CSR Committee Research Articles

Ethical Guardians: The Multifaceted Impact of CSR Committee on Executives Manipulation Tendencies

Ethical Guardians: The Multifaceted Impact of CSR Committee on Executives Manipulation Tendencies

The impact of a CSR committee on CSR performance

This study investigates the impact of introducing corporate social responsibility (CSR) committees on firms’ CSR performance. Using a sample of publicly traded Japanese companies for the period of 2011–2021, we employ propensity score matching difference-in-differences methods to address endogeneity issues. Our main findings reveal that the introduction of a CSR committee significantly improves CSR performance, providing support for the importance of structured and dedicated efforts toward achieving sustainability. In addition, our study contributes to the literature by examining the effects of the detailed components of environmental and social scores on CSR performance, offering a granular understanding of how CSR committees may influence various aspects of CSR performance.

Sustainable supply chain management and CEO compensation: does CSR committee matter?

ABSTRACT This study extends the existing literature on sustainable supply chain management (SSCM) and executive compensation by focusing on an important part of the company’s value chain, namely its supply chain (SC) and the associated risks. Through a quantitative study of companies listed on the SBF 120 over the period 2007–2021, our results emphasise the role of CSR committee to improve the relationship between the implementation of sustainable SC initiatives and CEO compensation. The CSR committee can be a way to improve the identification and consideration of environmental and social risks linked to the SC. We demonstrate the advantage of the presence of a CSR committee for the CEO themselves by increasing their compensation when they are more engaged in CSR activities. This result adds original insights to the existing literature which has already demonstrated the benefit of this committee for the other stakeholders. Thus, our results encourage the boards to implement this non-binding CSR committee as a supplementary governance mechanism.

Dividend payout and corporate transparency: Do CSR governance mechanisms matter?

In this paper, we investigate whether dividend payout is associated with corporate transparency (i.e., CSR reporting and assurance) and whether CSR mechanisms (i.e., CSR committee and executive CSR compensation) moderate this relationship. The data covering the period between 2002 and 2019 was retrieved from the Thomson Reuters Eikon and country, industry, and year fixed-effects logistic regression analysis was used to analyze the relationships. The results underline that CSR reporting and assurance are positively associated with dividend payout and CSR committee and executive CSR compensation moderate this relationship significantly. Further analyses indicate that the dividend payout and CSR reporting and assurance relationship is robust to endogeneity concerns, regional samples, and economic downturn periods. In addition, we find that different CSR mechanisms have differential moderating roles in Anglo-Saxon and non-Anglo-Saxon countries; while CSR committee functions a better-moderating role in non-Anglo-Saxon countries, executive CSR compensation performs a better-moderating role in Anglo-Saxon countries.

Do investors care about greening in corporations? The role of eco-innovation and CSR committee

PurposePrior studies mostly tested the association between carbon emissions and firm value in certain contexts. This study aims to advance the existing literature by concentrating on three indicators of greening in corporations namely resource use, emissions and eco-innovation, and examining their value relevance in the stock market at the global level. Furthermore, we deepen the investigation by exploring the moderating role of eco-innovation and the CSR committee between greening in corporations and market value.Design/methodology/approachThe data for the study were retrieved from the Thomson Reuters Eikon database for the years between 2002 and 2019 and contain 17,961 firm-year observations which are analyzed through fixed-effects regression.FindingsThe results reveal that while resource usage is viewed as value-relevant by the market, the emissions and eco-innovation are not. However, despite eco-innovation per se not being value-relevant, its interaction with resource usage and emissions is value-relevant. Furthermore, CSR committees undertake a very critical role in translating greening practices into market value.Research limitations/implicationsWhile the results for emissions support the cost-concerned school, the findings for resource usage confirm the value creation school. Furthermore, the interaction effect of eco-innovation and CSR committee confirms the resource-based theory and stakeholder theory, respectively.Practical implicationsInvestors regard eco-innovation-induced pro-environmental behaviors as value-relevant. These results propose firms replace eco-innovation at the focal point in developing environmental strategies and connecting other greening efforts to it. Moreover, CSR committees are critical to corporations in translating greening practices into firm value by developing and implementing disclosure and communication strategies.Originality/valueThe study’s originality stems from investigating the synergetic effect that eco-innovation and CSR committees generate in translating greening practices to greater market value at a global scale.

The effect of ESG and CSR attitude on financial performance in Europe: A quantitative re-examination

Focusing on the European context, this paper re-examines the relationship between the ESG and financial performance and whether CSR attitude moderates this relationship. A panel data set with all the listed companies in STOXX Europe 600, covering the period 2012–2022 was built, with company data being sourced from the Refinitiv Eikon platform for a total of 6600 firm-year observations. Six measures of financial performance and three regression frameworks were considered for analysis. Overall, inconsistent patterns of effect are identified across ESG predictors and financial performance measures. The presence of a CSR committee was found to negatively moderate the effect of ESG score on ROA only, whereas an external auditor to the CSR report to negatively moderate it with share price. Future research should consider replicating the proposed re-examination framework in other data settings and legislative and accounting contexts to strengthen the current evidence base and therefore deepen our understanding of the mechanisms underlying the investigated relationships.

Environmental performance factors: insights from CSR-linked compensation, committees, disclosure, targets, and board composition

ABSTRACT This research investigates the factors influencing Corporate Environmental Performance (CEP) using S&P 500 firm-level data spanning 2001-2022. Drawing on existing literature, the study argues that corporate environmental performance (CEP) is positively affected by certain corporate characteristics. Specifically, the study reveals that CSR-linked compensation, the presence of a CSR committee, disclosure policies, and environmental targets are positively associated with CEP. Furthermore, the study shows that the inclusion of independent directors and female board members can also lead to higher CEP scores. Additionally, the findings indicate that analyst coverage and network size are positively linked to CEP. Robustness tests, including 2SLS, subsample analysis, and alternative measures, provide further support for the primary conclusions. The study's results contribute to the growing body of research on the importance of corporate characteristics in promoting sustainable business practices.

The role of board gender diversity and independence on the existence of a sustainability committee

The purpose of this study was to enhance the understanding of the factors determining the existence of a “Corporate Social Responsibility” (CSR) committee on the board. Focusing the attention on board composition, this paper explores how female directors influence the existence of a CSR committee, and how this effect can be moderated by the independence of board members. To be able to test the aims of the study, an international sample of analysis of 4,168 firm-year observations from 2012 to 2016 was used, proposing several models for panel data. The findings revealed that female directors exert a positive influence on the existence of a CSR committee, although this commitment is limited when in addition to women, they are independent directors on the board. Therefore, it can be said that board gender diversity and board independence are not complementary mechanisms that favour the existence of a specific committee on CSR. This study is one of a limited number of studies to focus on the antecedents of existence of a CSR committee in firms. In addition, the study obtains benefit by considering the independence of board of directors as a moderating variable on the relationship female directors-sustainability. In contrast with previous studies based on the cross-sectional data from a single country, the data set of the current study includes a panel data comprising of a period between 2012 and 2016 and an international sample from 44 countries in six continents.

Sustainability Reporting on Financial Performance, the Role of CSR Committee, Evidence from Indonesia

Companies in running their business compete to improve their respective performance reporting. ESG issues have gained considerable attention as companies increasingly focus on disclosing both financial and non-financial information. This research aims to assess the partial and simultaneous impact of ESG performance on Return on Assets (ROA) and Tobin's Q, with moderation by the CSR committee. Disclosure information and financial data for companies in the energy sector in Indonesia were sourced from financial reports and sustainability reports. encompassing a total of 78 companies period the years 2013 to 2022. After applying criteria for companies disclosing ESG information, a subset of 43 companies was identified. Using Chow test, Lagrange, and Hausman tests before moderation, followed by tests after moderation by the CSR committee using STATA. The research finding, before moderation by the CSR committee, revealed that ESG performance had a positive and significant impact on ROA, while its effect on Tobin's Q was negative and insignificant. Then moderation by the CSR committee, indicated that the presence of a CSR committee positively moderated the impact of ESG performance on ROA and Tobin’ Q, albeit insignificantly. Further examinations post-moderation revealed that the presence of a CSR committee does not exert a significant moderating effect. Consequently, within energy sector companies, the CSR committee seems to serve as a symbolic tool, implying the company's adherence to proper operational practices without significantly altering the impact of ESG performance.

The Role of CSR Committee in the Sustainability Reporting on the Financial Performance of Energy Sector Companies in Indonesia

The Role of CSR Committee in the Sustainability Reporting on the Financial Performance of Energy Sector Companies in Indonesia

The Effect of Board Size, Board Independence, Board Diversity and CSR Committee on Sustainability Reporting

This research aims to examine the effect of board size, board independence, board diversity, and CSR committee on sustainability reporting. The population o this study Is listed companies in Indonesia Stock Exchange. Sample are selected by using purposive sampling method for the period of 2016-2020. The results show that board independence and CSR committee have an effect on sustainability reporting. Meanwhile, board size and board diversity have no effect on sustainability reporting. The findings of this study suggest that the board of commissioner independence together with the audit committee have an important role in improving sustainability reporting.

Scaling up the transition: The role of corporate governance mechanisms in promoting circular economy strategies

This study examines the role of corporate governance (CG) mechanisms in promoting Circular Economy (CE) strategies among non-financial listed companies in manufacturing industries, which is still a relatively unexplored topic in the CE literature. Our findings indicate that the presence of stakeholder engagement practices, sustainability reporting, and environment management teams have a direct impact on the adoption of CE strategies, while the presence of a CSR committee, adherence to the United Nations' Global Compact, and executives' compensation linked to environmental, social, and corporate governance performance do not have a direct effect but support CE strategies through other mechanisms. Overall, this study provides valuable insights for policymakers and managers as it shows that CG mechanisms can be used to promote the adoption of CE business models, thus contributing to climate risk mitigation objectives.

Does Green Investment Elevate CSR Performance? The Role of CSR Committee As Moderating Factor

This study intends to investigate the effect of green investment and CSR committee on CSR performance. This study also analyzes the moderating effect of CSR committee on the relationship between green investment and CSR performance. We analyzed 117 firms-years observation from 39 companies listed in LQ-45 index from 2019-2021. Sample is selected using purposive sampling technique, which the availability of CSR information become the criteria of sample selection. To test the hypotheses, we applied Moderated Regression Analysis (MRA). Our findings indicate that there is a positive impact of green investment and CSR committee on CSR performance. However, CSR committee does not play a moderating role in enhancing CSR performance. By using a new proxy of green investment and CSR performance measurement, our research contributes on providing a new insight on what factors influence the sustainability performance within legitimacy theory framework. Our findings provide empirical evidence that can be used by business practitioners and policymakers to consider the importance of independent CSR committee as a part of sustainability governance.

What drives environmental, social and governance (ESG) performance? The role of institutional quality

PurposeThis study aimed to investigate the role of the country's institutional quality on the environmental, social and governance (ESG) performance of its companies.Design/methodology/approachOver a four-year period (2016–2019), the study examined the ESG performance of 412 organizations situated in 19 countries. ESG performance was the dependent variable, and the independent variables were rule of law, economic freedom, education index and international trade freedom. These factors described the institutional quality of countries in the authors’ study.FindingsThe findings reveal that institutional quality has a major impact on ESG performance. Companies engage in more ESG practices when they operate in countries with greater economic freedom and international trade freedom. The authors corroborated the core assumption of institutional theory (IT), which argues that organizational behavior is determined by the country's institutional setting.Research limitations/implicationsThe findings, like all research, should be interpreted with caution. The authors’ research focused solely on large energy corporations. As a result, the conclusions cannot be applied to small companies or other industries. ESG performance can also be measured using different datasets.Practical implicationsIf managers want their companies to perform better in terms of ESG, the authors recommend that they form a CSR committee and sign the Global Compact. This study may be valuable to international policymakers because they can underline that greater economic freedom, better education and greater international trade freedom all promote higher ESG performance.Originality/valueTo the best of the authors' knowledge, nearly all of research explores the relationship between ESG and financial performance. As a result, this study built on past research by investigating how national aspects affect corporate ESG performance.

Impact of Board of Directors on Funds Raising: Evidence for Green Bonds

The present paper attempts to reveal influence of characteristic features of the board of directors (BD) on fund raising using green bonds. The research involved a sample of 87 public companies which issued green bonds in 2021. We analyzed influence of such factors as the proportion of women and independent directors on the BD, CEO duality and the numberof the BD members by the share of green bonds in the total debt of the company. The share of debt in the assets, the natural logarithm of total assets (company size) and return on equity (ROE) were used as control variables.
 The logarithmic specification of the classical linear regression model was chosen as the optimal one. So, heteroscedasticity, autocorrelation and multicollinearity were not detected in the model with the dependent variable logarithm (the share of green bonds in the total debt). The least squares method (LSM) was applied to evaluate this model. As long as the initial sample of companies which issued green bonds in 2021 comprises both financial and non-financial companies we verified the validity of the obtained results for two types of companies. Assessment of the optimal model for two subsamples of financial and non-financial companies yielded results somewhat different from the ones obtained from analysis of the total sample. Evaluation of the regression for financial and non-financial companies showed a reduction in significance of influence exerted by women’s representation and the size of the BD. However, in case of non-financial companies the significance of such factor as presence of the sustainable development committee increases. According to the obtained results the companies with the CSR committee attract relatively larger financing using green bonds.

ESG score, board structure and the impact of the non-financial reporting directive on European firms

The primary objective of this research is to examine the impact of the EU Non-Financial Reporting Directive on the significance of specific board characteristics in promoting higher ESG scores among 835 European companies listed from 2002 to 2020. Empirical results indicate that gender diversity, cultural diversity, a higher number of independent directors on the board, and the presence of a CSR committee all significantly contribute to achieving higher ESG scores. Furthermore, the Non-Financial Reporting Directive 95/2014, which requires large EU firms to report on various environmental, social, and governance issues, not only drives EU firms to attain higher ESG scores but also significantly reduces the ESG gap between companies with and without a CSR committee. Meanwhile, other board characteristics have maintained their relevance to a substantial extent.

Determinants of Corporate Water Disclosure in Indonesia

Water information disclosure by companies in Indonesia has become an important commitment to safeguarding water resources and taking responsibility for the environment and stakeholders. This study has two objectives. First, it investigates the extent of water information disclosed by manufacturing companies listed on the Indonesian Stock Exchange. Second, this study investigates the determinants that affect the disclosure of water information. Water information disclosure is analyzed using content analysis based on the Global Reporting Initiative (GRI)-G4, the CDP’s 2020 Water Safety Questionnaires, and indicators used in previous research. This study uses data from the annual reports and sustainability reports of manufacturing companies listed on the Indonesia Stock Exchange from 2017 to 2020. The determinants tested in this study include the existence of a CSR committee, board independence, government ownership, profitability, company size, and industry type. These findings indicate that companies with CSR committees disclose less water information. Meanwhile, share ownership by the government has a significantly positive effect on water information disclosure. The variables—board independence, profitability, company size, and industry type—do not affect water information disclosure. This study contributes to the literature by providing a comprehensive perspective on water information disclosure in Indonesia.

CSR committee and firm value during the COVID-19 pandemic

This paper investigates whether the presence of CSR committees has a mitigating effect on firm value (measured by Tobin’s Q) during the COVID-19 pandemic. Analyzing UK listed firm data, we find that although the pandemic results in lower firm value, the presence of CSR committees helps to mitigate the negative impact of COVID-19 on firm value. The results suggest that the formation of CSR committees is not a symbolic impression management tool but an effective sustainability governance mechanism during the crisis. Our results should be helpful for regulators and companies in making decisions related to CSR committees.

The impacts of firm-level and country-level variables on Environmental, social and corporate governance greenwashing

Abstract
 While ESG investments have increased in the last 10 years, stakeholders are curious about the correctness of the ESG claims of companies. Greenwashing (GW) is a conscious and selective information disclosure of firms to create a positive image in the eyes of the stakeholders. It limits the integration of ESG data into investments as the stakeholders lose their trust in that declarations. Unaudited sustainability reports, lack of standardization in disclosure rules of ESG data, and the absence of a global governance body to ensure the accuracy of reported ESG information increase the risk of GW behaviors. 
 Purpose: The motivation of this study is to help out stakeholders to determine which company factors (size, profitability, board structure, governance model) and country factors (corruption, unemployment, wealth of the society) impact the ESG greenwashing behaviors within STOXX 600. 
 Method: We implemented a panel regression model. The dataset covers STOXX 600 firms from 2009-2020.
 Findings: The results show that each ESG GW dimension is impacted by a different company and country variables. An increase in CSR committee and embedding sustainable factors into the Executive remuneration are two main factors that decrease all three dimensions of GW behaviors. Company governance and financial factors have more impact on the GW compared to the country factors.
 Originality: According to our knowledge, this is the first research that evaluates each greenwashing dimension at the firm and country levels.

The CSR committee as moderator for the ESG score and market value

AbstractThis paper investigates the relationship between the ESG score and market values. Specifically, we test the moderating role of CSR committee defined as organizational subcommittees of boards of directors that make social and environmental recommendations to the boards of directors and support members in their CSR‐related tasks. We built a panel data set with all the listed companies in STOXX Europe 600, covering the period 2014–2020. Firms' data come from Refinitiv Eikon database which contains financial and ESG scores data of all EU listed companies. Our sample of firm‐level data contains a dataset of 600 European listed companies which are part of the STOXX Europe 600 Index. We included ESG data of STOXX Europe 600 Index components in the period 2014–2020. Our dataset contains a total of 4800 firm‐year observations. We found a negative relationship between ESG score and stock prices while the presence of CSR committee as moderating variable generates no significant evidence of ESG score. The presence of CSR committee is not considerably supporting ESG in achieving higher market performance. The CSR committee plays an essential role in monitoring management activities. This may support management practitioners in better understanding and reacting to stakeholder expectations.