Corporate Sustainability Index Research Articles

Evaluation of the socioeconomic and environmental sustainability of banking institutions in Brazil using the Analytic Hierarchy Process with ratings approach

Abstract: Large banking institutions play an important role in sustainable development, especially owing to their size and capillarity. Therefore, the objective of this study is to compare sustainability indicators (economic, environmental, and social) published in the reports of some of these institutions that operate in the Brazilian market. The four banks selected for this study were the ones that published their sustainability reports in the 2017 Global Reporting Initiative standard, and that comprised the portfolio of the Corporate Sustainability Index, promoted by “Brasil, Bolsa e Balcão,” in 2018. These banks were Banco do Brasil, Bradesco, Itaú, and Santander. The analytic hierarchy process (AHP) with the use of ratings was used to carry out the research. After elaborating on the hierarchical structure of the problem, specialists, who were researchers in the field of sustainability, were required to weigh the degree of relevance of each of the indicators analyzed in this study. A ranking of the selected banks was then obtained in relation to their sustainability performances, which was based on the weights given to each indicator and the data available in the sustainability reports of each institution investigated. The banks were ranked in the following order: Itaú, Santander, Bradesco, and Banco do Brasil. The results of this study showed that there is room for evolution in relation to sustainability, mainly in the social department, in the banking sector. The AHP method with the use of ratings proved to be efficient, especially because it allowed for the weighing of the evaluation criteria and sub-criteria; this proved the usefulness of the method in comparing companies with regard to their sustainability performance.

Do stock investors in Mainland China care about corporate sustainability?

AbstractCorporate sustainability is an important issue in many parts of the world today. Many studies have pointed out that it will have an impact on share price performance. This article investigates the corporate sustainability aspect of the listed companies in the Mainland China A‐shares market. Our objective is to fill the gap in the previous studies conducted on Western markets and the Mainland China market. The constituent stocks in the Hang Seng (China A) Corporate Sustainability Index (HSCASUS) and the corresponding control stocks in the same industry were taken out and examined. The results of our study indicated that there was no significant relation between the stock return and corporate sustainability for the Mainland China A‐shares market. This research contributes to the promotion of corporate sustainability and provides a reference for the same topic in other emerging countries.

Qualidade da informação ambiental versus rentabilidade de empresas do setor elétrico listadas no ISE

A teoria dos stakeholders presume que os investimentos socioambientais resultam melhor desempenho financeiro, visto que refletem a preocupação da empresa com o meio ambiente e a sociedade. O presente estudo objetivou verificar a relação existente entre a qualidade da informação ambiental e a rentabilidade de empresas do setor de energia elétrica pertencentes ao Brasil Bolsa Balcão (B3) listadas no Índice de Sustentabilidade Empresarial (ISE). A amostra compreendeu 10 empresas brasileiras com ações negociadas na B3 no período de 2014 a 2017. Quanto à coleta de dados, utilizou-se: o Relatório de Sustentabilidade, o modelo Global Reporting Initiative (GRI), as Demonstrações Financeiras Padronizadas (DFPs) e informações econômico-financeiras extraídas no banco de dados do Sistema Economática®. A partir dos resultados evidenciou-se que as empresas têm o grau de acurácia médio ou alto, indicando boa qualidade de evidenciação. Ao aplicar a técnica estatística de regressão quantílica, percebeu-se que um maior nível de evidenciação dada pelo índice de acurácia não está associado às variáveis Lucros antes de Juros, Impostos, Depreciação e Amortização (EBITDA), Lucro antes do Imposto de Renda + Disponibilidade Financeira Líquida (LAIR+DLF), Margem Bruta, Earnings Before Interest and Taxes (Margem EBIT), Margem Ebitda, Rentabilidade do Ativo (RentAt) e Retorno sobre o Investimento (ROIC). No geral, os resultados indicaram a inexistência de relação entre a rentabilidade das empresas e as ações socioambientais.

O USO DE MÍDIAS SOCIAIS POR EMPRESAS LISTADAS NO ÍNDICE DE SUSTENTABILIDADE EMPRESARIAL

The corporate image is one of the most valuable resources for business sustainability. Considering a scenario of economic recession and greater demand for companies' social role, it is necessary to incorporate values of socioenvironmental responsibility. The purpose of this study is to analyze the use of social media by companies listed on the Corporate Sustainability Index (ISE, in portuguese), in order to verify the alignment between the message transmitted by these companies with the principles of corporate governance and corporate sustainability. Posts made during the period of one year on the main social networks (Facebook, Instagram and Youtube) of the 28 (twenty eight) companies that make up the ISE portfolio were analyzed. The results found indicate that Youtube is the channel where corporate responsibility messages are more frequent and have a higher volume of accesses. Regarding the engagement of companies listed on the ISE, companies in the financial sector stand out.

From strategic corporate social responsibility to value creation: an analysis of corporate website communication in the banking sector

PurposeIncreased public scrutiny and stakeholder pressure have given more importance to strategic corporate social responsibility (SCSR) and its three dimensions – orientation, process and value creation. At the same time, they provide banks the inspiration needed to pursue business goals, attain positive performances and communicate their social responsibility efforts. This paper analyses whether and how companies in the banking sector use corporate websites to communicate SCSR dimensions.Design/methodology/approachA content analysis was performed based on the corporate websites of leading banks included in the Dow Jones Sustainability World Index and the Hang Seng Corporate Sustainability Index to assess the prominence of SCSR communication.FindingsThe study shows that banks give less prominence to SCSR on corporate websites differently from companies belonging to other sectors, as they are less likely to expose their orientation to SCSR and pay slightly less attention to value creation than other companies.Practical implicationsThe paper provides theoretical insights into SCSR dimensions and how they are communicated on corporate websites. From a practical standpoint, the study provides guidance for managers in the banking sector aimed at improving their communication efforts, avoiding decoupling issues and adopting a consistent value creation perspective.Originality/valueFew studies have used a value creation perspective to differentiate between the dimensions of a SCSR approach. The paper fills this gap by assessing the communication efforts adopted by banks and insurance companies in this area.

This article is distributed under the terms of the creative commons attribution 4.0 international license1Universidade de São Paulo, São Paulo, SP, Brasil2Universidade de Fortaleza, Fortaleza, CE, BrasilReceived: 04/30/2019.Revised: 09/11/2019.Accepted: 02/29/2020.Published Online: 07/27/2020.DOI: http://dx.doi.org/10.15728/bbr.2020.17.5.4Corporate Social Performance and Financial Performance in Brazilian Companies: Analysis of the Influence of Disclosure

The relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) has been widely tested in the international context; however, there are nuances that have not been fully explained, such as the possible influence of socio-environmental disclosure and studies in specific contexts, such as the Brazilian one. In order to contribute evidence on the direction of the relationship and the presence of moderator variables, this paper aims to analyze the CSP-CFP relationship, investigating if social disclosure moderates this relationship. The research sample is composed of companies that were part of the Corporate Sustainability Index (ISE) in the period from 2010 to 2013 and the hypothetical relationships which were tested by panel data regression models. The results show that there is a positive and significant relationship between CSP and CFP in both directions of causality; however, it was found that the disclosure of sustainability reports does not intensify or alter the relationship between these performance variables.

A Mensuração do Processo de Cocriação de Valor em Empresas do Setor Bancário Brasileiro

A realidade emergente pautada no maior acesso a informações, na convergência tecnológica, e na rápida evolução da internet como meio para comunicação e, também, realização de negócios, exige uma reavaliação do sistema tradicional de criação de valor centralizado na empresa. Este artigo se direciona para a ideia da cocriação de valor, na qual o valor não é mais definido dentro da empresa e apenas entregue ao consumidor, mas sim criado conjuntamente com stakeholders em um processo focado nos indivíduos e suas experiências. Dessa forma, o estudo busca ampliar conhecimento acerca da cocriação de valor em empresas brasileiras com base em informações empíricas, para tanto, o objetivo da pesquisa se traduz em mensurar a cocriação de valor em empresas do setor bancário brasileiro e fazer uma comparação do desempenho entre elas. Utiliza-se o modelo DART (diálogo, acesso, risco e transparência), proposto por Prahalad & Ramaswamy (2004), como base de análise dos dados obtidos no Índice de Sustentabilidade Empresarial BM&F-ISE referente a 2017. Nos resultados, percebe-se o destaque de um dos bancos analisados, bem como o fato de que as empresas analisadas ainda precisam de maior foco no desenvolvimento de fatores relacionados a dimensão “acesso” do modelo utilizado.

The Impact of Corporate Sustainability Index on BIST Sustainability Index

Mass production, which started with the industrial revolution, caused both the unconscious consumption of the resources and the damages to the ecological system after the production. In this respect, the concept of sustainability, which is one of the most important conception of responsibility, is gradually gaining value in terms of protecting resources and transferring them to future generations. (Mori and Christodoulou, 2012: 94-106). Sustainability In the first place, it has started to be used mostly in the management of natural resources; later, it was used in different fields such as sectoral practices and energy tourism (Diaz - Baltciro, Voces, Romero, 2011: 761-773). Today, the expectations of the society from the enterprises have changed compared to the past. These changing expectations lead businesses to new searches. The most important concept that guides these quests is to be sustainable. The concept of sustainability for enterprises gains a new dimension in the form of corporate sustainability”. For corporate sustainability, it is possible for organizations to achieve individual results only to a certain extent. Because companies are affected to a great extent by all kinds of economic, social and even cultural formations occurring in their environment (Kuşat, 2012: 238). The most important benefit of sustainability indices is that it leads to improvements in transparency without the need for regulations, better understanding of the social and environmental impacts of companies and guiding them to reduce the negative effects of company activities. The BIST Index serves as a guide for companies on what to measure, what needs to be developed and what can be explained. Thus, it creates opportunities for companies to see social and environmental risks and opportunities and to manage their sustainability performances correctly. The index, on the other hand, provides information to investors and the community about the sustainability performance of companies. The aim of this study is whether the BIST Sustainable Index makes a difference for companies compared to BIST 100. "Does the BIST Sustainability Index really make a difference?" will be examined. In this context, data between 2014-2018 of BIST Sustainability and BIST 100 index will be examined. Based on the results obtained in the study, it shows that there is no strong evidence of the impact of inclusion in the BIST Sustainability Index on the stock returns of companies. At the same time, the BIST Sustainability Index has been shown to have similar returns to the BIST 100 Index. Key Words: Sustainability Index, BIST, Corporate.

Being green makes me greener? An evaluation of sustainability rebound effects

Sustainability is not only about caring for future generations. It can be a profitable business. For stock market investors sometimes, it is difficult to choose where to allocate financial resources, especially in sustainability investment funds. In this sense, the Brazilian stock market index provides a measurement criterion that defines which Brazilian companies invest in sustainability purposes, the so-called Corporate Sustainability Index (ISE). What is still unknown are the consequences of the performance of this index in the stimulation of new practices of sustainability in companies, in other words, if there is a rebound effect of green investments in stock markets. For that, we conduct a documental research analysis comparing virtuous and crisis economic periods with Delphi Method and correlation regression. The data revealed that certified companies still maintain their investments in sustainability practices even when the context is not favorable and the index is not performing well. This represents a cost in the short-range that represents a positive rebound effect of being certified and employing efforts to maintain greener operations in the long-range. Individual behavior revealed to be a fundamental aspect of an organizational decision of sustainability strategy. The paper contributes to investment market choices for attesting long-range sustainability investments by certified companies, even in hostile economic conditions, demonstrating that sustainability is aligned with purpose and durable commitment toward sustainable development.

Sustainability in Brazilian firms based on the dimensions of Corporate Sustainability Index (ISE): considering project management efforts.

Sustainability is still a challenge for organizations and business people are part of it. The corporate changes are provided by projects and, in this context, projects become a means to reach sustainable development. Some sustainable indexes were developed in different countries in order to make available reliable information about company behaviors. ISE (Corporate Sustainability Index), the Brazilian index, offers the analysis of a group of companies. In this context, this paper is proposed to explore the variables analyzed in ISE surveys and the results published in the ISE platform, considering the dimensions and best practices approached and possible correlation between them. The aim of this research is to understand the correlation between the dimensions approached. This is an exploratory study and the method followed was quantitative. The secondary data used to perform the analysis was from ISE database questionnaires that were answered by firms from different industries. Our findings show that there is correlation between the TBL (Triple Bottom Line) and the ISE questionnaires, it was identified that corporate governance grows the TBL also grows.

Sustainable development and corporate financial performance: A study based on the Brazilian Corporate Sustainability Index (ISE)

AbstractThere is a growing trend of seeking to move toward sustainable development and because of this, together with the increasingly watchful eye of society, companies are increasingly taking note of this new niche in the stock market. Thus, fund managers and investors see a need to align profits with environmental, social and economic variables in business management as well as corporate governance. The Brazilian Corporate Sustainability Index (Índice de Sustentabilidade Empresarial—ISE) was created in 2005 by the São Paulo Stock Exchange, currently known as B3, which is the result of the merger between the BM&FBovespa and CETIP, and has this nomenclature in reference to the initial letters of Brasil, Bolsa, Balcão. The ISE aims to identify a company's commitment to sustainability and thereby guide the capital and credit market, highlighting companies that incorporate social and environmental risks into the organization, seeking to positively influence the image of the companies involved. The aim of this research was to verify the superior economic and financial performance of the Brazilian companies that are included in the ISE portfolio in relation to the other companies that constitute the Ibovespa, between the years of 2014 and 2018. As a result, a neutral relationship between financial performance and sustainable development was identified, which is consistent with the results of previous studies referenced and addressed in this research. The findings of this study provide an important contribution to the existing research on sustainability in financial markets, since few scientific articles that investigate, using indicators and statistical treatment, the Brazilian sustainability market, are available.

Analysis of contents of annual sustainability reports of industrial companies participating in the sustainability index of the Brazilian Stock Exchange

The objective of this article is to analyze the content of environmental disclosure of industrial companies participating in the Corporate Sustainability Index (ISE) of the Brazilian Stock Exchange (B3) from 2009 to 2016, based on the Stakeholders’ Theory perspective. We adopt a descriptive approach, with qualitative and quantitative analysis of secondary data that we analyze by means of content analysis and statistical techniques. The data collection took place from the institutional site of each organization to obtain the Annual Sustainability Reports. The reports went through text analysis, which resulted in an inventory of words related to the concept of sustainability. The results indicate that the analyzed companies have similarities with regard to the content disclosed in the Annual Sustainability Reports. Such similarities occur in spite of the fact that companies operate in different industrial segments (petrochemical, food, wood, pulp and paper products and personal use products) and probably come from a homogeneous perception of the segments interested in the information, which would be in reduced number. Although the surveyed companies operate in different segments, they are subject to similar pressures by stakeholders and that imposes an apparent homogeneity to their reports.

Inovação e sustentabilidade ambiental e social: um estudo comparativo entre empresas do Brasil e da Europa

In this descriptive and qualitative study, we evaluated innovation and socio-environmental sustainability as strategic organizational profiles in 78 Brazilian and European public firms traded on BMFBovespa or NYSE Euronext between 2010 and 2013 and listed in at least one of the following indices: the Corporate Sustainability Index (ISE), the Carbon Efficient Index (ICO2) and the Low Carbon 100 Europe index®. Information was retrieved from financial reports, explanatory notes and sustainability reports. Innovation was proxied by intangible innovation assets, patents and RD. Sustainability was evaluated based on the disclosure of GRI indicators. The two strategies were found to be strongly incorporated in European firms (i.e., in developed economies). A growing demand for innovation and sustainability was observed in both settings, indicating an indirect relationship between the two strategic profiles. Our results suggest that country-level economic and institutional factors play an important role in the definition of innovation and socio-environmental sustainability as strategic organizational profiles.

Investimento social privado: a estratégia e gestão das fundações e institutos

This article is the result of a qualitative research with multiple case studies in CSI portfolio companies with Foundation or Institute, and an exploratory research in articles; sustainability, integrated, or socioenvironmental reports; books; and websites on Private Social Investment and CSI (Corporate Sustainability Index). The return assesment of the PSI is increasingly required in the corporate world, because besides being positively ranked on the São Paulo Stock Exchange, it is critical for the maintenance of social projects, as well as to invest in new actions for the communities. The general objective of this study is to analyze how companies with Foundations and Institutes integrating the CSI portfolio evaluate the return of the PSI. The specific objectives are: i) to identify strategical policies and guidelines for PSI application; ii) analyze the leadership involvement with the PSI decisions; iii) identify possible impacts of PSI actions on the reputational image of the companies. iv) identify the focal point of action; v) check how the community needs are assessed; vi) check how the PSI impacts are evaluated. Among other relevant conclusions, it was found that the way in which PSI management is carried out, expresses the alignment of the sustainability to the business strategy. The study provides scholarly and practical contributions, by highlighting that the PSI actions are important in terms of the reputational image of the companies.

Environmental Management of Larg Supply Chain: A Diagnostic Instrument Proposed for Assessing Suppliers

This article addresses Supply Chain Management (SCM), focusing specifically on environmental management systems. A systematic review of the literature identified gaps in SCM studies and supported the development of a diagnostic tool model capable of measuring the level of involvement of suppliers in a Supply Chain (CS) with the Environmental Management program of a focal firm. The results of this study were synthesized in a diagnostic tool on which elaboration was based on the LARG SCM model, the Dynamic Capabilities model, and the Learning to Grow Methodology. The proposed model was structured to measure, through a graph, the level of involvement of the suppliers of an SC with the environmental management requirements based on ISO 14001: 2015. The model was tested on the supply chain of a company that was included in the ISE (2017) Corporate Sustainability Index and was validated by the surveyed company.

The Effects of Voting Ownership Concentration on Social and Environmental Disclosure: Empirical Evidence from Brazil

Purpose – This study aims to analyze the effects of voting ownership concentration on the social and environmental disclosure of Brazilian companies in their Annual Financial Statements. Design/methodology/approach – Econometric models were estimated considering a sample of 1,252 annual observations of 252 companies in the period 2010-2014, and the social and environmental disclosure was measured through a lexical analysis performed by counting 75 words and key expressions related to social and environmental practices. Findings – Our findings suggest that the social and environmental disclosure of Brazilian companies is positively correlated with their voting ownership concentration. In addition, if the company is listed in the Corporate Sustainability Index or if it is in a potentially aggressive industry with respect to the environment, this also positively contributes to a higher degree of social and environmental disclosure. Originality/value – Our study contributes to the literature on social and environmental disclosure and its association with ownership structure by providing evidence in an emerging market characterized by a high concentration of control.

A incidência da inovação em responsabilidade social corporativa nas empresas do setor elétrico

In a scenario of economic crisis it is common for companies to reduce the volume of social activities and innovation. Companies in the electricity sector are the basis for a country’s industries, making this sector one of the most important. Therefore, it is relevant to investigate whether companies in the electricity sector perform innovation, Corporate Social Responsibility (CSR) activities, and CSR actions that can be considered as innovation. The objective of this study was to describe the CSR actions and innovations that matter most to the electric sector companies present in the BMF Bovespa Corporate Sustainability Index (ISE). A documentary survey was carried out, consisting of the management and sustainability reports, from the years 2013 to 2015, of the 10 companies listed in the ISE in the year 2015. Regarding CSR activities, it can be inferred that promoting art, culture, citizenship, quality of life and generation of income for young people and adults, have programs of inclusive professional training and volunteer programs, matter to the companies surveyed. Regarding the relationship between innovation and CSR, it can be inferred that the implementation of innovations that led to the improvement of social actions, and the elaboration of innovation projects matter to companies, to the detriment of the other researched items. It is suggested that the actions of innovation and CSR are focused primarily on the development of the individual and the interaction with the society in which it is inserted, and this can provide a favorable image of the company for society.

Determinants of corporate sustainability performance – evidence from Brazilian panel data

PurposeOver the past two decades, there has been an increasing interest on corporate social responsibility by a number of constituencies – corporate managers, research scholars, policymakers and investors. In this context, corporate sustainability performance (CSP) has been a central focus of attention. This paper aims to analyze CSP determinants in Brazil, an important emerging market. Firm CSP is proxied by the membership to the Corporate Sustainability Index (ISE) which comprises environmental, social, economic and governance issues.Design/methodology/approachLogit panel data models are estimated for a sample of 2,685 firm-year observations in the period of 2006-2015.FindingsResults show that firms operating in environmental risky industries tend to be leading CSP firms in Brazil which might be a positive consequence of the Brazilian environmental legislation that could be forcing such firms to be more committed to environmental issues. High ownership concentration reduces the probability of a firm’s membership to the ISE index signaling that large controlling blockholders may not see sustainability and governance concerns as relevant. Larger Brazilian firms and the ones with more growth opportunities tend to be CSP leaders. Additionally, the financial crisis of 2007-2009 had a negative effect on CSP in Brazil.Practical implicationsThe implications of the present findings may be of interest to academics and firms’ stakeholders. The fact that firms from environmental risky industries exhibit higher concerns with CSP, probably because of the Brazilian environmental rules that has advanced in the past decades, show the prominence of policymakers in the critical scenario of environmental issues. When designing regulation, policymakers should be conscious of the importance of social issues and pay attention to all ways available to foster firm sustainability concerns. The additional evidence that dominant shareholders do not appear to see CSP as a relevant concern in Brazil points out an agency conflict in which large blockholders’ interests may be prevailing over other stakeholders’ interests. That is important to academics who study the role played by ownership structure on firm’s policies. Furthermore, larger firms, as well as the ones with more growth opportunities, seem to invest in CSP, possibly for seeing it as a way to generate competitive advantage.Originality/valueAs per the authors’ knowledge this is the first paper to point out the relevance of industry environmental sensitivity over firm’s commitment to sustainability issues in Brazil. Additional evidence is provided on the negative effect of ownership concentration on the probability of firm’s membership to the ISE sustainability index using a longer period as well as robust logit panel data model estimates compared to previous studies. Unlike previous works, the paper analyzes the complexity of a sustainability index in the Brazilian market. Such index comprises corporate social responsibility, sustainability and corporate governance concerns. This set of concerns makes it a complex index and requires a deeper rationale for the determinants of CSP as proxied by the membership to it, under the stakeholder and agency theoretical frameworks.

Relação entre Sustentabilidade e Inovação: uma análise da legitimidade organizacional das empresas do setor elétrico brasileiro

Esta pesquisa visou identificar junto às empresas do setor elétrico listadas no Índice de Sustentabilidade Empresarial (ISE) se a inovação em Responsabilidade Social Corporativa (RSC) é utilizada como item estratégico para legitimar suas ações, tendo como base a perspectiva da Teoria da Legitimidade. A RSC coloca a companhia atuando de forma ética e buscando a eficácia econômica, sem excluir as necessidades sociais e dos trabalhadores. O artigo focou na compreensão de três dimensões da inovação: incremental innovation, radical innovation e game-changing innovation, relacionadas a mudanças em processos, ações e relações empresariais. Esta pesquisa delineou-se como descritiva e documental, baseada em dados secundários analisados de 2011 a 2016, totalizando 9 empresas escolhidas e 54 relatórios. No quesito incremental innovation, apesar de divulgadas, não é claro se tais ações são apresentadas como reais práticas de RSC ou se buscam somente legitimar as organizações frente a seus stakeholders. Já no quesito radical innovation observaram-se, por exemplo, mudanças no comportamento dos fornecedores quanto à integração da inovação nas companhias analisadas. No item game-changing innovation, apesar de algumas iniciativas, a maioria dos relatórios não apresentou ações consistentes. Conclui-se que ainda há poucas informações das mudanças provocadas pelas inovações tanto tecnológicas quanto operacionais, oriundas de novas práticas, procedimentos e costumes. Adicionalmente, a inovação como estratégia pode ser entendida como uma forma de legitimar as ações da RSC, estando mais voltadas para obrigações impostas pelos órgãos reguladores. Logo, há uma lacuna quanto ao seu objeto enquanto característica social.

Diversification and optimal hedges for socially responsible investment in Brazil

This study contributes to the literature on socially responsible investing by examining the diversification potential of commodities, specifically oil, gold and clean energy together with the Brazilian Corporate Sustainability Index (ISE). Multivariate GARCH models are used to model volatility spillovers and conditional correlation in pairs of stocks containing ISE. Specifically, A-BEKK and A-DCC models with spillovers are estimated. The models’ results are used to compute and analyze the optimal weights and hedge ratios for stock portfolio holdings. The greatest benefit from diversification is obtained through the acquisition of gold and then OVX.