suggest that existing CSR engagements and one-size-fits-all CSR policy mandates might not necessarily lead to better societal outcomes, and a multi-tiered policy targeting different ownership and industry types might be more efficient at maximizing ex post ESG benefits.
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Gutiérrez-Ponce, Herenia, Julián Chamizo-González, and Núria Arimany-Serrat. "Spanish companies’ website communication of environmental, social, and governance information." Communication & Society 34, no. 4 (October 5, 2021): 117–33. http://dx.doi.org/10.15581/003.34.4.117-133.
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This study’s goal is to analyze the website communication of environmental, social, and governance –Environmental Social Governance (ESG)– information by companies on the Madrid Stock Exchange. The empirical descriptive and inferential analysis determines IBEX35 companies’ regulatory compliance in disclosure of non-financial information through examination of their website disclosure of ESG information. Economic-financial information from the Iberian Balance Sheet Analysis System (Sistema de Análisis de Balances Ibéricos (SABI)) database was also used to investigate whether the firms that communicate this information better are also more economically efficient. The study results reveal that IBEX35 companies’ website disclosure provides heterogeneous information that is difficult to access and that they need to improve website transparency by communicating sound, sustainable non-financial reports. Further, a significant correlation was found between the companies that disclose the most ESG information and those that have the highest economic profitability –that is, those that are best adapted to the Spanish legal system and compatible with the challenges established by the UN’s Agenda 2030.
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Gutiérrez-Ponce, Herenia, Julián Chamizo-González, and Núria Arimany-Serrat. "Spanish companies’ website communication of environmental, social, and governance information." Communication & Society 34, no. 4 (October 5, 2021): 117–33. http://dx.doi.org/10.15581/003.34.4.117-133.
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This study’s goal is to analyze the website communication of environmental, social, and governance –Environmental Social Governance (ESG)– information by companies on the Madrid Stock Exchange. The empirical descriptive and inferential analysis determines IBEX35 companies’ regulatory compliance in disclosure of non-financial information through examination of their website disclosure of ESG information. Economic-financial information from the Iberian Balance Sheet Analysis System (Sistema de Análisis de Balances Ibéricos (SABI)) database was also used to investigate whether the firms that communicate this information better are also more economically efficient. The study results reveal that IBEX35 companies’ website disclosure provides heterogeneous information that is difficult to access and that they need to improve website transparency by communicating sound, sustainable non-financial reports. Further, a significant correlation was found between the companies that disclose the most ESG information and those that have the highest economic profitability –that is, those that are best adapted to the Spanish legal system and compatible with the challenges established by the UN’s Agenda 2030.
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Jasni, Nur Syuhada, Haslinda Yusoff, Mustaffa Mohamed Zain, Noreena Md Yusoff, and Nor Syafinaz Shaffee. "Business strategy for environmental social governance practices: evidence from telecommunication companies in Malaysia." Social Responsibility Journal 16, no. 2 (April 18, 2019): 271–89. http://dx.doi.org/10.1108/srj-03-2017-0047.
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Purpose The present digital era has integrated the conventional telecommunications companies as service providers in this ever-competitive environment. Towards gaining business competitiveness, businesses are operated from the stance of dynamic business model that places focus on both economic activities and, more importantly, value-added benefits. One essential value embedded into business strategies refers to the aspect of sustainability in conjunction to environmental social governance (ESG). Within the context of Malaysia, ESG practices have been expected to grow rapidly in years to come, along with the vision of becoming a digital economy nation, by 2050. The continuous discussions appear to support the significance of implementing ESG practices amidst organizations, which in turn, could enhance a more sustainable economic growth for the country. Although many studies have probed into the dimensions of ESG, little attention has been given to the ESG practices incorporated into business strategy agenda. Design/methodology/approach This paper combed through the literature to retrieve the multi-dimensions of ESG concepts, as well as related in-depth insights into ESG disclosures amongst leading companies established in Malaysia. As for the research design, this study used the content analysis method and the ESG Grid as the benchmarking tool to explore superior commitments amongst its peers. Findings As a result, this study stumbled upon two major outcomes: the pattern of ESG disclosures in telecommunications industry and the approaches in implementing ESG practices in telecommunications companies. These two aspects appear essential to establish a competitive advantage, apart from addressing the issues raised by concerned stakeholders. Research limitations/implications Future studies may explore deeper into comprehending the ESG practices by using the interview method and incorporating other industry or arena. Practical implications The decisions made by the companies to invest in ESG practices mark the ability of a company in devising viable survival strategies within the industry. Originality/value Hence, this study offers several vital insights into the practical value to learn from the best experiences, aside from analyzing the current progress of ESG practices within the context of developing nation.
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Zahroh, Barraq Mellina, and Hersugondo Hersugondo. "The Effect of ESG Performance on The Financial Performance of Manufacturing Companies Listed in The Indonesian." AFEBI Management and Business Review 6, no. 2 (December 31, 2021): 129. http://dx.doi.org/10.47312/ambr.v6i2.475.
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<p>This study was conducted to analyze the effect of environmental, social, and governance (environmental, social, and governance (ESG) performance on the company's financial performance. The company's financial performance is proxied by using Return On Assets. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange in the 2015-2019 period. The sampling technique used purposive sampling to obtain a total of 13 manufacturing companies whose annual reports were published on idx.co.id and disclosed environmental, social, and governance scores on Bloomberg. The analytical method used is panel data regression using the E-views 9 program. The results of this study indicate that social performance, governance performance and ESG performance have a positive and significant effect on the company's financial performance while environmental performance has a negative and insignificant effect on the company's financial performance.</p><p><strong>Keywords:</strong> Environmental Performance, Social Performance, Governance Performance, ESG Performance, Financial Performance.</p>
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Kim, Sang, and Zhichuan (Frank) Li. "Understanding the Impact of ESG Practices in Corporate Finance." Sustainability 13, no. 7 (March 27, 2021): 3746. http://dx.doi.org/10.3390/su13073746.
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This study examines the relationship between environmental, social, and governance (ESG) factors and corporate financial performance. Specifically, we study various individual ESG categories, both ESG strengths and concerns, and aggregate ESG factor and their impact on corporate financial performance including profitability and financial risk. We find a positive effect of ESG factors on corporate profitability, and the effect is more pronounced for larger firms. Among different ESG categories, corporate governance has the most significant impact, particularly for firms with weak governance. We also find that ESG variables generally have a positive influence on credit rating. In particular, the social factor has the most significant impact on credit rating, while environmental score surprisingly has a negative effect. Overall, this research provides a rationale for ESG integration in the context of investment management and portfolio construction to maximize value and minimize risk.
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Cristea, Mirela, Graţiela Georgiana Noja, Eleftherios Thalassinos, Daniel Cîrciumaru, Constantin Ștefan Ponea, and Carmen Claudia Durău. "Environmental, Social and Governance Credentials of Agricultural Companies—The Interplay with Company Size." Resources 11, no. 3 (March 11, 2022): 30. http://dx.doi.org/10.3390/resources11030030.
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Based on the significance of the corporate social responsibility (CSR) activities, respectively, the Environmental, Social and Governance (ESG) measures, for companies’ advancement in the fields of agriculture, the purpose of our study is to appraise how the ESG measures influence the size of public companies from the agricultural sectors, with particular attention on the environmental pillar. The research methodology consists in applying two econometric procedures to assess the direct effects of the ESG activities on the size of public agricultural firms by models of robust regression (RREG) and to appraise global implications of ESG measures on companies’ dimension by models of structural equations (SEM). Data encloses the ESG indicators, focusing on environmental indicators and agricultural companies’ size (proxied by total assets), extracted from the Thomson Reuters Refinitiv Eikon database for the fiscal year 2020. Main results reveal that several components of the ESG measures, especially the environmental ones, may influence the size of the agricultural companies, given the significant companies’ strengths in implementing CSR actions to ensure sustainable resource management. We propose adequate strategies for companies to provide robust resource management and proper integration of the environmental credentials.
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Ramadhani, Dita. "Understanding Environment, Social and Governance (ESG) Factors as Path Toward ASEAN Sustainable Finance." Asia Pacific Management and Business Application 007, no. 03 (April 29, 2019): 147–62. http://dx.doi.org/10.21776/ub.apmba.2019.007.03.2.
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Yordudom, Thanyaorn, and Muttanachai Suttipun. "The Influence of ESG Disclosures on Firm Value in Thailand." GATR Journal of Finance and Banking Review VOL. 5 (3) OCT-DEC. 2020 5, no. 3 (December 22, 2020): 108–14. http://dx.doi.org/10.35609/jfbr.2020.5.3(5).
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Objective – The study aimed (1) to investigate the extent and level of environmental, social and governance (ESG) disclosures of listed companies in Thailand Sustainable Investment (THSI) group from the Stock Exchange of Thailand (SET), and (2) to examine the influence of ESG disclosures on firm value. Methodology/Technique – Population and samples were 60 listed companies in THSI group from the SET. Content analysis by word counting was used to quantify the extent and level of ESG disclosures in corporate annual reporting during 2015 to 2019, while firm value was collected by the market price. Descriptive analysis, correlation matrix, and multiple regression were used to analyze the data from the SET. Findings – As the results, the extent and level of environmental, social, and governance disclosures were 309.91, 1196.12, and 1197.84 average words. The most common ESG disclosure was governance disclosure following by social and environmental disclosures. Moreover, the study found the positive influence of environmental and social disclosures on firm value, while there was a negative influence of governance disclosure on firm value. Novelty – This study is the first THSI group study of ESG disclosure in Thailand. Type of Paper: Empirical Keywords: ESG Disclosures; Firm Value; Thailand. Reference to this paper should be made as follows: Yordudom, T; Suttipun, M. (2020). The Influence of ESG Disclosures on Firm Value in Thailand, J. Fin. Bank. Review, 5 (3): 108 – 114. https://doi.org/10.35609/jfbr.2020.5.3(5) JEL Classification: M40, M41, M48.
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Harjoto, Maretno Agus, and Yan Wang. "Board of directors network centrality and environmental, social and governance (ESG) performance." Corporate Governance: The International Journal of Business in Society 20, no. 6 (June 23, 2020): 965–85. http://dx.doi.org/10.1108/cg-10-2019-0306.
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Purpose Drawing from social capital, social network theory of stakeholder influence and stakeholder management, the purpose of this paper is to examine the relationship between board network centrality and firms’ environmental, social and governance (ESG) performance. Design/methodology/approach Using social network analysis, the authors construct five board network centrality, namely, degree centrality (the number of connections), closeness centrality (distance among firms), eigenvector centrality (the quality of connections), betweenness centrality (how often a firm sits between two other firms) and the information centrality (the speed and reliability of information), as measures of board access for social capital and timely information. Findings Using a sample of non-financial firms listed in the UK FTSE 350 index from 2007 to 2018, the authors find that board networks, measured by degree, closeness, eigenvector, betweenness and information centrality, has positive influence on firms’ ESG performance. Furthermore, the findings show that there is a non-linear relationship between board networks and ESG performance, and this relationship is stronger in the sectors where firms that have high product market concentration and high percentage of women board members. Originality/value This study unveils that strong board network centrality brings higher social (reputational) capital and information advantages to the firm to effectively, timely and accurately deal with the pressures from stakeholders (stakeholder management), which leads to better ESG performance.
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Gholami, Amir, John Sands, and Habib Ur Rahman. "Environmental, Social and Governance Disclosure and Value Generation: Is the Financial Industry Different?" Sustainability 14, no. 5 (February 24, 2022): 2647. http://dx.doi.org/10.3390/su14052647.
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This study investigates the relationship between corporate environmental, social and governance (ESG) performance disclosure and profitability, highlighting the significant differences between the financial and non-financial sectors. This study uses an extensive Australian sample during the 2007–2017 period from Bloomberg’s database. A panel regression model is used to evaluate the association between the corporate ESG performance disclosure and profitability to conduct an industry analysis. The robustness of the results is rigorously assessed using several robustness tests to evaluate the methodological, sample selection, endogeneity and causality issues associated with corporate ESG performance disclosure. This study finds that higher corporate ESG performance disclosure is associated with higher company profitability. However, the industry comparison analysis shows significant differences between financial and non-financial industries. This study finds that for companies operating in non-financial sectors, except for corporate governance, there is no significant association between corporate environmental and social elements and a company’s profitability. Therefore, this study has implications for regulators and corporations. The empirical results of this study show that improving corporate ESG performance disclosure is beneficial to shareholders and other stakeholders in the long run. However, the enforcement of environmentally and socially responsible conduct improves profitability only in the financial industry. This study recommends that the regulators create a conducive institutional environment to promote ESG performance in the financial industry. Therefore, it enhances ESG awareness for the borrowers as well as helps economic development.
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Srivisal, Narapong, Natthawat Jamprasert, Jananya Sthienchoak, and Pornpitchaya Kuwalairat. "Environmental, social and governance and creditworthiness: Two contrary evidence from major Asian markets." Asian Academy of Management Journal of Accounting and Finance 17, no. 2 (December 10, 2021): 161–87. http://dx.doi.org/10.21315/aamjaf2021.17.2.7.
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Assets managed under sustainable investment criteria have been massively growing during the recent years. Among the criteria, environmental, social and governance (ESG) score leads the group as an important indicator of non-financial quality of a firm, which may reflect value to investors either through higher expected profit or lower risk. In this paper, we focus on the latter by exploring whether ESG score has linkage to the credit rating of firms due to the risk mitigation effect. Ordered logistic regressions are applied on a panel dataset of listed companies in Shanghai Stock Exchange and Tokyo Stock Exchange from 2009 to 2018. The results suggest that only in Japan, having ESG coverage is greatly associated with being awarded higher credit rating. However, only the environmental and governance pillars positively link to the Japanese firms’ credit ratings, while the social pillar shows negative correlation. The finding of heterogeneous effects translates to an important implication that investment in ESG should be taken with care as the impact of ESG may depend on different nature or culture of markets.
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Shaikh, Imlak. "ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) PRACTICE AND FIRM PERFORMANCE: AN INTERNATIONAL EVIDENCE." Journal of Business Economics and Management 23, no. 1 (January 28, 2022): 218–37. http://dx.doi.org/10.3846/jbem.2022.16202.
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This article attempts to bring quantitative evidence of a firm’s sustainability reporting in terms of non-financial voluntary disclosures. The disclosures are made available through the annual report and Corporate Social Responsibility (CSR) and Global Reporting Initiatives (GRI) report. ESG score is a quantitative measure developed and disseminated by Bloomberg, covering about 120 Environmental, Social, and Governance aspects. The study’s research problem is to examine the effects of non-market transnational sustainability strategy on firm performance. The study presents an analysis of nearly 510 firm’s ESG scores across 17 countries for 2010–2018. The descriptive and inductive statistical analysis shows that ESG compliance is more pronounced in European companies. Simultaneously, Asian firms are more disciplined concerning the energy sector, and the Asiapacific counterpart is more inclined toward technology firms. The study shows that GRI and nonGRI companies differ significantly in their accounting performance (ROA and ROE) and market valuations (Tobin’s-Q). The environmental dimension appears intimidating across accounting and market-based firm performance, while the social dimension contributes adversely, and governance positively affects operational efficiency.
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Kocmanová, Alena, and Iveta Šimberová. "DETERMINATION OF ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE INDICATORS: FRAMEWORK IN THE MEASUREMENT OF SUSTAINABLE PERFORMANCE." Journal of Business Economics and Management 15, no. 5 (November 27, 2014): 1017–33. http://dx.doi.org/10.3846/16111699.2013.791637.
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The article is concerned with determination of environmental, social and corporate governance (ESG) indicators of performance. The objective of carried-out empirical research is to determine ESG indicators as a key framework of the measurement of sustainable performance of a company in its Sustainable Reporting. On the basis of conducted empirical research, applying factor analysis, the environmental, social and corporate governance indicators for companies active in the processing industries CZ-NACE have been specified. The indicators were selected in a series of successive phases by a multi-factor analysis. The results of factor analysis indicated that the factors fall into three measurement categories: environmental (Investments, Emissions, Source Consumption, Waste), social (Society, Human Rights, Labour Practices and Decent Work, Product Responsibility), and corporate governance (Monitoring and Reporting, Corporate Governance Effectiveness, Corporate Governance Structure, Compliance). This article contributes to the effort to solve measurement of performance of the corporate sustainability and proposal to conceptual framework of ESG indicators of performance for the Sustainability Reporting of Czech companies operating in the processing industry.
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Gutiérrez-Ponce, Herenia, Julian Chamizo-González, and Nuria Arimany-Serrat. "Disclosure of Environmental, Social, and Corporate Governance Information by Spanish Companies: A Compliance Analysis." Sustainability 14, no. 6 (March 10, 2022): 3254. http://dx.doi.org/10.3390/su14063254.
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The transposition of Directive 2014/95/EU to Spain through Law 11/2018 of December 28 requires companies to publish information on the impact of their environmental, social, and governance activities (ESG information) in management reports or in a “non-financial statement.” This study aims to assess the readiness of IBEX35 companies to submit ESG reports through their communication and web transparency and to determine whether such ESG information is related to these companies’ financial indicators. The study is pioneering in the analysis of the transparency of non-financial information on the websites of companies listed on the main Spanish stock market index (IBEX 35). It uses exploratory and descriptive analysis to determine whether the companies with the best economic efficiency indicators are also the most transparent in non-financial indicators (ESG) and to what extent these relationships explain the dependency between the two. The findings reveal that IBEX35 companies need to improve their web transparency by presenting solid non-financial reports with ESG sustainability parameters. The results show that companies with economic profitability in Return on Assets that use their debt levels wisely disclose higher levels of ESG information. In other words, financial performance and indebtedness contribute to improving levels of ESG disclosure on the IBEX35. Companies must also improve accessibility to ESG information, update it, and classify it in accordance with current regulations.
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Muhmad, Siti Nurain, Akmalia M. Ariff, Norakma Abd Majid, and Khairul Anuar Kamarudin. "Product Market Competition, Corporate Governance and ESG." Asian Academy of Management Journal of Accounting and Finance 17, no. 1 (June 30, 2021): 63–91. http://dx.doi.org/10.21315/aamjaf2021.17.1.3.
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This paper examines whether product market competition is associated with Environmental, Social, and Corporate Governance (ESG) and whether corporate governance moderates the effect of product market competition on ESG. Analysis involving 22,897 firm-year observations from 37 countries shows that companies with higher product competition have lower ESG and those with higher corporate governance have higher ESG. The results also indicate the moderating effect of corporate governance, as the negative relationship between product market competition and ESG diminishes for companies with higher corporate governance. The results remain robust in additional analysis using alternative measures for product market competition and corporate governance. The findings support the joint effect of product market competition and corporate governance in determining corporate performance in ESG. The findings reflect the various pressures influencing ESG practices, and on how the strength of corporate governance plays a vital role in ensuring strategic ESG being employed for the sustainable performance of companies. The findings have implications on companies that want to factor ESG into their plans especially to reinvent their companies for the period that follows the COVID-19 pandemic.
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Bermejo Climent, Ramón, Isabel Figuerola-Ferretti Garrigues, Ioannis Paraskevopoulos, and Alvaro Santos. "ESG Disclosure and Portfolio Performance." Risks 9, no. 10 (September 24, 2021): 172. http://dx.doi.org/10.3390/risks9100172.
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This paper illustrates the impact of Environmental Social and Governance (ESG) disclosure on European corporate equity performance. In this study, we use an extensive data set of European ESG ratings provided by Bloomberg to demonstrate that ESG disclosure is associated with improved return growth, with the Governance pillar exhibiting the strongest effect on corporate performance. The impact of ESG disclosure on volatility is changing over time, suggesting that the existence of opaque ratings limits the transmission of information disclosure into corporate performance.
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Isachenkova, Natalia. "Disclosure of Environmental, Social and Governance (ESG) Performance and Firm Value." Academy of Management Proceedings 2012, no. 1 (July 2012): 13637. http://dx.doi.org/10.5465/ambpp.2012.13637abstract.
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Ferrell, O. C. "Addressing socio-ecological issues in marketing: environmental, social and governance (ESG)." AMS Review 11, no. 1-2 (June 2021): 140–44. http://dx.doi.org/10.1007/s13162-021-00201-3.
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Krishnamoorthy, Raghu. "Environmental, Social, and Governance (ESG) Investing: Doing Good to Do Well." Open Journal of Social Sciences 09, no. 07 (2021): 189–97. http://dx.doi.org/10.4236/jss.2021.97013.
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Ismail, Aida Maria, Zuria Hajar Mohd Adnan, Fadzlina Mohd Fahmi, Faizah Darus, and Colin Clark. "Board Capabilities and the Mediating Roles of Absorptive Capacity on Environmental Social and Governance (ESG) Practices." International Journal of Financial Research 10, no. 3 (May 19, 2019): 11. http://dx.doi.org/10.5430/ijfr.v10n3p11.
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Public listed companies in Malaysia have been pressured tremendously to accept the engagement of Environment, Social and Governance (ESG), but the engagement is still low based on previous studies. ESG will enhance company financial performance, image as well as the ability to attract and retain the workplace which contributes to the market value in the economy. This shows that ESG engagement improve company brand image and reputation, increase customer loyalty and sales as well as productivity. Corporate governance is seen to be the key role to ensure that companies engage with ESG practices since it can enhance the value creation and improve financial performance. Even the present investors are bound to look for non-financial performance elements like corporate governance and environmental, social and governance (ESG) practices that the company engaged since it is an evidence of effective corporate governance. Based on today’s global and innovation-driven economy which also include social and environmental matters consisting of welfare distribution and growth, it is said that countries need to be more efficient in finding new ways to enhance the environmental policy promoting greater change and dynamics. Thus, they must find new ways to develop an innovation policy to emphasise the knowledge-driven economy on the capacity to adapt and adopt best practices, create, diffuse and transform innovation and knowledge. The absorptive capacity will recognise the ability of the individual and company in adopting the innovation which play an essential part in determining the characteristics of good corporate governance to ensure best ESG practices in the company. This paper examines the relationship between board capabilities and ESG practices through the mediating role of absorptive capacity. Board size, board diversity and board independent are the board capabilities that the paper investigates. Collection of information and data was from company's listed in FTSE4Good Bursa Malaysia from the year 2012 to 2016. The results from the regression analysis show that ESG practices have a significant relationship with board size, board diversity, board independence and absorptive capacity. On top of that, absorptive capacity is perceived to have influence on board diversity and board independence towards ESG practices. The results provide empirical evidence and guidance in identifying areas of problems in the current policy and amend it for a better policy in promoting sustainability.
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Şeker, Yasin, and Evren Dilek Şengür. "The Impact of Environmental, Social, and Governance (ESG) Performance on Financial Reporting Quality: International Evidence." Ekonomika 100, no. 2 (November 25, 2021): 190–212. http://dx.doi.org/10.15388/ekon.2021.100.2.9.
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This study investigates the relationship between environmental, social, and governance (ESG) performance and financial reporting quality (FRQ) through the use of data from Datastream, Refinitive Eikon and ASSET4 databases. The initial sample of the study covers all available firms in ASSET4. After eliminating firms with missing data, the final sample of the study consists of 16,072 firm-year observations from 35 countries, covering the years from 2010 to 2017. Several FRQ proxies and firms’ ESG performance indicators are used in the study. The panel regression findings reveal that firms’ ESG performance has a positive impact on FRQ. In other words, it has been found that improving the ESG performance of firms yields higher FRQs. As for ESG pillars, this study finds a positive and statistically significant relationship between FRQ and environmental and governance pillars. The study extends the literature by providing international evidence not only about the aggregate effects of firms’ ESG performance on FRQ but also the effects of each of the three ESG pillars on FRQ.
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Roy, Subrata. "Impact of Environmental (E), Social (S) and Governance (G) Factors on Return Distribution." Paradigm 23, no. 1 (May 7, 2019): 20–35. http://dx.doi.org/10.1177/0971890719835629.
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The present study seeks to examine the impact of environmental, social and governance (ESG) factors on return distributions of the sustainable responsible indices (SRI). Here, four SRI indices are considered and then daily monthly return is computed for further analysis. The data period ranges are between December 1998 and March 2016. The study uses dummy variable approaches to examine the various impacts of ESG factors on return distribution depending on various situations. It is observed that ESG factors do not have any significant variation on return distribution except in few cases.
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Giannarakis, Grigoris, George Konteos, and Nikolaos Sariannidis. "Financial, governance and environmental determinants of corporate social responsible disclosure." Management Decision 52, no. 10 (November 11, 2014): 1928–51. http://dx.doi.org/10.1108/md-05-2014-0296.
Full textAbstract:
Purpose – The purpose of this paper is to investigate the vital determinants on the extent of corporate social responsibility (CSR) disclosure in a US context. The selected variables are CEO duality, the presence of women in the board, greenhouse gas (GHG) emissions, emission reduction initiatives, company's risk premium, financial leverage and industry's profile. Design/methodology/approach – The environmental, social and governance (ESG) disclosure score is used as a proxy for the extent of CSR disclosure calculated by Bloomberg. The influence of plausible variables on the ESG disclosure score and its sub-categories was examined by using the least squares dummy variable model (LSDV) incorporating 100 companies listed on Standard & Poor's 500 Index for the period 2009-2012. Findings – The results show that the emission reduction initiatives and GHG emissions influence positively the extent of ESG score. In addition, slight differences exist concerning the determinants of different types of disclosures. Furthermore, it is illustrated that a company's industrial profile seems to have differences among the extent of the different types of disclosure. Research limitations/implications – The sample of companies is based on the US companies incorporating only large-sized ones. Originality/value – The study extends previous studies with the inclusion of both traditional and innovative determinants of the CSR disclosure in USA taking into account four years of corporate data. A third party rating approach was adopted in order to calculate the extent of CSR disclosure. Finally, both the shareholders’ and the investors’ attitudes in relation to CSR disclosure are presented.