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Sustainability is concerned with the impact of present actions on the ecosystems, societies, and environments of the future. Such concerns should be reflected in the strategic planning of sustainable corporations. Strategic intentions of this nature are operationalized through the adoption of a long-term focus and a more inclusive set of responsibilities focusing on ethical practices, employees, environment, and customers. A central hypothesis, that we test in this paper is that companies which attend to this set of responsibilities under the term superior sustainable practices, have higher financial performance compared to those that do not engage in such practices. The target population of this study consists of the top 100 sustainable global companies in 2008 which have been selected from a universe of 3,000 firms from the developed countries and emerging markets. We find significant higher mean sales growth, return on assets, profit before taxation, and cash flows from operations in some activity sectors of the sample companies compared to the control companies over the period of 2006-2010. Furthermore, our findings show that the higher financial performance of sustainable companies has increased and been sustained over the sample. Notwithstanding sample limitation, causal evidence reported in this paper suggests that, there is bi-directional relationship between corporate social responsibilities practices and corporate financial performance.

We analyze whether a firm’s corporate social responsibility (CSR) plays a significant role in promoting its market value in an emerging market, namely Korea. We employ environmental, social, and corporate governance (ESG) scores to evaluate CSR performances and examine their effect on firm valuation. We find that CSR practices positively and significantly affect a firm’s market, in line with previous studies on developed countries. However, its impact on share prices can differ according to firm characteristics. For firms in environmentally sensitive industries, the value-creating effect of CSR is lesser than for firms that do not belong to sensitive industries. Specifically, corporate governance practice negatively influences the firm value of environmentally sensitive firms. Further, governance practice significantly promotes market value only for chaebols, while investors do not significantly value governance practice carried out by other firms. This finding suggests the value-enhancing effects of governance structure reformation in the former. This work mainly contributes to the literature by verifying a positive CSR-valuation relationship in emerging markets, which provides substantial policy and welfare implications in markets where governments play a major role in promoting CSR. A stronger valuation effect of CSR in chaebols may present economic background for the intervention of the Korean government in the reformation of chaebol.

This article examines why global corporate social responsibility (CSR) frameworks have gained popularity in the past decade, despite their uncertain costs and benefits, and how they affect adherents' behavior. We focus on the two largest global frameworks—the United Nations Global Compact and the Global Reporting Initiative—to examine patterns of CSR adoption by governments and corporations. Drawing on institutional and political-economy theories, we develop a new analytic framework that focuses on four key environmental factors—global institutional pressure, local receptivity, foreign economic penetration, and national economic system. We propose two arguments about the relationship between stated commitment and subsequent action: decoupling due to lack of capacity and organized hypocrisy due to lack of will. Our cross-national time-series analyses show that global institutional pressure through nongovernmental linkages encourages CSR adoption, but this pressure leads to ceremonial commitment in developed countries and to substantive commitment in developing countries. Moreover, in developed countries, liberal economic policies increase ceremonial commitment, suggesting a pattern of organized hypocrisy whereby corporations in developed countries make discursive commitments without subsequent action. We also find that in developing countries, short-term trade relations exert greater influence on corporate CSR behavior than do long-term investment transactions.

Purpose This paper aims to investigate the impact of board composition on environmental, social and governance (ESG) reporting in the Gulf countries. Despite the vast literature on the significance of ESG disclosure on firms’ performance, trust and reputation, there are relatively few studies on the influence of board structure on ESG disclosure in the Gulf Cooperation Council (GCC) countries. Gulf countries are witnessing a fast growing capital markets and having serious efforts to attract foreign investments to divert their economies from the oil and gas reliance. This could be facilitated by illustrating firms’ good citizenship and communicating the fulfillment of their social obligation. Design/methodology/approach The study examines publically listed companies between 2008 and 2017. Thomson Reuter’s database is used to collect the ESG disclosure scores and governance information. The authors apply multiple panel data regressions and sensitivity testing to ensure the robustness of the results. Findings Examining publically listed companies for a 10-year period shows that higher board independence and female board participation facilitate the transmission of a firm’s positive image by improving social responsibility. Independent boards of directors and participation among women serve as catalysts to strike an effective balance between firms’ financial targets and social responsibilities. In contrast, boards chaired by chief executive officers are less supportive in executing a social agenda and consequently reporting their ESG activities. Practical implications The results suggest that firms that appoint a sustainability and/or governance committee tend to engage in more impactful social and environmental activities and communicate their societal engagements more effectively. Social implications The paper recommends that policymakers, executives and shareholders in the GCC countries support board participation among women, independent directors and formation of sustainability committees to facilitate engaging in effectual social activities. Originality/value Empirical evidence regarding the relationship between board composition and ESG disclosure in the Gulf countries is limited. Prior literature mainly provides results on developed countries in which the governance system is mature and well structured. This study provides useful evidence regarding the Gulf countries that lack privatization and where corporate boards tend to be dominated by families and governments.

Purpose - The purpose of this paper is to investigate why developing country suppliers are adopting socially sustainable practices and how the implementation process is both impeded and enabled. Design/methodology/approach - A multi-case study approach is adopted based on four ready made garment (RMG) industry suppliers in Bangladesh and the Bangladeshi buying houses of two large UK retailers. The primary mode of data collection is exploratory face-to-face interviews with 14 senior representatives. Findings are later interpreted using the transaction cost economics (TCE) theory lens. Findings - One factor motivating implementation is labour retention - a skilled labour shortage means employees will migrate to other factories if suppliers do not improve certain social standards. Barriers to implementation include a misalignment between the requirements of western codes of conduct and the cultural and socio-economic context in Bangladesh. Enablers include a shift from auditing and monitoring to more open dialogue and trust between buyers and suppliers. The paper also reveals evidence of mock compliance, e.g. suppliers keeping two sets of timesheets, and of the complexities of social sustainability. For example, while some initiatives are unanimously positive, removing child labour from RMG industry suppliers has simply diverted it to other, less regulated and more hazardous industries such as construction. Research limitations/implications - An early, exploratory contribution is provided. The work could be extended, e.g. to other stakeholders such as third-party auditors and Non-Governmental Organisations (NGOs). Practical implications - Being aware of the motivations, barriers and enablers will help multi-national corporations (MNCs) promote good practice and anticipate the challenges they are likely to face in improving the social sustainability of their supply chains. Use of TCE leads to suggesting MNCs need to move beyond immediate suppliers and incorporate tier-two suppliers in implementation efforts. Social implications - Social sustainability improvements should benefit vulnerable workers, help suppliers develop longer term relationships with MNCs, and contribute to economic growth. Originality/value - Most prior studies have been in the context of developed countries and focused on the perspective of the buying firm only.

The disparity in environmental impacts across different countries has been widely acknowledged 1 , 2 . However, ascertaining the specific responsibility within the complex interactions of economies and consumption groups remains a challenging endeavour 3 – 5 . Here, using an expenditure database that includes up to 201 consumption groups across 168 countries, we investigate the distribution of 6 environmental footprint indicators and assess the impact of specific consumption expenditures on planetary boundary transgressions. We show that 31–67% and 51–91% of the planetary boundary breaching responsibility could be attributed to the global top 10% and top 20% of consumers, respectively, from both developed and developing countries. By following an effective mitigation pathway, the global top 20% of consumers could adopt the consumption levels and patterns that have the lowest environmental impacts within their quintile, yielding a reduction of 25–53% in environmental pressure. In this scenario, actions focused solely on the food and services sectors would reduce environmental pressure enough to bring land-system change and biosphere integrity back within their respective planetary boundaries. Our study highlights the critical need to focus on high-expenditure consumers for effectively addressing planetary boundary transgressions. An analysis of the environmental footprints of consumption finds that planetary boundary transgressions can be mitigated by following an effective mitigation pathway focused on the food and services sectors and high-expenditure consumers.

Environmental issues have gradually become a key concern for society. The public has been paying increasing attention to corporate environmental disclosure and performance. With the “go global” trend, more and more enterprises are looking to overseas markets for new technologies and resources. Multinational enterprises (MNEs) are facing more challenges than domestic enterprises. To remain competitive and sustainable, enterprises from developing countries need to gain a foothold in developed countries. We explore how MNEs’ internationalization impacts environmental disclosure, specifically focusing on the role of green investors as stakeholders. We draw evidence from Chinese-listed MNEs, with a total of 4,709 panel data observations. For the main analysis, we use a fixed effect model. The findings suggest that a higher level of internationalization can improve both the willingness and quality of environmental disclosure for MNEs, and this relationship is further strengthened by green investors. A heterogeneity analysis reveals that the positive effect of internationalization on environmental disclosure is mainly present in state-owned enterprises (SOEs) and developed host countries. We find that external pressure from host countries motivates MNEs to increase environmental disclosure willingness and quality. This study provides valuable insights for MNEs from emerging economies on how to achieve legitimacy and a positive reputation in overseas markets through environmental disclosure strategies. This study proposes the importance of green investors on environmental disclosure issues from a stakeholder perspective and provides new theoretical insights for environmental policy reform in developing countries such as China.

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.

This study aims to examine the impact of corporate social responsibility (CSR) and digital transformation (DT) on green innovation (GI) among manufacturing SMEs in Yemen, in addition to exploring the moderating role of DT in the relationship between CSR and GI. To this end, data collected from 224 SME managers/owners in Yemen were analyzed using structural equation modeling (SEM-PLS) via SmartPLS. The results indicate that CSR significantly enhances GI among manufacturing SMEs. Furthermore, DT not only has a direct positive effect on GI but also moderates the relationship between CSR and GI, amplifying the impact of CSR practices. This suggests that DT acts as a catalyst, strengthening the effects of CSR on GI. These results are expected to enlighten managers of manufacturing SMEs in least-developed countries on the importance of integrating CSR with DT strategies to improve GI capabilities. Therefore, policymakers should support this integration to foster sustainable development and enhance SMEs’ performance. Overall, our findings contribute to the literature by combining CSR and DT within a framework that elucidates their interaction and impact on GI. It provides new insights into how DT can enhance CSR-driven GI in less developing countries. Article Highlights CSR and digital transformation have a strong impact on green innovation. Digital transformation acts as a moderator between CSR and green innovation. The resource-based view (RBV) and stakeholder theory were useful to explain green innovation.