Corporate Sustainability Research Articles

The Impact of Tax Avoidance and National In-Country Value Certification (ICV) on Corporate Sustainability

This paper investigates the impact of tax avoidance and National In-Country Value (ICV) certification on corporate sustainability in the emerging market of the United Arab Emirates. An explanatory study was conducted using the inductive approach. Quantitative data was collected using a survey instrument distributed to senior accountants. The findings show a neutral relationship between tax avoidance and corporate sustainability. Respondents show a significant impact of hard laws on tax avoidance. In addition, respondents perceive a significant relationship between ICV and corporate sustainability in the UAE emerging market. Respondents’ nationality, age, education, and company characteristics, including size, type, and activity, determine the relationships between tax avoidance, soft laws, hard laws, ICV, and sustainability practices. The National In-Country Value (ICV) certification represents an innovative tool to boost local economic development and growth. Thus, this paper provides valuable guidance for managers, accountants, regulators, and policymakers to improve corporate and national sustainability policies.

The Impact of Blockchain Technology on Corporate ESG Performance: The Moderating Role of Digital Financial Innovation

This study investigates the relationship between blockchain technology adoption and corporate Environmental, Social, and Governance (ESG) performance, with a particular focus on the moderating effect of digital financial innovation. Using panel data from 5,000 firms in the CMARS database, we employ a fixed-effects model to analyze how blockchain implementation influences ESG metrics across different dimensions. Our findings reveal that blockchain adoption positively affects ESG performance, with the effect being more pronounced for environmental and governance dimensions. Furthermore, digital financial innovation significantly enhances this relationship, suggesting complementary effects between blockchain technology and innovative digital financial services. The results remain robust to alternative specifications, endogeneity corrections, and various sensitivity analyses. Our study contributes to the emerging literature on technological innovation and corporate sustainability by highlighting the mechanisms through which blockchain technology can drive improvements in ESG performance. These findings have important implications for corporate technology strategy, sustainability policy, and financial innovation.

How Sustainable Leadership Can Leverage Sustainable Development

Sustainable leadership plays a pivotal role in fostering long-term economic, social, and environmental development. As businesses increasingly integrate sustainability into their core strategies, leaders must adopt approaches that align profitability with ethical responsibility. This paper explores how sustainable leadership contributes to sustainable development by examining key leadership principles, decision-making frameworks, and corporate strategies. The discussion highlights the shift from short-term financial goals to long-term value creation, emphasising stakeholder engagement, ethical governance, and innovation. By integrating environmental, social, and governance (ESG) principles, leaders can enhance resilience, drive corporate sustainability initiatives, and positively impact communities. The study also underscores the importance of knowledge sharing, organisational culture, and adaptability in embedding sustainability into business practices. Through a systematic bibliometric literature review, this research provides insights for executives, policymakers, and academics seeking to navigate the evolving landscape of sustainability-driven leadership. The findings underscore the necessity of aligning leadership strategies with global sustainability imperatives.

Sustainable Development in the Textile and Apparel Industry: ESG Performance, Digital Transformation, and Corporate Value

As China progresses with its "dual carbon" strategy and the deepening concept of sustainable development, there is a growing focus among consumers and investors on the environmental, social, and governance (ESG) performance of businesses. As a high-pollution and resource-intensive traditional manufacturing industry, the ESG practices within the textile and apparel sector require further exploration to understand their influence on corporate value. This research study utilizes data from publicly traded firms in the textile and apparel sector spanning 2013 to 2023. Using a two-way fixed effects approach, accounting for both temporal and individual heterogeneity, we analyze how ESG metrics influence firm value and the underlying mechanisms. The findings indicate that ESG performance in textile and apparel companies contributes to enhancing corporate value; the ability of a company to innovate partially mediates the effect of ESG performance on corporate value; a company’s level of digitalization positively moderates the connection between ESG performance and firm value. This research highlights the unique characteristics of ESG practices in the textile and apparel industry, enriches the theoretical framework of corporate sustainability, and provides practical insights for government and corporate decision-makers.

Sustainable corporate governance and corporate carbon outputs. Status quo of empirical research and further improvements

Sustainable corporate governance and corporate carbon outputs. Status quo of empirical research and further improvements

The Impact of Environmental Risk on Business Failure: A Fuzzy-Set Qualitative Comparative Analysis Approach with Extreme Gradient Boosting Feature Selection

Corporate performance is increasingly impacted by environmental issues, but their specific role in business failure remains underexplored, which leads to a gap in research that is often focused exclusively on financial metrics. By investigating the relationship between environmental financial exposure and business failure, this study addresses this gap, integrating financial ratios and environmental variables to understand how environmental performance affects financial viability. A novel dual-stage methodology was employed, first using Extreme Gradient Boosting (XGBoost) for feature selection to identify the most significant predictors of failure from a dataset of Spanish companies (N = 38,456) using 2022 ORBIS data. Next, a fuzzy-set qualitative comparative analysis (fsQCA) was applied to analyze the sufficient causal configurations leading to a high propensity for business failure. The analysis identified three distinct causal configurations associated with failure. All highlighted poor financial performance indicators, such as low results per employee and low profit per employee. Notably, one configuration identified high environmental risk (measured by TRUCAM) as a core condition contributing significantly to financial distress. These findings highlight the critical link between environmental responsibility and financial health, demonstrating the benefits of combining fsQCA with machine learning to identify intricate causal configurations and providing information to companies and governments who want to support long-term financial stability and corporate sustainability.

Financial Performance and ESG in the EU’s Core: Effects of the Russian-Ukraine War and Post-COVID Recovery

This study examines the impact of sustainability efforts on financial performance by analyzing the relationship between Environmental, Social, and Governance (ESG) scores and financial performance in 653 companies across the European Union, with a focus on the "Blue Banana" region during the economic instability caused by the COVID-19 pandemic and the Russia-Ukraine war. Using financial indicators such as ROA, ROE, and ROI, the research challenges the belief that sustainability drives financial success and mitigates risks during periods of economic instability. The findings reveal a significant negative effect of the ESG disclosure score on ROA and ROI, while ROE remains unaffected. Companies with higher ESG scores incur additional costs related to sustainability, which can hinder short-term profitability and asset efficiency. Larger and older companies perform better financially, highlighting the role of operational maturity. Additionally, the environmental score negatively impacts ROA due to the costs associated with sustainability practices. These results suggest that the economic trade-offs of ESG integration are more pronounced during periods of instability, offering valuable insights for policymakers and business leaders. This paper contributes to the debate on corporate sustainability in mature markets during economic turmoil, questioning the presumed link between sustainability and financial performance in times of crisis.

Unveiling sustainable supply chain management – corporate sustainability performance: a mediation perspective

ABSTRACT Firms’ commitment to addressing grand challenges and enhancing sustainability performance is ever-increasing, prompting researchers to investigate various practices that bolster firms’ sustainability outcomes. Understanding the nexus between sustainable supply chain management (SSCM) and corporate sustainability performance (CSP) is a burgeoning and promising area of study. Despite its potential, scholars have devoted limited attention to delineating the mediation mechanisms through which SSCM influences CSP. In an effort to address this gap, this study analyzes three mediation mechanisms, drawing on the firm’s Natural Resource-Based View (NRBV). Utilizing a dataset of 1,201 U.S. firms from the S&P 1500 over the period from 2010 to 2019, we test the mediation relationship using bootstrapping methods. The findings indicate that SSCM exerts both direct and indirect effects through pollution prevention, efficiency, and product stewardship. We further investigated the influence of market competition on both the direct and indirect effects of SSCM on CSP, examining its role as a moderating factor in these relationships. Our study contributes to the corporate sustainability and supply chain management literature by providing a deeper understanding of the mechanisms through which SSCM impacts CSP.

Driving the Sustainability Transition From Policy to Practice: Synergizing Corporate Governance and Technological Innovation to Advance Responsible Consumption and Production

ABSTRACTThis study builds upon and extends the literature on corporate governance (CG), sustainability growth, and innovation by examining how corporate governance mechanisms influence responsible consumption and production (RCP), with technological innovation as a moderating factor. Drawing insights from resource‐based and institutional theories, we develop models that link corporate governance and RCP, driven by technological innovation. Using data from 282 listed manufacturing firms in China from 2010 to 2022, we employed advanced econometric techniques and instrumental variables to ensure the robustness of our findings. The results provide strong evidence that the circular economy committee, environmental management team, CSR committee, and gender diversity positively impact RCP, while the risk management committee and board tenure rate exhibit a negative association with RCP. Additionally, ESG executive compensation negatively affects RCP through indirect factors, whereas technological innovation strengthens the influence of corporate governance in promoting RCP. The findings reveal a significant heterogeneous impact of corporate governance on RCP across ownership structures and industries. Uniquely, the PSM‐DID model confirms the causal impact of corporate governance on RCP, providing additional empirical validation for the study's conclusions. The results remain robust and consistent across multiple validation tests, confirming the reliability and credibility of the findings. The findings underscore the critical need for firms to strengthen corporate governance mechanisms and integrate technological innovation to enhance sustainability practices, providing valuable insights for policymakers and industry leaders in advancing SDG 12.

Exploring the reality of corporate sustainability strategy and sales performance in entrepreneurial SMEs: the mediating effect of innovation and sustainability performance

Incorporating sustainability into a company’s strategy is crucial for long-term success. This involves considering environmental, social and economic factors when making strategic decisions. This study investigates how implementing a corporate sustainability strategy (CSS) affects the sales performance of small and medium-sized enterprises (SMEs). It focuses specifically on how innovation and sustainability performance individually and sequentially mediate this relationship. Furthermore, we analyse the moderating effect of ICT strategy on the relationship between CSS and innovation. We collected data from 1,113 surveys on managers of Spanish entrepreneurial SMEs and analysed them using partial least squares structural equation modelling (PLS-SEM). Our findings suggest that both innovation and sustainability performance mediate the positive relationship between CSS and sales performance. We confirm ICT strategy as a moderating variable, enhancing innovation to a greater degree in firms that are more concerned about sustainability.

Balancing environmental and financial performance in hard-to-abate industries: Pathways for low-carbon hydrogen adoption

Purpose The purpose of this study is to show how the adoption of emission-reducing but cost-inferior technologies/fuels, e.g. hydrogen, may be justified. Contributing to the debates about financial viability and acceptability of low-carbon solutions, the authors suggest an opportunity cost-based framework for corporate governance in energy-intensive industries. Design/methodology/approach The study analyses production processes heavily dependent on fossil fuels and the trade-off between environmental and financial performance. Considering emission constraints, the authors derive the relationship between output price, emission parameters and input fuel prices suggesting the acceptable conditions to deploy low-emission technologies, which are used to define hydrogen demand and sustainable corporate strategies. Findings The demand for hydrogen or other low-emission solutions emerges as a function of a variety of exogenous parameters and firm’s choices. It implies that decisions on emission targets or environmental stewardship are intertwined with procurement choices, shareholder/customer preferences and other corporate governance decisions defining the pace of net-zero transition. Practical implications The willingness to invest in clean technologies is interpreted within development strategies, highlighting conditions and sectors where hard-to-abate industries are likely to adopt net-zero solutions. Numerical simulations provide insights into how companies can optimize the balance between financial and environmental performance and identify suitable market environments that facilitate this transition. Originality/value This paper presents an innovative perspective on the factors underpinning adoption of low-emission technologies. Using insights from numerical simulations, the study elucidates the corporate strategy implications, providing market-driven analysis of the pathways for industrial decarbonization.

THE IMPACT OF CEO TENURE ON SALES GROWTH: EMPIRICAL EVIDENCE FROM THAI LISTED COMPANIES

This study investigates the impact of CEO tenure on sales growth in Thai listed companies from 2012 to 2021. Utilizing data from the Stock Exchange of Thailand (SETSMART) and Form 56-1 (One report), the study employs descriptive statistics and logistic regression analyses to examine the relationship between CEO tenure and sales growth. The findings reveal a significant negative association, indicating that extended CEO tenure may not enhance sales performance. Specifically, prolonged leadership under the same CEO tends to result in complacency, resistance to change, and reduced innovation, ultimately hindering the company's ability to adapt to market dynamics and drive sales growth. Additionally, the study identifies that return on assets (ROA) positively influences sales growth, while cash flows from operating activities negatively impact it. These insights contribute to the literature on corporate sustainability and turnaround strategies, offering practical implications for investors, management teams, and regulators in emerging markets.

ANALYSING THE VARIATIONS IN GHG EMISSION REPORTING OF INDIAN COMPANIES

The quality of Greenhouse Gas (GHG) emission disclosure is crucial for assessing the environmental impact of organizations and for making informed decisions. This research is conducted to analyse the quality of emissions disclosure practices of Indian companies. The sample companies include top 100 companies listed by BSE according to market capitalization in 2024. Annual reports of these companies from 2018 to 2022 were analysed for collecting data. This study tries to address the GHG emissions disclosure practices of top 100 companies listed by BSE based on market capitalization in 2024, This also tries to understand the factors influencing the disclosure practices of companies which include the nature of industry, the size of the company and its ownership type. This research is descriptive and exploratory in nature. The study used statistical analysis such as descriptive statistics and regression to analyse data. The study found that GHG emission disclosure practices moderately vary among companies, most of the companies gave emphasis to climate change risk and opportunities and lesser focus on segment level emission and reduction plan. The industry type plays an integral role on the quality of emission disclosure practices especially the energy sector. This study attempts to identify variations in disclosure practices among companies, thereby contributing to the ongoing discourse on corporate environmental accountability. These lessons are important for practitioners and policymakers who seek to push for the advancement in the corporate sustainability. KEYWORDS: GHG Emission Disclosure, Environmental Reporting, Environmental Sustainability, Indian Companies

Decoding business strategies toward sufficient consumption in the fashion industry

PurposeThe purpose of this study is to investigate corporate strategies promoting sufficiency-oriented consumption (sufficient consumption) across various fashion segments, analysing strategies adopted, identifying patterns, assessing communication consistency across channels, detecting potential anti-consumerist washing practices, a form of greenwashing and offering managerial lessons.Design/methodology/approachThis exploratory qualitative study assesses corporate communication through the lens of the promotion of sufficient consumption, utilising a three-pillar framework from contemporary literature. It analyses the latest annual reports, websites and social media content on Facebook and Instagram from 15 prominent companies representing fast fashion, luxury and born-sustainable fashion segments.FindingsThe study reveals varying degrees of strategy adoption, with limited implementation undermining potential synergies. Companies across segments, including born-sustainable firms, exhibit inconsistent communication, compromising their credibility and sustainability efforts. This indicates widespread anti-consumerist washing and highlights difficulties and resistance in effectively integrating sufficiency into their corporate sustainability strategies.Research limitations/implicationsThe study encourages scholars to expand the sample and timeframe and urges fashion firms to prioritise more holistic, consistent, genuine commitment to sufficiency.Originality/valueIt enriches and validates the adopted framework applicability, offers new empirical evidence in business promotion of sufficient consumption and anti-consumerist washing, extends the paradox of sustainability in fashion to born-sustainable firms despite their natural inclination to adopt innovative business models and initiatives and provides clues to help managers and stakeholders support sufficient consumption effectively, guiding the industry towards a more circular, sustainable future.

Leveraging Board Experience Diversity to Enhance Corporate Green Technological Innovation

This study examines the role of board experience diversity in fostering corporate green technological innovation (CGTI), focusing on the moderating effects of absorptive capacity and director network location. Integrating upper echelons theory with absorptive capacity theory, we explore how board experience diversity enhances strategic decision-making and innovation. We hypothesize that board experience diversity improves CGTI by broadening cognitive perspectives. We also examine the moderating effect of absorptive capacity on the relationship between board experience diversity and innovation. We examine Chinese A-share listing firms, finding that board experience diversity positively affects CGTI, and absorptive capacity strengthens this effect. Additionally, we show that director network location, proxied by centrality in inter-board networks, not only strengthens the association between board experience diversity and innovation but also affects innovation. Furthermore, we conducted heterogeneity and mechanism tests, confirming the robustness of these relationships. These findings contribute to the literature on corporate governance and sustainability by emphasizing the roles of board experience diversity, absorptive capacity, and network position in driving CGTI.

Corporate sustainability accounting and reporting practices in the Saudi petrochemicals sector: a stakeholder salience approach using the best-worst method

Corporate sustainability accounting and reporting practices in the Saudi petrochemicals sector: a stakeholder salience approach using the best-worst method

Incorporating Local Communities into Sustainability Reporting: A Grey Systems-Based Analysis of Brazilian Companies

This paper aims to evaluate the maturity of Brazilian companies regarding the inclusion of local communities in sustainability reporting. The analysis was based on sustainability reports from a sample of 26 companies listed on the Brazilian stock exchange sustainability index. The study employs a mixed-methods approach and includes the following sequential steps: literature review and content analysis of sustainability reporting standards to identify critical success factors; application of the CRITIC method to define weights for decision criteria; analysis of corporate practices related to the inclusion of local communities in sustainability reports performed by Brazilian companies to determine maturity levels using the Grey Fixed Weighted Clustering method and the Kernel technique. The findings reveal that transparency, comprehensive assessment, and accountability are the most critical factors of sustainability reporting maturity regarding local communities. The analysis shows that companies in the energy sector perform better and can serve as a benchmark for companies in other sectors, such as manufacturing, in which most companies present low maturity. Key corporate practices are identified and discussed for improving engagement with local communities aiming to enhance corporate social responsibility and sustainability reporting. This study advances the understanding of corporate sustainability by highlighting the role of businesses in fostering socio-economic development through the inclusion of local communities in sustainability reporting. It extends theoretical discussions on corporate social responsibility by emphasizing transparency, accountability, and comprehensive assessment as critical factors for sustainability reporting. Practically, the findings provide insights for companies seeking to enhance engagement with local communities, offering a benchmark for industries with lower maturity levels. By demonstrating how sustainability reporting can serve as a strategic tool for social impact, the study reinforces the broader role of businesses in sustainable development.

RELATIONSHIP BETWEEN PROFITABILITY AND THE CORPORATE SUSTAINABILITY INDEX

This article aims to demonstrate the relationship between the profitability of the companies listed in Brazil’s B3 Stock Exchange (B3) and their participation in the Corporate Sustainability Index (ISE). The ISE is an initiative of the B3 aimed at assessing the performance of the companies in terms of sustainability, considering economic, social, and environmental aspects. We adopted a bibliographic, exploratory, descriptive, quantitative/qualitative pure research methodology involving four companies from the city of Guarulhos – SP, an important corporate center. Our results indicate a positive relationship between the companies listed in the B3 and their financial profitability. Investing in activities linked to corporate social responsibility seems to be an advantage for publicly listed companies, either through internal practices or by supporting philanthropic entities in the field of sustainable development, seeking to be incorporated into the ISE by improving their image before stakeholders, thus attracting new investment, and adding value to the company, which is crucial to maintain corporate sustainability.

Digital Transformation in Human Resource Management: A Case Study of Haier Group and Its Strategic Implications for Businesses

This study explores the strategic implications of digital transformation for corporate growth and sustainability by examining its function in human resource management (HRM), particularly within Haier Group. HRM must adjust by utilizing technology to improve organizational performance as the global economy continues to change due to digitalization. The study discusses the ethical ramifications of the “soft” and “hard” models of human resource management as well as the growing significance of digital HRM in the increasingly interconnected world. The study examines how Haier Group has improved its HR procedures, such as hiring, training, performance management, and employee engagement, by implementing digital tools and platforms. Haier has a competitive edge in the worldwide market thanks to its strategic approach, which combines innovation, technology, and human resources. The study also explores the drawbacks and advantages of digital HRM, including enhanced employee satisfaction, cost savings, and data-driven decision-making. Finally, the study sheds light on HRM’s future by highlighting how crucial it is to constantly adjust to new technology in order to be competitive.

The Impact of ESG Factors on Equity Investment Returns: An Empirical Study Based on the Chinese Stock Market

As the issue of sustainable development is progressively valued, financial institutions increasingly incorporate ESG (Environmental, Social, and Governance) factors into portfolio construction to achieve risk management and return maximization. This study investigates how ESG factors influence stock investment returns and performance, while analyzing their implications for investment strategies. This study employs a two-way fixed effects model to analyze the relationship between ESG criteria and equity performance in Chinas stock market, identifying a meaningful and statistically robust positive association. The findings emphasize the material marginal effects of ESG factors, as incremental improvements in corporate ESG practices systematically translate into measurable financial gains. Notably, firms with superior ESG ratings exhibit persistent long-term outperformance relative to market benchmarks, suggesting that ESG integration serves as a robust predictor of sustainable value creation. This evidence underscores the growing economic relevance of ESG factors considerations in emerging equity markets. As ESG factors serve as critical indicators of corporate sustainability, ESG principles should be proactively incorporated into enterprises top-level strategic planning to achieve long-term value creation. Investors are advised to incorporate ESG standards into their strategic decision-making processes to enhance risk mitigation, achieve financial objectives, and incentivize enterprises to advance their ESG practices.