In this study, we examine whether corporate environmental responsibility plays a role in enhancing operating performance in the financial services sector. Because achieving success with CER investing is often a long-term process, we maintain that by effectively investing in CER, executives can decrease their firms’ environmental costs, thereby enhancing operating performance. By employing a unique environmental dataset covering 29 countries, we find that the reducing of environmental costs takes at least 1 or (...) 2 years before enhancing return on assets. We also find that reducing environmental costs has a more immediate and substantial effect on the performance of financial services firms in well-developed financial markets than in less-developed financial markets. These results are economically and statistically significant and robust even after alleviating endogeneity and using an additional performance measure. We interpret our empirical results as supporting the social impact and reputation-building hypothesis. Our findings also suggest that policy makers dealing with corporate sustainability management should pursue an environment-centered industry policy not only at the manufacturing sector but also at the financial services sector, as firms in both sectors with lower environmental costs perform better. (shrink)

The existing literature has explored the impact of high-speed rail (HSR) opening on macrolevel environmental performance. However, few studies have validated its effects on microlevel corporate environmental responsibility performance. Therefore, on the basis of data from Chinese A-share listed companies from 2011 to 2020, we examine the relationship between HSR opening and corporate environmental responsibility performance, along with the underlying reasons for this relationship. Our research reveals that HSR opening can (...) significantly improve the corporate environmental responsibility performance. Talent aggregation and supervisory pressure constitute the two main channels that explain the positive relationship. Furthermore, the results of heterogeneity tests indicate that this positive effect is more significant in cities with larger populations and administrative centers, as well as in nonpolluting industries and companies certified through ISO14001 environmental management systems. This paper confirms that HSR opening contributes to generating positive externalities for firms and provides valuable insights into improving and understanding corporate environmental responsibility performance. (shrink)

In this article, we examine how firms design executive compensation in light of their risk environment. Prior literature shows that corporate environmental responsibility (CER) of a firm inversely affects firm risk. We argue that firms with better CER performance benefit from the reduced firm risk, and therefore are more likely to provide greater managerial risk‐taking incentives to encourage the risk‐averse managers to undertake risk‐increasing but positive net present value (NPV) investments. Consistent with our hypotheses, we find (...) that a firm’s CER rating is positively associated with its CEO risk‐taking incentives (vega) in the following year. We also document cross‐sectional variations in the CER‐vega relationship, that is, a weaker association in the controversial industries. This study contributes to the literature by investigating the role of CER on executive compensation design from the perspective of risk management. (shrink)

In this study, we examine the determinants of corporate environmental responsibility, as well as the relationship between legal systems and CER as measured by a unique set of global environmental cost data. Results of our analyses show that firms’ legal origins affect CER, which requires a long-term management perspective. Specifically, our results indicate that civil law firms exhibit significantly higher levels of CER than common law firms. In addition, results of an auxiliary test suggest that manager (...) shareholding has a significant, nonlinear relationship with CER. The association between a firm’s legal origin and its CER performance remains robust after controlling for the effects of managerial ownership and issues related to endogeneity. Our findings imply that although the majority of corporate law studies in the past few decades provide support for the common law system emphasizing the maximization of shareholder value and investor protection, the civil law system stressing the maximization of stakeholder wealth and the importance of CER may become more influential in the coming decades as CER becomes central to firms’ operations. (shrink)

Although the same environmental regulations apply to all regions in China, legal enforcement can be different due to local economic development priorities. There is still a lack of knowledge about how regional disparities affect the operating performance results of the implementation of corporate environmental management practices, thus providing little information for foreign companies when they invest and develop their production base in China. To fill this research gap, this paper collects data from the Fortune 500 Chinese (...) firms to investigate the moderating role of regional disparities in affecting the performance results of corporate environmental management efforts based on the institutional theory. The disclosed corporate environmental responsibility practices serve as proxy to represent corporate environmental management practices. Content analysis approach was applied to collect and analyze CER practices published in the corporate reports of Chinese manufacturers. The results show that CER has a positive impact on operating income, while regional disparities influence the relationship between CER and corporate operating income. Specifically, CER and operating income are positively related in Eastern China; on the contrary, they are negatively related in Western China. This paper adds to the body of knowledge about environmental discrepancies in the same emerging economy, and provides insights for systematic consideration in terms of the issues of government environmental regulations and corporate environmental strategies. (shrink)

This paper examines the effectiveness of the use of executive compensation linked to Corporate Social Responsibility (CSR) goals across US firms. Empirical analysis of a cross-industry sample of 746 listed companies for the period 2002–2013 showed that the use of CSR-linked compensation contracts for Named Executive Officers (NEOs) promotes CSR performance. More specifically, we found that linking NEOs’ compensation to CSR goals produces positive effects in the 3rd year after adoption. As firms accumulate experience and learn how (...) to use the system over the following eight periods, CSR performance increases monotonically. Furthermore, experience accumulated over time affects the different specifications of CSR performance asymmetrically, by reducing both environmental and social CSR concerns and increasing only environmental CSR strengths. Interestingly, we also found that the simultaneous use of other CSR-focused governance systems moderates the effect of a firm’s accumulated experience in using CSR-linked executive compensation on CSR performance: the existence of a CSR committee at the board level and the public release of a CSR report are likely to have a positive moderating effect, while the purchase of a CSR audit has no moderating effect. (shrink)

We aim to investigate the effect of corporate environmental responsibility (CER) engagement on investors' reactions. We also explore heterogeneity of this impact among different types of companies and different company's market performance. We use panel data models and quantile regression based on data related to firms listed on the A-share China security market and the final sample consists of 3,776 firm-year observations. The results show that CER engagement has a significant positive impact on investors' investment decisions. (...) Further, investors are more sensitive to CER engagement of high energy-consumption companies and no matter the company is a state-owned or a non-state-owned, CER engagement has a significant positive impact on investors' reactions. CER engagement has a significant positive impact on investors' reactions in all quantiles except one and the promoting effect increases first and then decreases with the growth of corporate market value from lower to upper quantiles. (shrink)

In recent years, the Audit Pilot of Natural Resources Assets (APNRA) pilot program has been implemented by the Chinese government to strengthen the protection of natural resources and the ecological environment. Based on the APNRA pilot program, we use the multi-period differences–in–differences model to investigate the response of corporate environmental responsibility to external governance pressure. We find that firms significantly improve their environmental investment and performance after the implementation of the APNRA pilot program. Sewage charges (...) (including green fees) and ecological protection incentives constitute the two main channels that explain the positive relationship. We further find that the impact of the program on corporate environmental investment and performance is more pronounced for firms in regions with poor environmental quality, and for firms in heavy-polluting industries. This paper introduces the role of government governance in generating positive externality for firms and provides a valuable understanding of environmental governance in an emerging market. (shrink)

This paper examines whether corporate environmental responsibility is influenced by regional differences in climate change denial. While there is an overwhelming consensus among scientists that climate change is happening, recent surveys still indicate widespread climate change denial across societies. Given that corporate activity causing climate change is fundamentally rooted in individual beliefs and societal institutions, we examine whether local perceptions about climate change matter for firms’ engagement in environmental responsibility. We use climate change perception (...) surveys conducted in the U.S. to compute a novel measure of climate change denial for each U.S. county. We find that firms located in counties with higher levels of climate change denial have weaker environmental performance ratings, are more likely to commit environmental violations, and impose greater environmental costs on society. Regional differences in religiosity, social capital, political leaning, or county-level demographic characteristics cannot explain these results. Furthermore, we document that strong corporate governance mechanisms and corporate culture moderate the negative relationship between climate change denial and corporate environmental responsibility. Overall, our findings offer new insights into how local beliefs and perceptions about climate change may influence firm-level sustainability practices. (shrink)

In this paper, we draw on insights from theories in the management and corporate governance literature to develop a theoretical model that makes explicit the links between a firm’s corporate social responsibility related board attributes, its board CSR strategy, and its environmental and social performance. We then test the model using structural equation modeling approach. We find that the greater the CSR orientation of the board, the more proactive and comprehensive the firm’s CSR strategy, and (...) the higher its environmental and social performance. Moreover, we find this link to be endogenous and self-reinforcing, with superior CSR performers tending to further strengthen their board CSR orientation. This result while positive is also suggestive of the widening of the gap between the leads and laggards in CSR. Therefore, the question arises as to how ‘leaders’ are using their superior CSR competencies seen by many scholars as a source of corporate competitive advantage. Stakeholders of corporations therefore need to be cognizant of this aspect of CSR when evaluating a firm’s CSR activities. Policy makers also need to be cognizant of these concerns when designing regulation in this field. (shrink)

The aim of this paper is to shed some light on understanding why companies adopt environmentally responsible behavior and what impact this adoption has on their performance. This is an empirical study that focuses on the United Nations (UN) Global Compact (GC) initiative as a Corporate Social Responsibility (CSR) mechanism. A survey was conducted among GC participants, of which 29 responded. The survey relies on the anticipated and actual benefits noted by the participants in the GC. The (...) results, while not conclusive, indicate that companies have more than one reason for adopting environmentally responsible behavior and that ethical and economic reasons co-exist. In terms of performance, the impact of participation in the GC seems to be particularly high in securing network opportunities and improved corporate image. The results indicate that companies that have participated many years in the GC, have submitted the most projects and have attended the most GC meetings also regard their CSR involvement as having had a strong, positive influence on their market performance. GC participation does not result in significant cost advantages, but this does not seem to have been regarded as a goal anyway. Costs seem to be affected to a␣large extent by existence of in-house research and␣development and the capability of developing environmentally sound technologies. Overall, the company receives both ethical and economic benefits from joining the GC. (shrink)

Proponents of corporate environmental responsibility argue that corporations shortchange shareholders by investing too little in environmental responsibility. They claim that corporations can improve their financial performance by increasing their investment in environmental responsibility. Opponents of corporate social responsibility argue that corporations shortchange shareholders by investing too much in environmental responsibility. They claim that corporations can improve their financial performance by reducing their investment in environmental responsibility. (...) Yet, others claim that corporations serve their shareholders well by investing just enough in social responsibility, not too little and not too much. If so, corporations increase their investment in environmental responsibility when an increase improves financial performance and reduce their investment in environmental responsibility when a decrease improves financial performance. Our evidence is consistent with this last claim. We find that the behavior of corporations is consistent with the claim that they act in the interest of shareholders, increasing or decreasing their investment in environmental responsibility as necessary to improve their financial performance. (shrink)

This study aims to overview the existing literature, knowledge framework, and intellectual structure mapping in the field of corporate environmental performance (CEP) and corporate financial performance (CFP) by employing a bibliometric analysis approach to selected 311 papers sourced from the Scopus database between 1994 and 2022. It presents the publication growth, influential sources, productive authors, and collaboration index of countries using Biblioshiny software. Stringent regulatory regime and stakeholders' pressure followed by a growing trend of publication (...) motivated us to comprehend the evolving facets of the relationship using co‐citation analysis followed by a systematic literature review using coupling analysis which identified five research themes as CEP–CFP relationships—facets, strategies and dimensions, and methodological choices during the initial phase of 1994–2014; and green innovation and corporate sustainability practices, environmental disclosure and environmental responsibility, and green development behavior and practices during 2015–2022. From the insights congregated from research themes, the study discusses prominent developments and provides future research directions to further enrich the field of CEP and CFP. Our findings provide various global regulatory frameworks, government, policymakers, and firm managers the need to explore the dynamic factors while formulating the strategic environmental policy and how it contributes to the financial performance of the firms. (shrink)

With the emergence of environmental sustainability and green business management, increasing demands have been made on businesses in the areas of environmental corporate social responsibility. Furthermore, the influence of ECSR on green capital investment, environmental performance, and business competitiveness has also been the subject of attention from enterprises. However, in previous studies, the mediating role of green information technology capital in the relationship between ECSR, environmental performance, and business competitiveness, has not been (...) investigated by researchers. In order to bridge this gap in the ECSR literature, this study aims to examine the influence of ECSR on green IT capital, and the consequent effect of green IT capital on environmental performance and business competitiveness. Data were collected from 358 companies from the top 1000 manufacturers in Taiwan. The results confirmed that ECSR has significant positive effects on green IT human capital, green IT structural capital, and green IT relational capital. Green IT structural capital and green IT relational capital have positive effects on environmental performance and business competitiveness, and environmental performance has a positive effect on business competitiveness. In addition, green IT structural capital and green IT relational capital have partial mediating effects on ECSR, environmental performance, and business competitiveness. The implications and suggestions for future research are discussed. (shrink)

We investigate the financing strategies of environmentally responsible firms to understand how they set target capital structures and make incremental financing decisions. Literature shows that firms with better environmental performance have lower risk and better access to financing. However, it is not obvious how these firms choose to finance their investments. Using an extensive data set of U.S. firms, we find that firms with superior environmental performance have significantly lower debt ratios and use mostly short‐term debt (...) for temporary financing needs. In doing so, environmentally responsible firms are able to achieve more tax savings and experience lower costs of financial distress. Our results provide new empirical facts about environmental performance and financing decisions, and they help explain the observed relationship between environmental performance and economic performance. (shrink)

The current research investigates the interplay of board gender diversity, the quality of corporate social responsibility disclosure, and the green innovation performance of a firm. It examines the moderation effect of the CSRD on the relationship between corporate GIP and BGD. The study inculcates 3,736 firm-year observations of A-share listed Chinese firms from 2010 to 2019. Least square dummy variables method, generalized method of moments, and 2SLS are employed for the analysis of the study. The findings (...) foster an affirmative and significant impact of BGD on corporate GIP in terms of green innovation patents. Moreover, the quality of CSRD is also detected for a significant moderating effect on the relationship between BGD and corporate GIP. The quality of CSRD emerges to be an indicator for social resilience and female role congruence under the purview of the social resilience theory and the role congruence theory, respectively. This research would help managers and policymakers of developing nations in formulating environmental innovation strategies for corporate sustainability. (shrink)

The relationship between corporate social responsibility and corporate financial performance has long been a central and contentious debate in the literature. However, prior empirical studies provide indefinite conclusions. The purpose of this study is to review systematically and quantify the CSR–CFP link in a meta-analytic framework. Based on 119 effect sizes from 42 studies, this study estimates that the overall effect size of the CSR–CFP relationship is positive and significant, thus endorsing the argument that CSR does (...) enhance financial performance. Furthermore, this work sheds light on the causal relationship between CSR and CFP. Subsequent financial performance is associated with prior social responsibility, while the reverse direction is not supported. This finding supports the instrumental stakeholder theory. As predicted, the meta-analysis results indicate that the measurement strategies of the two key constructs of CSR and CFP explain some variations of the CSR–CFP relationship. Last, this study examines the moderating effect of the environmental context on the CSR–CFP link. This work proposes that CSR in the developed world, with a relatively mature institutional system and efficient market mechanism, will be more visible than CSR in the developing world. The results show that the CSR–CFP relationship is stronger for firms from advanced economies than for firms from developing economies. (shrink)

ABSTRACTThis study examines whether a firm's ownership form has any influence on its social performance. Conventional wisdom suggests that public corporations are more susceptible to corruption and socially irresponsible behavior than privately owned corporations because of the intense short‐term profit maximization pressure from shareholders and the lack of sufficient monitoring mechanisms. This study introduces an alternate perspective in thinking about the relationship between ownership form and corporate social responsibility. This study reasons that public corporations are more likely (...) to become socially responsible because of their greater exposure to external influence and greater dependence on external actors with diverse interests. Using a panel data on the pollution management practices of 118 industrial facilities over a 13‐year period, this study shows that public corporations were indeed subject to greater external pressure to reduce pollution, and the pressure led to consistently stronger environmental performance. (shrink)

The Islamic Republic of Pakistan has been a mere victim of climate change in recent years. The country needs emergency measures at every level to mitigate environmental dilapidation. The role of enterprises in the country’s environmental efforts is critical. In this regard, the hotel sector is known for its outsized carbon footprint. Knowing this, the current study aims to improve a hotel enterprise’s environmental performance as an outcome of corporate social responsibility. The study also (...) considers the mediating role of pro-environmental behavior of employees and the moderating role of altruistic values. A hypothesized model was developed, which was validated by employing the structural equation modeling technique. The empirical results confirmed that CSR, directly and indirectly, positively induces the ENP of a hotel enterprise. Whereas the conditional indirect role of ALT was also found significant. The study offers different implications for theory and practice, among which one important takeaway for the hotel sector is to realize the importance of employees to spur ENP of a hotel enterprise through their eco-friendly behavior. At the same time, the current work also advances the theory by highlighting the moderating role of ALT between the indirect relationship of CSR and ENP. (shrink)

This study draws on neo-institutional theory to examine how and why corporate environmental management practices might affect environmental performance. It contributes to the literature by using a large, global data set to investigate the impact of 10 corporate environmental management practices on greenhouse gas emissions or emissions intensity. It focuses on greenhouse gas emissions which pose an existential threat to the people and planet, and the environmental management practices of corporations whose effectiveness has (...) provoked cynicism and claims of “greenwash”. Our results are based on a dynamic, robust and large-scale econometric analysis, which includes tests of association and Granger causation in comparison with earlier research. A key finding, which is of interest not only to the academic literature but also to policymakers and managers, is that environmental performance impacts environmental management practices but not vice versa, supporting the hypothesis that corporations adopt these practices as a symbolic legitimizing device rather than a genuine attempt derived from moral obligation to reduce their greenhouse gases or carbon intensity. (shrink)

This study extends previous literature on the association between corporate social responsibility and corporate financial behavior by investigating the influence of corporate environmental performance on the cost of debt. Using a sample of Chinese private-owned firms, we document strong and consistent evidence to show that corporate environmental performance is significantly negatively associated with the interest rate on debt—the proxy for the cost of debt. The findings suggest that lenders applaud better (...) class='Hi'>environmental performance. Moreover, internal control attenuates the negative association between corporate environmental performance and the interest rate on debt, implying substitutive effects between corporate environmental performance and internal control on the reduction of interest rates on debt. The results are robust to various sensitivity tests and are still valid after controlling for the potential endogeneity between corporate environmental performance and the interest rate on debt. (shrink)

Do employees respond to a firm's environmental, social, and governance (ESG) performance? This study examines the relationship between corporate ESG performance and employee turnover, employing social identity theory and rational action theory. Using data from Chinese A-share nonfinancial listed firms over the period from 2011 to 2020, the results reveal a positive U-shaped relationship. Specifically, moderate levels of ESG performance are associated with reduced employee turnover. And this relationship is more pronounced in the environmental (...) and social pillars. Further analysis shows that employees at high-performing firms are more concerned with ESG performance, and those with high environmental awareness exhibit greater sensitivity to it. Information asymmetry may mediate the relationship between corporate ESG performance and employee turnover. These results contribute valuable insights into the broader implications of ESG performance for employee turnover, clarify the underlying mechanisms, and offer practical guidance for refining corporate ESG strategies. (shrink)

Corporate social responsibility is frequently defined primarily in terms of the social and environmental impact of systemic organisational activity. This misses the point. To be applicable, corporate responsibility should be understood as a process, through which individuals’ moral values and concerns are articulated. Moreover, there are important grounds for asserting that such a process should be participative, involving employees . It seems inconsistent not to respect such groups’ right to an opinion, while at the same (...) time purporting to be ethical and responsible; also, a better alignment of organisational policy and employees’ values holds possibilities for enhanced motivation and work performance. Through such a participative process, matters of social responsibility may be identified in the expectations and moral claims of an organisation’s stakeholders. Such claims constitute prima facie obligations to which those responsible for corporate policy should attend, and where such demands conflict then dialogue is required in order to establish an appropriate course of action. (shrink)

Recent years have seen a significant increase in stakeholder pressure on firms to be not only economically sustainable but also from an environmental and social perspective. Besides operational changes in practices and products companies have reacted toward this increased pressure from a strategic perspective through structural changes of their top management team. A recent addition to the TMT has been the appointment of the chief officer of corporate social responsibility. In this paper, we take a behavioral perspective (...) and investigate how the employment of a chief officer of CSR to the TMT impact on firm performance. Specifically, we explore how certain characteristics of the newly appointed chief executive of CSR impact on a firm’s financial performance. We collected secondary, longitudinal data of listed companies in the United States. Results indicate that appointing a chief executive of CSR does under certain conditions and characteristics result in financial performance benefits. Furthermore, the greatest financial performance benefits can be achieved if the appointee is female and has a CSR functional background. (shrink)

Corporate social responsibility (CSR) is a dramatically expanding area of activity for managers and academics. Consumer demand for responsibly produced and fair trade goods is swelling, resulting in increased demands for CSR activity and information. Assets under professional management and invested with a social responsibility focus have also grown dramatically over the last 10 years. Investors choosing social responsibility investment strategies require access to information not provided through traditional financial statements and analyses. At the same time, (...) a group of mainstream institutional investors has encouraged a movement to incorporate environmental, social, and governance information into equity analysis, and multi-stakeholder groups have supported enhanced business reporting on these issues. The majority of research in this area has been performed on European and Australian firms. We expand on this literature by exploring the CSR disclosure practices of a size- and industry-stratified sample of 50 publicly traded U.S. firms, performing a content analysis on the complete identifiable public information portfolio provided by these firms during 2004. CSR activity was disclosed by most firms in the sample, and was included in nearly half of public disclosures made during that year by the sample firms. Areas of particular emphasis are community matters, health and safety, diversity and human resources (HR) matters, and environmental programs. The primary venues of disclosure are mass media releases such as corporate websites and press releases, followed closely by disclosures contained in mandatory filings. Consistent with prior research, we identify industry effects in terms of content, emphasis, and reporting format choices. Unlike prior research, we can offer only mixed evidence on the existence of a size effect. The disclosure frequency and emphasis is significantly different for the largest one-fifth of the firms, but no identifiable trends are present within the rest of the sample. There are, however, identifiable size effects with respect to reporting format choice. Use of websites is positively related to firm size, while the use of mandatory filings is negatively related to firm size. Finally, and also consistent with prior literature, we document a generally self-laudatory tone in the content of CSR disclosures for the sample firms. (shrink)

Drawing on institutional and signaling theories, this study examines how environmental corporate social responsibility affects firm performance in a dysfunctional institutional environment. We extend the ECSR literature by suggesting that ECSR indirectly influences firm performance through the mediating effects of business and political legitimacy. Based on a dataset of 238 firms in China, we find that ECSR affects business and political legitimacy followed by firm performance. Moreover, legal incompleteness weakens and legal inefficiency strengthens the (...) effects of ECSR on business and political legitimacy. (shrink)

Business Ethics, the Environment &Responsibility, Volume 31, Issue 4, Page 981-998, October 2022.

Two fundamental business ethics issues that repeatedly surface in the academic literature relate to business's role in the development of public policy [Suarez, S. L.: 2000, Does Business Learn? (The University of Michigan Press, Ann Arbor, MI); Roberts, R. W. and D. D. Bobek: 2004, Accounting, Organizations and Society 29(5-6), 565-590] and its role in responsibly managing the natural environment [Newton, L.: 2005, Business Ethics and the Natural Environment (Blackwell Publishing, Oxford)]. When studied together, researchers often examine if, and how, (...) corporations influence environmental policy decisions. Drawing from literatures on corporate political activity, corporate social and environmental performance, and corporate environmental disclosure, we develop and empirically examine two research questions concerning the relations between corporate political expenditures, environmental performance, and environmental disclosure. The questions are: (1) Do corporations that are poorer environmental performers spend more on political activities than their better-performing counterparts? (2) Is there an association between corporations' spending on political activities and the extent of their financial report environmental disclosures? We investigated these questions through analyses of data we gathered on a sample consisting of 119 U.S. environmentally sensitive firms for the 2001-2002 election cycle. After controlling for firm size and specific industry effects, our tests reveal a significant, inverse relationship between firm environmental performance and political spending. This is consistent with the notion that U.S. firms with relatively poorer environmental performance records engage more intensely in corporate political activities as part of their overall strategic management of their relationship with the state. In addition, a significant and positive association between the amount of political spending and the extent of environmental disclosure suggests that environmental disclosure and political spending are both proactive, complementary tactics to strategically manage public policy pressure. If corporations' strategies are intentionally designed to unreasonably limit their environmental responsibilities or to misrepresent firm environmental performance, then we argue that these activities reflect a significant lapse in ethical conduct. (shrink)

. This paper examines the association between long-term compensation and corporate social responsibility for 90 publicly traded Canadian firms. Social responsibility is considered to include concerns for social factors and the environment, 564-578; Kane, E. J., 341-359). Long-term compensation attempts to focus executives efforts on optimizing the longer term, which should direct their attention to factors traditionally associated with socially responsible executives. As hypothesized, we found a significant relationship between the long-term compensation and total CSR weakness as (...) well as the product/environmental weakness dimension of CSR. In addition, we found a marginally significant relationship between long-term compensation and total corporate responsibility. Our findings are that executives long-term compensation is associated with a firms environmental actions, and that firms that utilize long-term compensation are more likely to mitigate product/environment weaknesses than those that do not. Implications for practice and research are discussed. (shrink)

Corporate management is torn between either focusing solely on the interests of stockholders or taking into account the interests of a wide spectrum of stakeholders. Of course, there need be no conflict where taking the wider view is also consistent with maximising stockholder wealth. In this paper, we examine the extent to which a conflict actually exists by examining the relationship between a company's positive and negative corporate social responsibility activities and equity performance. In general, we (...) find little evidence to suggest that managers taking a wider stakeholder perspective will jeopardise the interest of its stockholders. However, our findings do suggest that the market is not only influenced by the independent CSR activities, but also the totality of these activities and that the facets that they value do vary over time. It seems that most recently, the market has valued most firms that satisfied minimum requirements in the areas of diversity and environmental protection but were most proactive in the area of employee-relations. (shrink)

This study analyzes how the board’s characteristics could be associated with globally corporate social responsibility CSR and specific areas of CSR. It is drawn on all listed firms, in 2016, on the SBF120 between 2003 and 2016. Our results provide strong evidence that diversity in boards and diversity of boards globally are positively associated with corporate social performance. However, they influence differently specific dimensions of CSR performance. First, we show that large boards are positively associated (...) with all areas of CSR performance, while specific and overall CSR scores are negatively associated with CEO-chair structures. Second, board gender diversity is positively associated with human rights and corporate governance dimensions. Third, age diversity is positively associated with corporate governance, human resources, human rights, and environmental activities. Also, our results provide evidence that outside directors care about CSR performance. Specifically, the presence of foreign directors is positively associated with environmental performance and community involvement, whereas CSR-Governance dimension is positively associated with the presence of independent directors. Regarding the director’s educational level, post-graduated directors are positively and significantly associated with overall CSR score and all CSR sub-scores, except the corporate governance one. When directors have multiple directorships, they are more concerned about human resources, environmental performance, and business ethics. Finally, our findings are robust only in non-family firms. In fact, family boards are less diverse than non-family ones; specifically, they have a lower number of independent, foreign, and high-educated directors. (shrink)

One of the major roadblocks in conducting Environmental Corporate Social Responsibility (ECSR) research is operationalization of the construct. Existing ECSR measurement tools either require primary data gathering or special subscriptions to proprietary databases that have limited replicability. We address this deficiency by developing a transparent ECSR measure, with an explicit coding scheme, that strictly relies on publicly available data. Our ECSR measure tests favorably for internal consistency and inter-rater reliability, as well as convergent and discriminant validity.

In the context of “carbon peaking and carbon neutrality,” companies are responsible for actively reducing carbon emissions and achieving a balance among economic, environmental, and social benefits. From a non-economic perspective, this study chose a sample of 9872 A-share manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2019. This study used the fixed-effect model to explore the mechanism of corporate social responsibility (CSR) and its three sub-dimensions (shareholder rights, employee rights, and social (...) contribution) on corporate carbon performance. This study also examined the mediating mechanism of government subsidy and the moderating effects of internationalization and corporate governance as internal and external factors. The results show that: (1) CSR can significantly improve corporate carbon performance, and government subsidies play a partial intermediary role. (2) CSR significantly promotes carbon performance for firms with lower internationalization levels and higher corporate governance levels. (3) Heterogeneous conditions such as CSR disclosure willingness, CSR report quality, and corporate attributes have different impacts on corporate carbon performance. These findings can help government agencies formulate policies to promote CSR and restrain corporate carbon emissions. Corporate managers can also fulfill CSR and improve carbon performance through government subsidies, internationalization, and corporate governance. (shrink)

For many firms, a focus on corporate social responsibility (CSR) is an indication to stakeholders that the firm is concerned about social and environmental issues. However, these same firms may engage in CSR activities with the expectation that these activities will increase their bottom line. A relevant, and highly researched question, is the relationship between CSR and performance. The findings are inconclusive, indicating a need to consider other explanations. Several authors have drawn on the resource-based view (...) of the firm to suggest that CSR can give a firm a competitive advantage. In this article we draw on and further develop this research, by focusing on four outcomes of CSR initiatives: strategic disadvantage, strategic necessity, temporary strategic advantage, and strategic advantage. We exemplify this with two cases. The article contributes to the literature by developing a set of possible outcomes, by recognizing several issues which result in strategic necessity, and by suggesting movement between the outcomes. (shrink)

Finance is grease to the economy. Therefore, we assume that it may affect corporate social responsibility (CSR) and the sustainability of economic development too. This paper discusses the transmission mechanisms between finance and sustainability. We find that there is no simple one-to-one relationship between financial development and sustainable development but there are various – often indirect – linkages. It appears that most of the literature concentrates on the role of public shareholders when it comes to changing corporate (...) policy and performance in a more sustainable direction. However, this focus neglects the potential impact of the credit channel and private equity on a firm’s non-financial policies and performance. These very powerful mechanisms can govern business policies and practices. Therefore, there appears to be much more scope for finance to promote socially and environmentally desirable activities and to discourage detrimental activities than has been acknowledged in the academic literature so far. (shrink)

According to the Dutch Ministry of Economic Affairs (2001), transparency by means of Sustainability Reporting should lead to better Corporate Social Responsibility (CSR) performance of companies. Sustainability Reporting should also give consumers the information they need to purchase the most sustainable products available (Dutch Ministry of Economic Affairs, 2004). This article analyses the driving factors influencing CSR and Sustainability Reporting at seven breweries in the Netherlands. It also gives a better understanding of organizational behaviour with reference to (...) CSR and the reasons breweries have for Sustainability Reporting. The Dutch government has no intention of forcing organizations to publish a sustainability report, since it is trying to diminish the volume of legislation. Rather, the government prefers to rely on the willingness and initiatives of organizations to make CSR a success. In 2006, the Dutch Ministry of Economic Affairs will evaluate the effect of its CSR policy. But is it a success already? During our research, breweries appeared to find CSR more important than Sustainability Reporting. Sustainability reporting is, for most breweries, not the way to reach stakeholders. Most stakeholders have their own means for receiving information e.g. annual reports, meetings, public statements and press releases. Although small breweries think CSR is very important, they feel no pressure from outside to publish a sustainability report. For them it is very complex and expensive to publish a sustainability report. Large breweries feel pressure from many stakeholders to be transparent, but not on a regular basis. We conclude from this research that CSR does not stimulate Sustainability Reporting, but neither does Sustainability Reporting stimulate CSR. (shrink)

This paper attempts to investigate how and why organisations in Macao’s gambling industry engage in corporate social responsibility. It is based on an in-depth investigation of Macao’s gambling industry with 49 semi-structured interviews, conducted in 2011. We found that firms within the industry were emphasising pragmatic legitimacy based on both economic and non-economic contributions, in order to project positive images of the industry, while glossing over two domains of adverse externalities: problem gambling among visitors, and the pollution and (...) despoliation of the environment. By engaging symbolically rather than substantively in CSR, the gambling firms were diverting attention away from issues of moral legitimacy, in order to be allowed to continue to pursue “business as usual” as a means of obtaining substantial financial returns in a social, cultural and socio-political context that was exerting relatively little public pressure to improve corporate social and environmental performance. We conjecture that the gambling firms were feeding on borrowed time. (shrink)

This paper presents a roadmap of Finnish companies adopting and managing corporate social responsibility (CSR). It discusses the companies' views on CSR and highlights the practices that Finnish companies have adopted or are currently adopting. It also presents a framework that outlines the CSR processes and management prospects. Results showed that Finnish companies are progressively managing CSR. This newly revived thinking about social responsibility is viewed as an issue traced back from Finland's history of industrial development. There (...) is no general definition of CSR; however, various concepts are connoted into it. Driven by several factors, CSR is developing gradually as indicated by the positive responses and initiatives of the companies. CSR management and practices towards employees, suppliers, community and customers are well defined locally based generally on established socially responsible behavior which could be articulated by laws and regulations, corporate values and business ethics. However, managing CSR with a global scope, problems such as; lack of information and structured management system, different views and interpretations, supply chain complexities, overlap with environmental issues, etc. often lead some companies to manage CSR haphazardly. Views and management of CSR are also influenced by some distinct Finnish cultural attributes. An initial conceptual framework for CSR is drawn reflecting the current practices and prospects for management strategies. Such framework can be used in organizing and streamlining CSR elements for effective management approaches and measuring of performance. It could be expected that in due time, the efforts of the companies will become more evident, organized and systematically managed. (shrink)

The purpose of this study is to analyse the effects of personal demographic factors on Chinese university students’ values and perceptions of Corporate Social Responsibility (CSR) issues, and to identify the link between personal values and perceptions of CSR. The quantitative data consisted of 980 Chinese university students, and were collected by using a structured self-completion questionnaire. This study found that: 1) the importance of values education should be stressed, because we found that altruistic values associate negatively with (...) perception of CSR, in contrast, egoistic values associate positively; 2) a CSR education programme should be designed accordingly to fit different student characteristics and needs such as gender and major differences; 3) values should be used as criteria for education and recruitment purposes, e.g., we found that female students represent more ethical values than male students, and have a more negative perception of the CSR performance; 4) the importance of environment performance should be recognised by Chinese corporations and policy-makers, because we found that Chinese corporations perform better in economic and social responsibilities than environmental responsibility. It provides an insight of the value structures of Chinese university students and the forces that shape ethical perceptions. It offers a comprehensive study of Chinese companies’ CSR performance, and the results improve the awareness of scholars and managers in solving the current problems and developing their CSR performances further. (shrink)

According to the Green Paper presented by the European Commission in July 2001, corporate social responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (Commission of the European Communities, 2001b, p. 6). On this basis, in 2002, the Italian Government, and especially the Italian Ministry of Welfare, launched an initiative called CSR-SC (social commitment) in order to foster the proactive (...) social role of Italian enterprises, with great attention on SME involvement. The technical partner of the Italian Ministry of Welfare for this initiative is Bocconi University. The goal of this contribution is to present the main results of CSR–SC research project developed by Bocconi University. The paper provides a detailed picture of the general scheme designed to carry out the research project and a review of the different methodologies used to support the solutions proposed. (shrink)

The value relevance of corporate social responsibility performance disclosures for financial markets participants remains uncertain despite advances in the literature and the recent proliferation of CSR disclosures around the world. Using an experimental approach involving MBA students at universities in the United States and Lebanon, we study the value relevance of CSR disclosures by testing whether they affect participants’ personal portfolio management investment decisions. We also examine whether the degree to which the CSR disclosures affect these decisions (...) is influenced by corporate governance quality. To examine these issues, we examine the effect of environmental performance on investment decisions in Experiment 1, and the effect of labor performance on investment decisions in Experiment 2. Results from both experiments show that investment decisions are affected by CSR performance. Analysis shows that governance strength exerts a marginal effect on the investment decision only when CSR performance is strong. Lebanese participants appear to be more sensitive to weak performance than U.S. participants. Overall, our findings extend the CSR disclosures literature by documenting the value relevance of CSR performance for financial markets participants’ decision making. These findings also extend the governance literature by documenting that consistent with attribution theory, the effects of governance quality are contingent upon the information and decision context, and that efforts to decontextualize governance may be counterproductive. (shrink)

The purpose of this study is to examine whether corporate social responsibility activities perceived by consumers affect brand trust and corporate sustainability management. In other words, this study tried to examine whether the compatibility and authenticity of CSR influences brand trust, thereby affecting CSM including economic viability, environmental soundness, and social responsibility. To measure this, an empirical analysis was conducted on 479 consumers who had experience purchasing products from cosmetic companies that are carrying out CSR. (...) As a result of the analysis, it was found that the compatibility and authenticity of CSR have a positive effect on brand trust. Also, it was found that brand trust had a positive effect on social responsibility among the sub-concepts of CSM, but did not affect economic viability and environmental soundness. The results of this study are expected to provide strategic implications for social responsibility performance and brand trust building necessary for cosmetics companies to grow continuously. (shrink)

The question of how an individual firm's social and environmental performance impacts its firm risk has not been examined in any empirical UK research. Does a company that strives to attain good environmental performance decrease its market risk or is environmental performance just a disadvantageous cost that increases such risk levels for these firms? Answers to this question have important implications for the management of companies and the investment decisions of individuals and institutions. The (...) purpose of this paper is to examine the relationship between corporate environmental performance and firm risk in the British context. Using the largest dataset assembled so far, with community and environmental responsibility (CER) rankings for all rated UK companies between 1994 and 2006, we show that a company's environmental performance is inversely related to its systematic financial risk. However, an increase of 1.0 in the CER score is associated with only a 0.028 reduction in its β. (shrink)

We study the sources of resistance to change among firms in the Canadian petroleum industry in response to a shift in societal level logics related to corporate environmental performance. Despite challenges to its legitimacy as a result of poor environmental performance, the Canadian petroleum industry was divided as to how to respond, with some members ignoring the concerns and resisting change (i.e., laggards) while others took action to ensure continued legitimacy (i.e., leaders). We examine why (...) organizations within the same institutional field responded differently, delaying the industry response. We found that one population of firms was aligned with increasing pressures from its stakeholders for improved environmental performance, and the other was influenced by local cultural, political, and economic ideals less demanding of environmental actions. Our results reveal that several factors both at the institutional field level and the organizational level affected how these two populations reacted to a changing societal logic. Implications for theory, practice, and future research are discussed. (shrink)

This papers attempts to bridge business ethics to corporate social responsibility including the social and environmental dimensions. The objective of the paper is to suggest an improvement of the most commonly used corporate environmental management tool, the Life Cycle Assessment (LCA). The method includes two stages. First, more phases are added to the life-cycle of a product. Second, social criteria that measure the social performance of a product are introduced. An application of this “extended” (...) LCA tool is given. (shrink)

Corporate social responsibility becomes more and more prevalent in the business world and is considered as one of the factors to make purchase intentions by customers. Thus, corporations are obliged to implement CSR initiatives to attract their customers. Generation Z is born in the world with the internet and social media. They are more able to handle technology and reply on the internet or social media to receive or search for information. They are more concerned with social issues (...) or environmental problems. Therefore, CSR is one of the considerations when they make purchase decisions. This study is to explore whether CSR affects Generation Z purchase intentions in the food industry and which CSR categories have impacts on the purchase intention of Generation Z. A survey was used to collect the data from the youngsters at a post-secondary education institution. The findings showed that Generation Z will consider the CSR performance of the corporations in the food industry when they made purchase decisions. Most of the CSR initiatives, except shareholder related initiatives, had impacts on purchase intention. This may be due to the characteristics of Generation Z. (shrink)

This book is compiled based on the research methodology and technical approach applied in the Blue Book of Corporate Social Responsibility. It consists of five parts: Summary, index, Industry, Case Studies, and Appendices. The index evaluates Chinese enterprises annually on their performance in CSR management and the level of information disclosure by assessing four different aspects: responsibility management, economic responsibilities, social responsibilities and environmental responsibilities. Moreover, it identifies and analyzes phase-specific characteristics of CSR development in (...) China in the hope of providing references for further studies on Chinese CSR. (shrink)

In response to increasing concerns about environmental degradation, companies started to introduce actions that portrayed their attentiveness to these issues. This commitment, however, hardly translates into actual improvements in corporate environmental performance and outcomes, which leads to accusations of greenwashing. In this conceptual paper, I use the idea of loose coupling to offer an alternative explanation of the disconnection between corporate environmental commitments and outcomes. Whilst companies are often perceived as rational and well-integrated bureaucracies, (...) they, in fact, consist of subassemblies that are simultaneously coupled and responsive yet hold a certain degree of separateness and independence. Such loose coupling isolates an organisation from the external environment and gives the external stimuli only limited access to the system, allowing an organisation to persist. Such an understanding of organisations indicates that greenwashing might result from loose coupling caused by causal indeterminacy as well as a fragmented external and internal environment. (shrink)

Recent years have seen abundant literature, in law and the social sciences, addressing the significance of "soft law," "self-regulation," and "private law-making" and analyzing the potential implications of "governance" in general for the trajectory of law. This Article is grounded in and oriented towards this broad theoretical and conceptual terrain by pointing at empirical phenomena that mark a shift towards market-embedded forms of social regulation. I specifically discuss the Equator Principles, a self-regulatory blueprint for overseeing the social and environmental (...) performance of project-finance initiatives. I argue for an understanding of the process in terms of a general moralization of markets, in and of itself a product of neo-liberal conceptions of governance. I posit that one implication of this process is that socially-oriented norm-making and norm-enforcement merge with the instrumental and utilitarian logic of markets. (shrink)

Today, more corporations disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability. What information do corporations disclose on their websites? This paper investigates the environmental management policies and practices of the 200 largest corporations in the world. Based on a content analysis of the environmental reports of Fortune’s Global 200 companies, this research analyzes the content of corporate environmental disclosures with respect to the following seven (...) areas: environmental planning considerations, top management support to the institutionalization of environmental concerns, environmental structures and organizing specifics, environmental leadership activities, environmental control, external validations or certifications of environmental programs, and forms of corporate environmental disclosures. (shrink)