Corporate Environmental Practices Research Articles

Research on Corporate Environmental Responsibility Practices of Multinational Corporations in Developing Countries—The Case of U.S. Multinational Corporations

The practice of environmental responsibility of multinational corporations (MNCs) in developing countries is of great significance for sustainable development. This study aims to explore the practice path of MNCs in fulfilling their corporate environmental responsibility in developing countries, and to analyze the challenges they face and the achievements they have made. Through field research and case study analysis, a series of feasible suggestions are put forward to promote the practice of environmental responsibility of multinational corporations in developing countries by combining relevant theories and practical experiences.

Are digital trends driving corporate environmental, social, and governance practices? Evidence from China

AbstractThis paper aims to explore whether the trend of digital transformation is driving companies to engage in environmental, social, and governance (ESG) practices. The impact of strategic transformation on firms is all‐encompassing, making it difficult to capture the mechanisms of impact on corporate ESG practices. To this end, we construct a new theoretical framework that combines slack resources and stakeholder theory. This framework attributes the heterogeneity of ESG practices to differences in the ability and willingness of companies. Using data from Chinese listed companies, we find that the digital transformation is improving ESG performance. The mechanism is that digital transformation increases the availability of long‐term slack resources and strengthens the connection with stakeholders. However, there is insufficient evidence that digital transformation contributes to greater transparency in corporate disclosure. We also find that this effect is larger for firms with less risk‐responsiveness and firms with international connections, but smaller for firms with political connections. Our findings affirm the advantages of contemporary trends in corporate digital transformation for ESG practices and offer a new theoretical framework to investigate the factors influencing ESG practices.

Normative institutional pressures and corporate green development: evidence from a quantile regression approach

ABSTRACT This study explores the often-overlooked role of environmental non-governmental organizations (ENGOs) as catalysts for sustainable practices; it unravels the impact of normative institutional pressures (NIPs) on corporate green investment (CGI). By employing the innovative panel quantile regression (PQR) methodology, this research goes beyond conventional approaches to shed light on the non-monotonic association between NIPs and corporate green investment (CGI) among Chinese listed companies (2009 − 2019). Research findings contribute to the literature on institutional forces and corporate environmental sustainability practices. Meanwhile, policymakers may consider developing frameworks that encourage partnerships, knowledge-sharing, and joint initiatives between the corporate sector and ENGOs.

Unveiling the Impacts of Corporate Environmental, Social, and Governance Disclosure

Amidst heightened scrutiny of corporate environmental, social, and governance (ESG) practices, this study employs threshold techniques combined with artificial neural networks to examine the impact of ESG disclosure on companies, emphasizing its pivotal role in promoting sustainability. Analyzing data from Taiwan’s 20 industries from 2012 to 2022, it finds that while ESG engagement positively influences financial performance, it also underscores the vital connection between corporate practices and sustainable development. This analysis explores the relationship between carbon emissions, operating expenses, and financial performance in the overall sample and a threshold sample based on a threshold variable. In the overall sample, carbon emissions significantly increase operating expenses, accompanied by other influential variables. Introducing a threshold value of firm size alters the dynamics, showing a positive and more pronounced impact in the threshold sample. The examination of financial performance metrics reveals significant positive associations with carbon emissions, particularly when the threshold is not met or exceeded. Intriguingly, subgroup analysis indicates a negative association between carbon emissions and financial performance within the larger-size subgroup, in stark contrast to a more pronounced positive relationship observed in the smaller-size subgroup. Furthermore, the developed ANN model exhibits robust learning capabilities, underscoring its efficacy in capturing complex patterns within the data. It suggests its potential as a reliable tool for accurately predicting carbon emissions across diverse scenarios, facilitating informed decision-making and policy formulation to mitigate environmental impact.

Pengaruh Perubahan Kebijakan Hukum Perseroan Terhadap Isu Keberlanjutan Bisnis

This research aims to analyze the impact of changes in company legal policies on business sustainability issues in the current business environment. The focus of the research is on legal policy aspects related to the company, by identifying the impact of these changes on sustainable business practices. Through document analysis and case studies, this research explores the implementation and impact of new legal policies on business sustainability practices. It is hoped that the research results will provide insight into how legal regulations influence company strategies in managing sustainability issues, including corporate social responsibility and environmental practices. The practical implications can help companies adapt strategies to regulatory changes, strengthening commitment to sustainable business practices amidst the dynamics of an ever-evolving business environment. In conclusion, changes in corporate legal policies can have a significant impact on business sustainability issues, and this research makes an important contribution to the understanding and adjustment of business practices in an era of regulatory change.

Exploring How Environmental Accounting Impact Company Value: A Literature Review

This research aims to adress the persistent environmental challenges in Indonesia, drawing attention to its low Environmental Performance Index (EPI) ranking and escalating carbon emissions. Despite governmental regulations, many corporations continue to inadequately comply. By using the literature review method, this research explores the contemporary understanding of corporate environmental practices and their impact on corporate value, revealing inconsistent findings. The study emphasizes the potential positive impact of effective environmental management, urging companies to view environmental costs as strategic investments in corporate reputation and long-term value. In conclusion, the study advocates for future research to delve into the intricate mechanisms through which environmental factors influence corporate value across industries, regions, and emerging trends in sustainable finance. This research aspires to provide valuable insights for refining policies and business practices in Indonesia, fostering sustainable development and environmental responsibility

Corporate environmental disclosure and sustainability governance practices among listed manufacturing firms in Nigeria

Corporate environmental disclosure and sustainability governance practices among listed manufacturing firms in Nigeria

Do environmental CSR practices promote corporate social performance? The mediating role of green innovation and corporate image

This article examined how Environmental Corporate Social Responsibility (ECSR) activities directed through green innovation influence corporate image and corporate social performance. The stakeholder theory was used to examine how stakeholders' expectations affected environmental CSR, green innovation activities and how corporate innovation initiatives affected corporate image and corporate social performance. Corporate environmental practices refer to the entire process of adopting technologies and product designs for protecting and sustaining natural resources. Selected companies in Ghana were used for this study. The study employed a cross-sectional quantitative approach where data from employees were collected across six months. This study used structural equation modeling (SEM) to test the effects of environmental CSR on social performance through mediators: green innovation and corporate image. The empirical findings demonstrate that corporate environmental CSR practices have an impact on the development of green innovations that promote companies' social performance. Additionally, evidence from the findings supports that corporate image influences companies’ social performance in Ghana. Furthermore, the findings from the study demonstrate that corporate environmental CSR enhances corporate social performance through green innovation and corporate image. The study recommends green innovation adoption to improve CSR practices, corporate image and corporate social performance.

Unlocking the effect of corporate environmental practices in driving firms’ financial performance

Unlocking the effect of corporate environmental practices in driving firms’ financial performance

The impact of corporate environmental management practices on environmental performance

AbstractThis 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.

Environmental Awareness of Enterprises through Their Disclosure Magnitude: UK and US Evidence

In the absence of a validly mandatory public policy and a meaningful conceptual framework, corporate environmental disclosure practices have been diverse (Matthews, 1993). In other words, the lack of a single generally accepted standard in which environmental reports can be developed, akin to that of financial reporting principles, is one of the reasons for this undoubted dissimilarity in environmental reporting practices. However, there are imperative requirements relating to environmental information disclosure in many developed countries, for example, environmental related information is required in the Business Review in accordance with s.417 of the Act (Great Britain. Companies Act 2006) in the UK and the US Securities and Exchange Commission (SEC) has developed rules governing disclosure of environmental liabilities, in relation to Items 101, 103, 303 and 503(c) in SEC Regulation S-K (SEC, 2008). The former is rather vague as it is not underpinned by a robust speculative structure, whereas the latter has only focussed on the disclosure of financial information that is environmentally related despite the non-financial nature of predominant environmental information. In response to these, the International Accounting Standards Board (IASB) and The International Sustainability Standards Board (ISSB) has very recently issued the foundational standards, which are IFRS S1 and IFRS S2, to steer corporate sustainability-related disclosures worldwide. The former inaugurally provide general conceptual foundations and the latter has primarily pointed on climate risks and opportunities. The other dimensions are forsaken to line up sometimes in the future. Keywords: Environmental Information Disclosure, Environmental Reporting, Disclosure Quantity, UK, US

Can CEO environmental awareness promote new product development performance? Empirical research on Chinese manufacturing firms

AbstractDespite the growing interest in the role of chief executive officers' (CEOs') environmental awareness in enhancing performance, its impact on new product development (NPD) performance, as well as the underlying mechanisms and contextual bounds of the impact, remains unexplored. Based on upper echelons theory, we suggest that CEO environmental awareness promotes NPD performance through corporate environmental practice. We further theorize that the role of CEO environmental awareness is contingent on environmental institutional pressure. To validate the model, we collected survey data from 534 senior executives of 178 manufacturing firms in China. The main results show that corporate environmental practice completely mediates the relationship between CEO environmental awareness and NPD performance. The relationship is positively moderated by environmental normative pressure, whereas environmental regulatory pressure negatively moderates this process. Theoretical and practical implications of how to leverage CEO environmental awareness and environmental institutional pressure to boost NPD performance are discussed.

Corporate environmental disclosure in Europe: the effects of the regulatory environment

Purpose This paper aims to assess the impact of regulatory changes on corporate environmental disclosure practices in Europe. More specifically, the authors perform a difference-in-differences analysis to study the impact of the Paris agreement (United Nations Climate Change Conference, COP21) and of the French Law 2015-992 on energy transition for green growth. Design/methodology/approach The sample consists of the listed companies belonging to the Euro Stoxx 50 index, and they are analysed over the 2010–2019 time horizon by means of an expert validated environmental disclosure dictionary and difference-in-differences analysis. Findings The main results show that both regulatory interventions contributed to improving corporate environmental disclosure. The authors also show that firms belonging to the most polluting sectors tend to provide more information on environmental matters, likely in an attempt to divert stakeholders’ attention. Originality/value By analysing an under-investigated topic, the paper calls for significant efforts by regulators to find the most suitable solutions to induce firms to increase their levels of transparency on the impact of environmental risks and on how these risks are managed.

Corporate Sustainability Orientation, Sustainable Development Practices, and Firm Performance of MSMEs in Malaysia.

Over the past two years, the Covid 19 pandemic was the greatest communicable outbreak that has upended almost every aspect of our lives. Despite this, the progress in realizing sustainable development remains as a challenge in the global perspective and yet it should be eliminated. The world is facing a pragmatic threat of climate change which potentially damage the Earth’s ecosystems. There is a need for all relevant parties to cooperatively care for the environment in decreasing the environmental degradation and climate change in achieving sustainability to leave no one left behind. Our study highlights the perception of the firm at firm-level that can link environmental sustainability practices and firm performance, especifically in the Micro, Small and Medium Enterprises (MSMEs). Hence, in this study, we will examine how corporate sustainability orientation influences firm performance, and how corporate sustainability orientation influences firm performance through environmental practices with the use of the Natural Resource-based View (NRBV) theory and Stakeholder theory. This study uses a judgmental sampling method with a set of criteria to have an accurate result for the study. A total of 219 responses were collected and this study uses a Partial Least Squares – Structural Equation Modeling (PLS-SEM) approach in data analysis. From the analysis, both corporate sustainability orientation and environmental practices were found significant, while the relationship between corporate sustainability orientation and firm performance was found significant through the indirect effect. For future studies, this study suggests researcher to explore corporate sustainability orientation in the perspective of firm-level and individual-level to have a comparison in terms of perception towards sustainability practices and how it impacts the firm performance.

The impact of corporate environmental disclosure practices and board attributes on sustainability: Empirical evidence from Asia and Europe

This study analyzes the impact of environmental disclosure, board attributes, and firms' specifics on the levels of environmental and ESG performance in Europe and Asia. The study utilizes secondary data from Refinitiv Eikon database for 8094 firms for the period between 2016 and 2021. The study employs panel data analysis using fixed effect models to estimate the results. The findings suggest that disclosure on emissions, innovations, environmental controversies, environmentally friendly products, proactive environmental investments, environmental expenses, and fines charged by authorities have a positive and significant influence on the level of firms’ environmental and ESG performance. Furthermore, the study identifies board tenure, independence, size, and meetings as being associated with greater levels of environmental disclosures, reporting, and sustainability score. However, board diversity is found to have a limited contribution to environmental disclosures, especially in Asian countries. Additionally, the results reveal that companies with higher revenue growth, larger size and market capitalization, and better performance have greater and better disclosure of environmental and sustainability issues. The study provides practical implications for policymakers to establish comprehensive guidelines for environmental and sustainability reporting based on the analysis of institutional, regulatory frameworks, legislation, and sustainability score enforcement status of the country.

Labor Market Institutions, Environmental Disclosure, and Environmental Impacts

ABSTRACT We examine how country-level labor market characteristics affect corporate environmental disclosure practices and the environmental impacts of firms’ operations. Using a sample of firms from 36 countries over the 2005–2016 period, we show that firms domiciled in countries with more developed labor markets have higher levels of environmental disclosure and less damaging environmental impacts than firms in countries with less developed labor markets. In addition, we find that firms operating in countries with better-developed labor markets tend to reduce their environmental impacts through the purchase of goods and services rather than through substantive changes to their own operations. Taken together, the findings suggest that better-developed country-level labor market institutions play an important role in improving firms’ environmental disclosure and in reducing their environmental impacts.

Are corporate environmental, social, and governance practices contagious? The peer-effect perspective

Environmental (E), social (S), and governance (G) concepts have become a global consensus. Therefore, exploring the motivation mechanism adopted by companies to carry out ESG practices to promote sustainable social and economic development is of far-reaching significance. This study investigated whether there was a peer effect in the ESG practices of A-share listed companies and explored its mechanism of action and economic consequences using the data of Chinese A-share listed companies from 2010 to 2021. The empirical results show that there is a significant regional and industry peer effect on the ESG practices of A-share listed companies, which still holds when the average stock trait return is used as the instrumental variable. Furthermore, the mechanism test indicates that the information learning motive and agency cost are potential reasons for the peer effect of ESG practices. On the one hand, followers with information disadvantages tend to imitate the ESG practices of leaders with information advantages, but the converse is invalid. On the other hand, a worse external information environment leads to a higher degree of uncertainty, while a higher agency cost leads to a stronger peer effect of ESG practices. Lastly, the peer effect of corporate ESG practices helps create corporate value and increases corporate risk-taking to some extent. This paper provides a new micro perspective for understanding the occurrence mechanism and economic consequences of ESG practices, as well as crucial empirical evidence for firms to make sustainable development investment decisions.

Organization capital and green innovation: Evidence from China

AbstractWe investigate the impact of organization capital on green innovation. Using the sample of Chinese A‐share listed firms from 2008 to 2020, we find evidence that the organization capital significantly improves green innovation. And this effect is more pronounced in firms with greater environmental regulatory pressure, more media attention, less financing constraints and in non‐state‐owned firms. Through simultaneous equation model and mediation analysis, we find that organization capital improves corporate social responsibility via green innovation. Our results are robust to endogeneity issues, alternative variables measurement, model specifications, and estimation methods. This paper contributes to the understanding of the role of organizational resources in influencing green innovation and corporate social responsibility, and helps promote corporate green transformation and environmental practices.

Exploring the role of language in shaping corporate environmental practices

While heterogeneity in languages has been shown to explain the variation in environmental behavior at the individual and country levels, we do not know whether these language effects also shape the behavior of firms. To address this gap, our study examines the relationship between corporate environmental behavior and language structure around the world. Using a large dataset of 26,390 observations over the 2007–2015 period, we find that firms’ environmental damages are lower where speakers are required to grammatically distinguish between future and present events (i.e., strong future time reference). Our findings suggest that perceiving future events as more distant and precise in time may help corporate managers better understand the consequences of environmental damages and take actions to reduce their impact. Language structure therefore appears to be a determinant of corporate environmental performance.

Drivers of corporate environmental and social responsibility practices: A comparison of two moderated mediation models

This paper adds to CSR, environmental management and strategy literature by examining motivating and enabling factors of corporate environmental and social responsibility practices. We develop and compare two moderated mediation models – one related to the environmental (Study 1) and the other to the social (Study 2) dimension of sustainability. Survey-based data collected from 236 companies in Study 1 and 219 companies in Study 2 along with data on firm financial health from an external source are used. In both models, the moral motives of “doing the right thing” have stronger effects on environmental/social responsibility strategy, which then acts as an important mediator for translating those motives into specific environmental/social practices. Moreover, financial health negatively moderates the strategy–practices relationship in the environmental model, while its moderation role is not significant in the social model, suggesting that sustainability practices are not necessarily limited to financially healthy firms. Our research casts fresh light on the (N)RBV and stakeholder theories, proposing their integration when discussing corporate environmental/social sustainability models.