Controversial Industries Research Articles

In the arena of debate: a systematic literature review on sports sponsorship by controversial industries

PurposeThis systematic literature review examines the domain of sports sponsorship involving controversial industries. We delve into the shared patterns, differences and overarching themes prevalent across various dark consumption industries (i.e. alcohol, food and beverages high in fat, salt and sugar, gambling and tobacco).Design/methodology/approachThis study systematically reviews research on controversial sports sponsorships (CSS). Literature searches in Web of Science and Scopus, and additional searches in reference lists resulted in a total of 90 publications meeting the inclusion criteria, which can be grouped into three research clusters: prevalence, impact and (in)appropriateness of CSS.FindingsThis review revealed a high prevalence of so-called controversial sponsors in sports, particularly in – but certainly not limited to – soccer. Especially gambling sponsorships have become more prominent in recent years. Ethical concerns surfaced since CSS are positively related to attitudes, preferences, purchase intention and consumption, potentially causing health-harming consequences for children and adults.Practical implicationsThis study provides scholars and practitioners with insights to advocate for policy measures curbing CSS.Originality/valueIn light of the identified research gaps, we propose a research agenda to particularly investigate causal relationships between exposure to CSS and its impact by conducting longitudinal and experimental research. Additionally, we propose to establish a consumer-centered framework for processing CSS.

Institutional investment in addictive industries: an important commercial determinant of health.

The production of addictive commodities is subject to a range of commercial determinants. There has nevertheless been a gap in understanding how investments into addictive commodities may function as commercial determinants. Institutional investors can yield important financial power with their investment decisions. Many investors apply responsible investment (RI) policies to address environmental, social, and governance concerns. Negative screening is used to exclude certain sectors or companies from investment portfolios, mainly for ethical concerns. Negative screening also affects investment into tobacco and other addictive industries. This article investigates RI policies toward addictive industries among institutional investors that are signatories of the Tobacco-Free Finance Pledge (TFFP; N = 161). The TFFP is an initiative created in 2021 to de-normalize tobacco-related investments. The mixed-method study uses descriptive statistics to quantify the extent and scope of exclusion policies as well as institutional and geographical profiles of investors, and a qualitative analysis of the justifications for these exclusion policies. Some TFFP signatories apply negative screening to other addictive industries (gambling: 35%; alcohol: 24%; cannabis 12% of signatories). There are important differences in the applied exclusion thresholds, with only 47% of TFFP signatories applying a zero-tolerance policy to tobacco. Thresholds are higher for other addictive industries. Signatories also differ in terms of their geographical and investor profiles. Justifications pertaining to compliance with international standards and reputational risks were the most common. Addictive industries, such as tobacco, alcohol, gambling, and recreational cannabis, are increasingly excluded by investors. However, different understandings of RI influence how sector exclusions are implemented. Divesting from tobacco and other addictive industries is a crucial step toward a public health approach that prioritizes population health over financial profits. Prominent institutional investors are influential opinion leaders who can change the behavior of other investors and de-normalize controversial industries and reduce or prevent harm.

Usos actuales de tecnología en los procesos de producción y mercadotecnia de la industria de la moda

Globally, the fashion industry is currently a controversial industry in terms of production practices. So far, no basis has been found to guide the process on the use of technology, from the beginning of the value chain to its marketing. The methodology for this literature review was: 1. Determination of keywords, 2. Search in databases, 3. Review of titles and abstracts for incorporation, 4. Full review of selected articles. As results, the challenges of their use and their rela-tionship to sustainability are presented

AI ethics in a controversial industry: the case of gambling and its ethical paradox

AI ethics in a controversial industry: the case of gambling and its ethical paradox

Corporate social responsibility in controversial industries: A literature review and research agenda

AbstractThis study reviews the extant literature about corporate social responsibility (CSR) activities of companies operating in controversial industries. We analyze 88 articles guided by the overall question of how such companies integrate CSR into their business practices, which topics are addressed, and what the effects of these engagements are on various stakeholders. We use Maon et al.'s (2009) integrative framework to structure our analysis and develop a research agenda. Our review suggests that controversial companies' motivations are not altruistic, but largely market‐based and reactive. No studies indicated that firm mission or values underpinned the motivation for undertaking CSR programs. We also found that the perspective of employees was underrepresented. Moreover, a large number of the articles (44.3%) in our dataset dealt with communication‐related topics, neglecting many other areas of the CSR process.

High-quality assurance, ESG legitimacy threats and board effectiveness

This study aims to investigate whether companies engage high-quality assurance in response to legitimacy threats caused by media coverage of negative sustainability events. Since responsive strategies designed to maintain or repair legitimacy directly emanate from boards, the paper also analyses whether board effectiveness reinforces defensive strategies to maintain a company's reputational capital and public image under environmental, social and governance (ESG) concerns by supporting high-quality sustainability assurance. Using a sample of STOXX Europe 600 index firms from 2015 to 2020, the empirical results confirm the substantive role of assurance. When a company's legitimacy is at risk due to media coverage of ESG misconduct, the assurance of sustainability information is employed as an instrument to aid in repairing the company's legitimacy. In addition, our results confirm that boards with desirable attributes of independence and activity act jointly with assurance quality to legitimise companies. In addition, this paper also brings evidence about the mediating effect of board effectiveness; the impact of negative media ESG coverage on sustainability assurance quality appears to be justified by the effectiveness of the board. The evidence also points to interesting findings concerning controversial industries and countries with tight cultures, where the assurance quality seems not to respond to the legitimacy threats associated with media coverage of undesirable ESG. However, and after studying how the European Directive 2014/95/EU affected the symbolic use of assurance, results confirm that there are no significant differences in the legitimising use of assurance quality after irresponsible ESG actions before and after the directive, and neither, depending on the level of sustainability performance or public enforcement.

Sin Stocks and SEC Filing Reviews

In this study, we examine whether and how SEC regulators adjust their oversight processes when there are conflicting risks, specifically among sin stock firms operating in potentially controversial industries, such as alcohol, gaming, and tobacco. On the one hand, we would expect increased scrutiny from SEC staff if they believe that companies willing to offer these sin-related products and services are more likely to skirt SEC disclosure guidelines. On the other hand, if the SEC staff leverage the additional scrutiny these firms are already subjected to from investors, industry regulators, and auditors, we would expect decreased scrutiny from SEC staff. Consistent with the latter, we observe that the SEC is less likely to issue comments on the annual report of sin stock firms. Among those receiving a comment letter, there are no statistically significant differences in rigor or tone, on average. In additional analyses, we find limited evidence that specific reviewer characteristics are associated with differential treatment for sin stock firms in terms of rigor. Finally, we find that among firms that did not receive a comment letter, sin stock firms are less likely to restate their financial statements in the future. Collectively, we interpret this evidence as the SEC efficiently reducing scrutiny on sin stock firms, relative to non-sin stock firms, during the earlier phases of the review process, with minimal differences in the later phases of the review process.

Reporting controversial issues in controversial industries

PurposeThis article explores how companies in multiple controversial industries report their controversial issues. For the first time, the authors use a new conceptualization of controversial industries, focused on harm and solutions, to investigate the reports of 28 companies in seven controversial industries: Agricultural Chemicals, Alcohol, Armaments, Coal, Gambling, Oil and Tobacco.Design/methodology/approachThe authors thematically analyzed company reports to determine if companies in controversial industries discuss their controversial issues in their reporting, if and how they communicate the harm caused by their products or services, and what solutions they provide.FindingsFrom this study data the authors introduce a new legitimacy reporting method in the controversial industries literature: the solutions companies offer for the harm caused by their products and services. The authors find three solution reporting methods: no solution, misleading solution and less-harmful solution. The authors also develop a new typology of reporting strategies used by companies in controversial industries based on how they report their key controversial issue and the harm caused by their products or services, and the solutions they offer. The authors identify seven reporting strategies: Ignore, Deny, Decoy, Dazzle, Distort, Deflect and Adapt.Research limitations/implicationsFurther research can test the typology and identify strategies used by companies in different institutional or regulatory settings, across different controversial industries or in larger populations.Practical implicationsInvestors, consumers, managers, activists and other stakeholders of controversial companies can use this typology to identify the strategies that companies use to report controversial issues. They can assess if reports admit to the controversial issue and the harm caused by a company's products and services and if they provide solutions to that harm.Originality/valueThis paper develops a new typology of reporting strategies by companies in controversial industries and adds to the theory and discourse on social and environmental reporting (SER) as well as the literature on controversial industries.

Measuring the implementation of the Sustainable Development Goals by companies listed on the Warsaw Stock Exchange in the light of the UNCTAD-ISAR guidance

Purpose: The article has two related purposes. The first is to identify the indicators used to measure the implementation of the Sustainable Development Goals (SDGs) in the integrated or non-financial reports of companies listed on the Warsaw Stock Exchange (WSE) using the methodology of the Intergovernmental Working Group of Experts on International Accounting and Reporting Standards (UNCTAD-ISAR). The second objective is to determine the factors that affect the number of SDG indicators disclosed by listed companies.Methodology/approach: The study covers the 62 reports of listed companies on the WSE for 2020 and 55 reports for 2019 (random selection). The following research methods were used: analysis of the content of reports and selected methods of descriptive and mathematical statistics (linear multiple regression and nonparametric U Mann-Whitney test).Findings: The companies disclosed, on average, few SDG indicators in their integrated report or non-financial report, i.e., 11 of the 33 adopted in the UNCTAD-ISAR guidance. The most indicators of this type included in the integrated report of a very large company was 21. The study results indicate that the number of disclosed measures of SDGs depends on company size, the type of report, and the company’s activity in controversial industries. Including a company in the WIG-ESG index does not affect the number of measures presented by the company.Research limitations/implications: The limitation of the study is the small research sample and the inclusion of only companies listed on the WSE.Originality/value: A novelty in the study is the inclusion of the UNCTAD-ISAR guidance and linking disclosures by companies in their external reports with the measurement of implementation of global SDGs.

Job Embeddedness and Organizational Commitment In Controversial Industry: Mediating Role Of Collectivism

Job Embeddedness and Organizational Commitment In Controversial Industry: Mediating Role Of Collectivism

Board gender diversity and ESG decoupling: Does religiosity matter?

AbstractIn this paper, we examine the relationship between board gender diversity and environmental, social, and governance (ESG) decoupling and the moderating effect that religiosity has on this relationship. We utilise an international sample of 26,176 firm‐year observations that cover the period from 2005 to 2019. Consistent with the upper echelon theory and the gender socialisation theory, we provide evidence that firms with a more gender‐diversified board of directors tend to engage less in ESG decoupling, and this relationship is more pronounced among firms domiciled in countries with a low level of religiosity. We also find that the effect of religiosity on the relationship between board gender diversity and ESG decoupling is more pronounced for firms that engage in greenwashing and those operating in controversial industry sectors. Our study contributes to the growing debate on ESG decoupling, offering policy insights to regulators and policymakers into the role of board gender diversity and religiosity in reducing unethical managerial behaviour.

Sustainability and firm value in the oil and gas industry—A vicious circle?

AbstractThe relationship between sustainability (or CSR) and company value has been intensively researched in recent times. However, the specifics of individual industries have not been sufficiently taken into account. Our study aims to fill this research gap. We focus on the oil and gas industry as a particularly powerful and controversial industry. Based on legitimacy theory and institutional theory, we argue that the relationship between firm value and sustainability is negative in this industry. Our sample consists of 205 firms with 1515 observations. Using a simultaneous equation system (3SLS) to determine its direction, we find the two to be negatively interrelated in a vicious circle. Furthermore, we find evidence for a moderating role of the renewable energy share of a company's headquarter country as well as the company's industry segment. The explanatory power continues to hold with consideration of a profitability measure (Return on Sales) instead of firm value.

Clearing the Smoke: Regulations, Moral Legitimacy, and Performance in the U.S. Tobacco Industry

Considering recent theoretical discussions about the concept of moral legitimacy, this study advances our understanding of its performance consequences. Specifically, it uncovers the mediating role of moral legitimacy in the relationship between regulations and industry performance. Our analysis of the U.S. state-level data on regulations in a controversial industry between 1994 and 2010 yields four significant findings. The results show that regulations not only decrease performance but also negatively impact moral legitimacy. Moreover, this study provides empirical evidence that moral legitimacy is positively related to industry performance, providing much-needed direct support for this premise. Importantly, the results indicate that moral legitimacy mediates the effect of regulations on performance, but only when regulations are aligned with moral values. Overall, this study extends our understanding of how regulations influence moral legitimacy, and in turn impact industry performance.

Sustainability restatements, firm risk and controversial industries: Analysing the signals based on revision type

AbstractThis study analyses the relationship between sustainability reporting and firm risk by investigating the correlation between sustainability restatements and stock return volatility. Regression models, employed on a sample of 1580 sustainability reports by 353 European companies, evidence the risk relevance of restatement issuance. Investors interpret different signals, reacting with diverse feedbacks, based on the type of revision and whether the firm belongs to controversial industries or not. In general, restatements decrease firm risk when their purpose is to update reporting methodologies, while the opposite effect occurs when they amend errors and omissions. For companies operating in controversial industries, both types of sustainability restatement increase firm risk, with a stronger correlation when revisions redress errors or omissions. Given that sustainability reporting is still characterised by frequent standard and methodology updates, that often lead to the issuance of restatements, this study presents insights for companies and investors.

Were we prepared to face a pandemic? Exploring companies' CSR disclosure on social media before COVID-19 outbreak

PurposeA model on the cognitive elements of engagement is adopted and content analysis, along with sentiment analysis, has been used to explore the post characteristics and the levels of stakeholders' interactions in controversial and non-controversial European industries through three Poisson regressions. At last, an ANOVA test has been used to check the level of interaction regarding the coronavirus disease 2019 (COVID-19)-related aspects.Design/methodology/approachThe intrinsic characteristics of controversial industries cause the stakeholders’ skepticism about their corporate social responsibility (CSR) strategies. This results in the need to elaborate proper involvement strategies to approach industries' stakeholders. Such need has assumed relevance during the COVID-19 crisis and has traced a certain border between the companies that are more sensitive to the social side of the surrounding environment and the ones that are less involved in risky sectors. The present paper aims to understand the role of social media in stakeholder engagement, and social media's characteristics, and tries to elaborate on companies' CSR communication readiness to the challenges shown by the pandemic.FindingsThe study reveals how the success of stakeholder engagement in CSR communication is affected by both controversial sector membership and the characteristics of the posts such as the inclusion of the sustainable development goals (SDGs). In addition, the study emerges how the European companies have focused on social aspects in companies' communication, revealing a certain readiness for the COVID-19 challenges.Practical implicationsBuilding on a model of cognitive elements of engagement, the present study provides useful insights for companies' next engagement strategies on social media. Moreover, the thematic analysis provides a benchmark for the improvement of current corporations' communication strategies in light of the pandemic effects.Originality/valueThis paper contributes to the literature by investigating the role of Twitter as a stakeholder engagement tool and identifies the drivers for an effective Twitter content strategy. Moreover, the paper provides a useful proxy for current and future research on the COVID-19-related CSR communication.

Doing bad by doing good? Corporate social responsibility fails when controversy arises

While the benefits of CSR may offer suppliers a competitive advantage in their customer market, CSR remains a paradox as firms struggle to strike a balance between the financial, social, and environmental interests of stakeholders. Such confliction is greatly intensified for firms whose core business and/or marketing communications contradict the general social and environmental interests of the society. Considering theories and concepts borrowed from consumer behavior that appear to have been influential in explaining pertinent B2B buyer purchasing decisions, this paper empirically investigates the contingency conditions underpinning CSR and its communication effect on organizational customer outcomes. Our results, based on panel data from Kinder, Lydenberg, and Domini (KLD) and Compustat database, suggest that on average B2B firms' CSR communications significantly enhance their firm value; however, this value enhancing effect is attenuated when controversies weigh in on firms' industry and/or corporate reputations. Specifically, CSR communications have significantly positive impact on firms in regular settings, but the impact becomes negligible or even negative for firms operating in controversial industries or firms face controversial advertising problems. Theoretical and managerial implications of the research are provided.

Stakeholder Integrative Management for Reduced Inequality

With the context of a highly controversial industry on human rights, we attempt to clarify our stakeholder thinking concerning the moral development of the industry to address inequality. Just as previous studies found manager’s stakeholder relationships being influenced by ethical foundations of corporate cultures, this study qualitatively explores how stakeholder relationships unfold in value creation, having implications for MNC’s stakeholder culture and stakeholder integrative management for the industry moral and sustainable development.

Sustainability reporting tools: Examining the merits of sustainability rankings

Sustainability reporting tools (SRTs) are becoming increasingly prevalent as corporate social responsibility performance continues to be a key factor for establishing a firm's value and intangible assets such as reputation, legitimacy, and credibility. This study explores one particular SRT, corporate sustainability ranking lists. The methodologies of three ranking lists were examined to understand the similarities, differences, limitations, potential efficacy, and consistency in the way data are collected and evaluated. Our findings illustrate strong variances in the ranking methodologies, and in turn, the results such as the inclusion of controversial industries. We also observed inconsistencies in the way sustainability is understood and applied, bringing into question the merits of ranking lists as a meaningful SRT. As one of the few empirical studies on sustainability rankings, our paper contributes to SRT scholarship and practice.

Understanding the Practices of Strategic CSR in Controversial Industry: Case of Tobacco Company in Indonesia

How do tobacco companies take responsibility for social issues under the business existence on health problems and economic issues. The research focuses on a small amount of research in corporate social responsibility (CSR) duty under Tobacco Company. Through the Sampoerna Retail Community (SRC), PT HM Sampoerna Tbk shows a different takes problem-solving of CSR on controversial issues. Through qualitative research, the data, primary data (interviews and observations) and secondary data (documentation studies), coded and analyzed using keywords derived from theory. This study found that CSR in cigarette companies is a form of controversial industrial business strategy that departs from considering business processes' internal and external conditions. The results show SRC is a way for companies to be socially responsible by articulating external conditions (outside-in) dominated by public restrictions on tobacco products and as an internal strategy (inside-out) that departs from the logic of business sustainability. SRC is a form of company compliance with several state regulations, restricting cigarette products and preventing children's access to cigarettes as an outside-in strategy. In the inside-out context, SRC is the company's strategy to ensure all consumers can reach products, collaborating with Fast Moving Consumer Goods (FMCG) companies as an alternative to the uncertainty of controversial industry conditions, and reducing CSR costs.

Regretful or pressured? CSR reactions and disclosures of casinos in the aftermath of a natural disaster

Purpose Typhoon Hato attacked Macau in August 2017 and had caused fatalities and extensive damages. This study aims to analyze the reactions of the city’s six casinos after the natural disaster from the perspective of corporate social responsibility (CSR), with particular emphasis on finding out which stakeholders had they directed their support mostly. Design/methodology/approach Qualitative content analyses of press releases, social media, company reports and websites of the casinos in relation to the disaster and their CSR activities were conducted and examined in depth. Furthermore, triangulation of the qualitative data was achieved with quantitative data through a regression analysis. Findings It was found that most of the casinos’ activities were delivered in the forms of donations, rebuilding the community, supporting staffs and calling for volunteer work, thus largely targeting on the community and employees. Practical implications The study serves as a practical lesson for the casino operators to better plan and implement risk and reputational management and to better proliferate their socially responsible side of the gaming business to the public. It also helps casinos to ponder upon better crisis management methods so as to attain sustainability of the industry itself. Social implications The study explains the CSR activities of casinos, which are in a controversial industry, and attempts to explore why do they engage in CSR. It can be seen that the wrestle between social pressure and voluntarism will eventually institutionalize casinos and other controversial businesses in promoting more CSR in various aspects. Originality/value Combining some established institutional and socio-psychological theories, including the theory of planned behavior and the theory of regret regulation, the current work serves as an exploratory study to look into how and why Macau’s leading industry reacts in response to a natural disaster through CSR.