Search Results (579)

Total factor productivity serves as a critical indicator of high-quality corporate development. This study systematically examines the impact of ESG performance on TFP using panel data from Shanghai and Shenzhen A-share listed firms spanning 2009 to 2023. The findings reveal three key insights: first, corporate ESG performance significantly enhances TFP, with regression analysis demonstrating a statistically robust positive correlation (1% significance level) and high explanatory power (R² > 0.8). Second, under environmental uncertainty, ESG-driven total factor productivity improvements operate through dual mechanisms: energy conservation and resource allocation optimisation. Third, heterogeneity analysis highlights that non-state-owned enterprises exhibit a more pronounced relationship compared to state-owned counterparts, particularly in high-environmental-uncertainty scenarios. Beyond enriching academic discourse on ESG metrics, this research elucidates the intrinsic linkage between ESG practices and TFP under dynamic environmental conditions, offering actionable strategies for firms to align sustainability goals with productivity growth. For international stakeholders, this study provides empirical evidence from China—the world’s second-largest economy—to inform global ESG policy design and cross-border investment decisions, emphasising the role of institutional contexts in sustainability-driven value creation. The insights are pivotal for investors, policymakers, and multinational corporations seeking to navigate ESG complexities while advancing sustainable development goals in emerging markets. Full article

This paper employs a novel database to investigate the influence of pressure-sensitive institutional investors (PSIIs) in China on the relationship between managerial climate awareness and firms’ sustainability performance. The paper demonstrates that an increase in pressure-sensitive institutional investors shareholding strengthens the positive impact between managerial climate awareness and firms’ sustainability performance. The existence of robust commercial ties between the majority of pressure-sensitive institutional investors and listed companies enables the transmission of pressure to management teams in the form of constraints on companies’ access to capital. This ultimately promotes firms’ sustainable development. Subsequent research demonstrated that the alignment of interests and risk preferences exerts a more pronounced effect in firms characterized by high managerial ownership. Furthermore, financial support from PSIIs manifests as greater intensity in firms grappling with high financial constraints. The utilization of environmental regulations as a competitive strategy, coupled with the capacity for early implementation, serves to amplify the aforementioned positive effect, particularly in contexts where environmental regulation is minimal. Full article

Based on the perspective of systematic tail risk, this study aims to explore the impact of environmental social and governance (ESG) performance on financial performance. At the same time, it also explores the mediating effects of financing constraints, information transparency, and corporate reputation in this relationship. This study uses the data from Chinese A-share listed companies from 2009 to 2022 as samples, uses two-way fixed-effect regression to test the benchmark model and mechanism model, and conducts a series of robustness tests and heterogeneity tests. The findings show that the following: (1) ESG performance significantly reduces systematic tail risk, with individual tail risk driving this negative relationship. (2) ESG performance lowers systematic tail risk through alleviating financing constraints, improving information transparency, and enhancing corporate reputation. (3) The inhibitory effect of ESG on systematic tail risk is more pronounced in the non-state-owned, low-pollution, high-liquidity, and high-information-efficiency samples. (4) Among the three dimensions of ESG, governance (G) has the most substantial impact in reducing systematic tail risk, compared to environmental (E) and social (S). This study is the first to explore the role of ESG performance on financial performance from the perspective of systematic tai risk. At the same time, we discuss for the first time how ESG performance affects tail system risk. This study contributes to an in-depth exploration of ESG’s role in financial performance, providing insights for preventing financial risk and achieving sustainable development. Full article

Can the application of robots promote corporate sustainability? This study constructs micro-data based on robot data provided by the IFR and annual reports of China’s A-share listed companies from 2010 to 2018. By employing a multidimensional fixed effects model for empirical analysis, we arrive at the following conclusions. Firstly, the implementation of robotic technologies substantially improves the environmental, social, and governance (ESG) performance of corporations, which remains robust following a series of robustness tests (including the implementation of instrumental variables, the Heckman two-stage model, and placebo tests). Secondly, a decomposition effect analysis shows that robots positively influence the E, S, and G aspects of ESG; in addition, robotic applications primarily promote corporate ESG performance by promoting green technology innovation, boosting corporate goodwill, and enhancing internal control effectiveness. Thirdly, a heterogeneity analysis reveals that the positive effects of robotic applications on corporate ESG performance are predominantly observed in state-owned, large-scale, and technology-intensive enterprises. Additionally, the promoting effect is strongest in enterprises located in central regions, followed by the eastern regions, while the effect in the western regions is insignificant. Furthermore, the results of the quantile regression analysis reveal that robotics exerts a greater impact on firms with higher initial levels of ESG performance. These findings offer researchers a framework to identify and measure the effects of robots on corporate sustainability, thus enhancing the understanding of the relationship between robotics and corporate sustainability. Full article

This study investigates the relationship between environmental, social, and governance (ESG) performance and firm-level innovation, with a particular focus on how this relationship evolves in response to external shocks such as the COVID-19 pandemic. Using intellectual capital as a measure of innovation, the study employs Tobit regression analysis on a panel dataset of South Korean listed firms from 2013 to 2023. The findings reveal a positive association between ESG performance and firm-level innovation, which becomes statistically significant only in the post-pandemic period. A detailed examination of ESG sub-dimensions shows that environmental and social performance are positively associated with firm-level innovation exclusively in the post-pandemic period, while governance performance maintains a consistently positive relationship with innovation across both periods, becoming more pronounced after the pandemic. These findings suggest that ESG practices foster firm-level innovation and highlight the shifting dynamics of this relationship during crises such as the COVID-19 pandemic, when stakeholder engagement and networks become crucial for organizational resilience. This study provides valuable insights for various stakeholders including managers, investors, and policymakers, emphasizing the importance of integrating ESG considerations into corporate strategies to enhance innovation capacity and long-term competitiveness. Full article

Startups face significant challenges in balancing survival with sustainability, as approximately 90% of them fail. Sustainability is often perceived as a short-term cost, yet turbulent business environments—driven by climate change, environmental regulations, and evolving social expectations—are compelling startups to align their innovations with Environmental, Social, and Governance (ESG) principles. These efforts aim to attract investors, customers, and other stakeholders. Despite resource constraints and the liabilities of smallness and newness, understanding how startups leverage innovation to achieve sustainability performance is of both theoretical and practical importance, particularly within the framework of triple bottom line theory. This study empirically examines the roles of absorptive capacity, appropriability, and openness in mediating and moderating the relationship between innovation activities and sustainability performance in startups. Using data from the Korean Innovation Survey 2018—a structured tool aligned with global standards for tracking innovation activities—we analyze 278 young manufacturing firms. Regression analyses reveal that product innovation and organizational innovation are significantly associated with sustainability performance. Furthermore, absorptive capacity mediates the relationship between these types of innovation and sustainability performance. To explore the contingencies influencing these relationships, we test appropriability (measured by protection mechanisms) and openness (quantified by external partnerships). Moderated mediation analysis indicates that openness strengthens the direct relationship between product innovation and sustainability performance up to a threshold but weakens it beyond this point. Organizational innovation’s impact on sustainability performance is fully mediated by absorptive capacity, while appropriability moderates this mediation by enhancing absorptive capacity’s effectiveness when limited protection mechanisms are used. These findings contribute to sustainability research by highlighting that startups’ sustainability efforts are driven by innovation activities mediated by absorptive capacity and contingent upon specific factors such as appropriability and openness. The study confirms the paradox of openness in startup contexts pursuing triple bottom line objectives. Practically, this research provides actionable insights for corporate leaders and policymakers on fostering absorptive capacity through external knowledge acquisition while carefully managing appropriability mechanisms and collaboration strategies to enhance sustainability outcomes. Full article

Using 2010–2021 listed A-share companies as the research sample, we explore the influence of corporate ESG performance on sustainable development performance and the mechanism by which this influence occurs. The results indicate that ESG performance effectively enhances sustainable development performance. Mechanism analyses reveal that ESG performance promotes sustainable development performance through the “reputation effect” and “supervision effect”. Further analyses reveal that among the three dimensions of ESG, the social governance dimension (“S”) plays the most significant role. When environmental regulations are more stringent, green credit guidelines are stronger, internal controls are more effective, and the firm is in a growth or decline phase in its life cycle, the enhancing effect of ESG performance on sustainable development performance becomes more pronounced. Additionally, ESG performance can further enhance a company’s ability to obtain commercial credit and its overall performance. This paper enriches related research on the value effect of ESG and provides insights for listed companies, participants in the capital market, and government departments to emphasize ESG performance and improve ESG incentive policies. Full article

This qualitative study aimed to explore double materiality reporting practices and their impact and financial materiality relevance as well as the disclosure of circularity practices in connection with financial and ESG reporting in the fast fashion industry. Thematic deductive content analysis (TDCA) was performed in five steps on sustainability reports of iconic fast fashion companies, with the aim of identifying recurring disclosure themes and patterns with the help of the NVivo 14 software. The results reveal that strongly addressed topics in the reporting of double materiality are the sustainable and environmentally friendly use of resources and involvement in the community, while the least addressed is employee wellbeing. A strong positive association between double materiality assessment and resource efficiency was found, proving that the efficient use of resources significantly improves environmental performance. Also, circularity innovation shows high correlations with the assessment of environmental impact materiality and governance, highlighting the role of innovation in enhancing overall sustainability. Integrating circular practices into corporate strategies shows that companies performing very well in circularity are most likely to have higher ESG performance in the future. The integrated approach of double materiality and corporate circularity disclosure analysis is highlighted by the connectivity analysis on material financial and ESG reporting and circularity disclosure. Assessing double materiality information requires professional judgment, and mapping the sustainability aspects related to disclosure requirements requires a unitary methodology and a customized list of impact, risks, and opportunities. The study’s implications aim to improve sustainability information reporting and materiality matrix analysis but can also be extended to circular economy regulations. Full article

This study examines the relationship between Environmental, Social, and Governance (ESG) disclosures and perceived financial performance within the context of Islamic finance, with a focus on Maqasid al-Shariah—the overarching goals of Islamic law. Using a quantitative approach, the study surveyed 350 stakeholders in Saudi Arabia’s Islamic finance sector, including corporate managers, investment professionals, and financial analysts, over a six-month period (May to October 2024). The findings indicate that stakeholders perceive a positive relationship between ESG disclosures and financial performance, particularly when companies align their ESG practices with Islamic finance principles. However, the study does not measure actual financial performance; rather, it assesses stakeholders’ perceptions of ESG’s influence on corporate governance, risk management, and investment attractiveness. Results suggest that companies integrating ESG principles with Maqasid al-Shariah foster greater stakeholder trust, enhance corporate responsibility, and promote long-term sustainability. However, variations in trust and investment decisions exist based on industry type, ESG disclosure levels, and demographic factors such as experience and familiarity with ESG practices. The study provides novel insights into how Islamic finance principles shape ESG disclosure practices, offering practical recommendations for improving corporate governance and sustainability. By emphasizing transparency, ethical investment, and regulatory alignment, these findings contribute to ongoing discussions on sustainable finance and the role of ESG in shaping Islamic financial institutions. Full article

The purpose of this study is to investigate the influence of environmental disclosure and corporate governance on the financial performance of Islamic banks in Saudi Arabia. This study highlights that sustainable practices are transparent with financial objectives using the religious framework of Islamic finance. This research is based on Worldwide Vision 2030, which covers sustainable development and promotes environmental, social, and governance (ESG) principles, as well as corporate governance factors, such as board composition and Shariah Supervisory Boards (SSBs). We use a hybrid approach for our findings, with a dataset spanning 2011–2023 for the quantitative analysis and 20 semi-structured analyses conducted for a qualitative approach that aligns with objectives. We found that environmental disclosure boosts profits and stakeholder trust. Corporate governance structures, such as environmental boards and sustainability committees, improve the environmental disclosure of financial performance in Islamic banks. In this positive interaction, specialized governance drives Sharia-compliant sustainability initiatives. SSBs help Islamic banks integrate sustainability and meet religious and ESG environmental standards. Board diversity and dedication in the sustainability committee both play important roles in enhancing environmental disclosure practices; in return, these improved financial performances. The interaction of environmental disclosure and board environmental expertise has a positive impact on the overall performance, which indicates that governance structure supports sustainability-related decision-making, aligning with transparency. This study suggests that Islamic banks standardize ESG frameworks, improve board environmental expertise, and invest in real-time sustainability reporting digital solutions. Saudi Islamic banks can lead regional and global sustainable banking by adopting these strategies to align with global sustainability trends, improve financial performance, and meet ethical finance expectations. Full article

As the attention on sustainable corporate behavior intensifies, green technological innovation, as a key tool for achieving environmentally and socially sustainable development goals, has gradually become a focal point in many nations. This study investigates the impact of green technology innovation on corporate ESG performance using panel data from Chinese listed companies (2013–2022). The findings reveal that green technology innovation significantly enhances ESG outcomes, mediated by digital transformation and negatively moderated by financial constraints. The effect is particularly significant in state-owned enterprises and firms in eastern China. This research offers valuable theoretical foundations, actionable advice, and policy suggestions to assist enterprises in boosting their green transformation capabilities, refining their ESG practices, and enhancing their overall performance. Full article

This study examines whether firm managers strategically use tax avoidance to address climate risks, with a specific focus on strategies employed to reduce corporate income tax liabilities, and this study incorporates the moderating role of ESG performance and is ground in stakeholder theory to highlight the balance between sustainability and corporate profit expectations. Using the secondary data from Chinese A-listed companies during 2017–2023, the findings reveal that firms increasingly adopt tax avoidance practices in response to rising climate risks. More specifically, strong ESG performance positively moderates this relationship, underscoring its role in shaping socially and ethically responsible strategies to tackle sustainability challenges. By employing panel data analysis and addressing endogeneity through instrumental variable tests, Propensity Score Matching, and the Heckman test, this study provides robust results. These findings contribute to the literature on tax avoidance and provide practical insights for actionable ESG initiatives. For firms, these include improving transparency in tax reporting and integrating sustainability metrics into corporate ESG framework for firms. For tax authority, they involve upgrading the tax-related big data supervision system and fostering alignment between corporate practices and government policies. Full article

The carbon emissions trading policy is a key policy driving China’s low-carbon economic transition. Based on the policy environment of China’s carbon emissions trading pilot program from 2010 to 2021, this research selects representative heavy-polluting listed enterprises from this period as research subjects. Using the DID model, it investigates the impact of the carbon emissions trading policy on corporate ESG performance. The results of the research show that: (1) The carbon emissions trading policy significantly improves the ESG performance of heavy-polluting enterprises. (2) The carbon emissions trading policy enhances corporate ESG performance primarily by alleviating external financing constraints and stimulating green technological innovation within enterprises. (3) Due to differences in corporate characteristics and decision-making structures, the impact of carbon emissions trading policies on the ESG performance of heavily polluting enterprises exhibits heterogeneity. The findings of research are of great significance for a comprehensive understanding of the carbon emissions trading policy, facilitating fundamental changes in enterprises, promoting the construction of the carbon emissions trading market, and ensuring the timely achievement of the “dual carbon” goals. Full article

The construction industry is one of the most environmentally sensitive sectors, significantly impacting the adoption of sustainable development practices. Environmental, social, and governance (ESG) pillars are essential for assessing corporate sustainability performance, revealing risks, and guiding improvement. Despite the widespread use of indicators, a notable gap exists in ESG frameworks oriented to assess company performance within the sector, with limited research on achieving standard tools. This study proposes a practical standardized framework of indicators for the European construction industry and provides a set of KPIs for the Italian context, serving as a tool to measure and report ESG performance. The methodology consists of the selection of indicators from established protocols for assessing and reporting ESG criteria, such as the Global Reporting Initiative (GRI) and Global Real Estate Sustainability Benchmark (GRESB). The selection process resulted in the identification of 118 indicators, categorized into 44 environmental, 54 social, and 20 governance indicators, enabling construction companies to comprehensively measure and report their ESG performance in accordance with disclosure regulations. The result of this work serves policymakers seeking to develop standardized frameworks specific to the construction industry, for defining expert panels to evaluate mandatory disclosures from companies, and as guidance for companies who need guidelines to assess their sustainability performance and ensure compliance and alignment with existing frameworks. Full article

Corporate sustainability performance becomes the central element in many current business developments: the total value of ESG investment grows, more and more clients want to invest in projects that deliver more than the pure financial return, companies are innovating and transforming their business models, and adopting the B-Corp values. Environmental and wider societal impact becomes the central focus of the businesses that want to become the force for good. This article adopts an empirical approach and builds an ESG index of corporate performance based on eight critical metrics representing the economic, social, and environmental dimensions under varying policy priorities. Furthermore, it investigates correlations between these aggregate ESG indices and share prices as well as return on investment, or ROE, of companies. The article goes on to investigate empirically the correlation between employees/turnover, diversity, CO₂ emissions, waste generation, and water use of companies and share prices and ROE metrics, respectively. The reasons for divergence between correlations of sustainability performance indicators with share prices, ROE, and profits/turnover are discussed in detail, with particular attention drawn to the reasons why diversity might matter more for the share prices than ROE and why waste generation, water use, and CO₂ emissions might still be poorly reflected in the ROE while some of these metrics have a significant connection with the profit/turnover ratio. The article will undoubtedly be of interest to ESG fund managers, investors, corporate sustainability officers, and policymakers. Full article