Measuring Corporate Sustainability Research Articles

Measuring corporate sustainability in its multidimensionality: A formative approach to integrate ESG and triple bottom line approaches

AbstractCorporate sustainability is a multifaceted concept with different definitions and measures proposed by the literature and the standards. This study aims to develop and validate a scale of corporate sustainability implementation that can face the complexity and multidimensionality of the concept. Specifically, the scale was designed around four dimensions (governance, prosperity, planet, and people), a three‐level structure, and a formative approach. The scale validation process entailed the engagement of experts, a survey of 303 Italian firms, and a case study application. The findings highlight the nature of the third‐order construct of sustainability implementation and the relevance of adding the governance dimensions to the most spread triple bottom line approach. As a theoretical contribution, this study argues that the missed recognition of these features could originate differences in previous sustainability measures. Further studies would apply the scale to measure firm sustainability in different contexts and in relationship with relevant drivers and outcomes.

Facilitating corporate sustainability integration: innovation in family firms

PurposeThe purpose of the study is to understand the relationship between family-driven innovation and the incorporation of corporate sustainability in German family firms.Design/methodology/approachThe study conducted 26 interviews with 22 German family firms. Thematic analysis was undertaken on the collected data resulting in five major themes.FindingsThe study identified five main themes of corporate sustainability-oriented innovation in family firms, which include measuring corporate sustainability performances, building corporate sustainability-oriented infrastructure, stabilizing/optimizing operations, enhancing operational flexibility/independence and knowledge management and development. The study also provides an activity-based guide for family firms to use innovation to achieve corporate sustainability goals and present the findings’ implications for policymakers.Originality/valueThe present study is the first study to empirically investigate the relationship between family-driven innovation and the incorporation of corporate sustainability at each of the corporate sustainability maturity levels.

Corporate Sustainability and Financial Performance: Evidence from State-owned Enterprises in Indonesia

Corporate sustainability is a business approach to meet company needs and create stakeholders’ value in the long term. This is reflected in the company’s sustainable strategic planning and responsibility that is more inclusive and focuses on environmental, social, and corporate governance. This study aims to analyze whether corporate sustainability has an impact on the company’s financial performance. The sample studied consisted of 13 listed State-owned Enterprises (SOEs) in Indonesia for the period 2017–2021. To measure corporate sustainability, independent variables consist of the three pillars of environment, social, and governance or ESG (environment, social, governance). The environmental pillar consists of three categories, namely resource use, emissions, and innovation. While the social pillar consists of four categories, namely labor, human rights, community, and product responsibility. Finally, the governance pillar consists of management, shareholders, and social responsibility strategy. The company’s financial performance which is the dependent variable was measured using data on return on investment (ROI) and return on equity (ROE). Data analysis technique used is Automatic Linear Modeling using SPSS. The results of the study show a positive significant relationship between product responsibility (on the social pillar) with ROI and ROE. On the other hand, there is a negative significant relationship between management (on the governance pillar) to ROI and ROE. While other variables show no significant relationship to both ROI and ROE. The practical impact of this research will help academics, business entities, corporations, policymakers, regulatory authorities, and governments to better understand the relationship between sustainability and financial performance. It can also help companies to operate more effectively and efficiently in implementing corporate sustainability in state-owned enterprises in developing countries such as Indonesia. Keywords: corporate sustainability, ESG, financial performance

The Impact of Corporate ESG Performance on Environmental Investment

As a standard for measuring corporate sustainability and long-term value growth investment, corporate ESG performance is of great significance for evaluating corporate sustainability, guiding investment decisions and promoting corporate improvement. Based on the sample of A-share listed companies in Shanghai and Shenzhen that have obtained SynTao Green Finance’s ESG rating from 2011 to 2021, this paper empirically examines the role of corporate ESG performance on green investment based on the theory of “stakeholders” and the theory of “sustainable development”. The results show that: (1) good ESG performance can significantly improve the level of environmental investment, and this conclusion is still valid under a series of robustness tests; (2) The mechanism test shows that good ESG performance can expand the scale of enterprises and indirectly promote corporate green investment; (3) The intermediary mechanism test shows that there is a partial mediating effect of managerial risk appetite (Mrip) on ESG performance in environmental investment. In the new stage of accelerating the green transformation of China’s industry, Chinese enterprises urgently need to improve the green financial system, accelerate the process of green transformation, and help achieve the goals of “carbon peak” and “carbon neutrality”.

Measuring corporate sustainability: measurement scale development based on the stakeholder theory

Measuring corporate sustainability: measurement scale development based on the stakeholder theory

ESG, Stock Returns and Stock Volatility: Evidence from Chinese Listed Companies

Corporate sustainability is the top concern of the whole society, and whether environmental, social, and governance (ESG), as a way to measure corporate sustainability, has an impact on company stock returns and volatility is widely discussed. This article investigates how ESG performance influences the return of stocks and volatility for all A-share companies during the period of 2019 to 2022. The research employs the composite ESG score and the separate E, S, and G scores to evaluate the ESG performance of corporations, and employs regression models to examine the association between ESG score, individual score, and stock returns. Additionally, the study examines how the volatility of the stocks is related to the ESG score and individual score. In the results, the combined ESG score is significantly and negatively related to stock returns. Returns on stocks are significantly negatively influenced by individual E, S, and G scores. Moreover, stock volatility is significantly negatively correlated with the combined ESG score and individual score.

Why Corporate Sustainability Is Not Yet Measured

Measuring Corporate Sustainability (CS) has been identified as an important enabler for integrating sustainability into corporate practices. Different methodologies and frameworks for measuring CS have been developed in the literature with limited success, as reflected by the lack of application in the real world. Among practitioners, the effort has been on developing frameworks that provide useful indicators of the different items that need to be considered for integrating sustainability. Notwithstanding the increasing attention and progress on the subject, a cohesive and applicable measure of CS across firms, industries and geographies is still missing. This paper provides an examination of the different methodologies for measuring CS, with an analysis of their merits and limitations, as well as guidance for future research focus. The findings show a failure to coherently link the mathematical measurement and data aggregation methodologies to a well-constructed concept where the linkage between the defining features and causal relations are appropriately identified. The proposed models and mathematical techniques are not able to inform on the extent to which a corporation acts sustainably because sustainability is not being measured in its highest extension, making the results narrow, non-referential and non-comparable. Furthermore, there is confusion between developing the indicators of CS, providing their measurement and enabling their integration.

Toward a Sustainability Brand Model: An Integrative Review

Stakeholder-based brand is increasingly recognized as a measure for corporate sustainability, although the knowledge in this area is relatively unknown. Through a systematic review approach, the present study explores the global knowledge base on sustainability and brand. The most influential authors and documents are identified, followed by a discovery of the intellectual structure of the sustainability and brand knowledge base with five schools of thought. First, the Customer Attitudes and Behavior school refers to behavioral studies (one of the common approaches in sustainability studies). Second, the Tourism Marketing school represents the popular context of sustainability studies that mainly relates to hospitality, destination marketing, and fashion brand management. Third, the Brand Strategy school refers to corporate strategy concerning brand that is widely used to measure corporate sustainability performance such as brand equity. Fourth, the Societal Marketing school provides insights into the marketing strategy that leads a firm to achieve competitive advantages under concerns about finite resources and rising environmental and social costs. Finally, the Advanced Quantitative Analysis school reveals an approach that is mainly used when conducting sustainable marketing studies. A model on sustainability brand is then derived, adopting the grounded theory approach. Future research opportunities are also identified and discussed to continuously advance the scholarship in this specific area.

Comparative Analysis of MCDM Methods for the Assessment of Corporate Sustainability Performance in Energy Sector

Energy is an important input for production, growth, and development. A sustainable energy sector, where energy production and consumption balance is ensured, constitutes a key point for nature and humanity. In this study, a multidimensional framework is presented to measure corporate sustainability in the energy sector. Based on this framework, the sustainability performance of energy companies operating in the Asia and Europe regions is measured by hybrid multiple-criteria decision-making (MCDM) methods, taking into account the economic, environmental, and social dimensions of sustainability. The Entropy method is used to determine the weights of the criteria, the Proximity Indexed Value (PIV) - Range of Value (ROV) - Grey relational analysis (GRA) - Measurement Alternatives and Ranking according to Compromise Solution (MARCOS) methods are used to rank the alternatives. The Copeland method is used to obtain a single rational ranking from different rankings. Based on the obtained results, it is concluded that energy companies in the Asian region are more sustainable than in the European region. Moreover, Thailand is the most sustainable country in the Asian region. The proposed framework can be contribute to the development of the energy sector.

Incorporating the Sustainability Concept in the Major Business Excellence Models

The concept of sustainability has gained importance over the last years and organizations worldwide are trying to adapt their strategies and their economic, environmental, and social goals in order to achieve what is called corporate sustainability. Despite its importance to organizations, there is no universally accepted approach for implementing and measuring corporate sustainability. Business Excellence Models (BEMs) are widely used all over the world as a means of achieving and sustaining outstanding levels of organizational performance by improving the quality and management of their operations, and have been regarded to promote sustainable development. However, they have often been criticized for focusing more on business and financial results, questioning the extent to which they can adequately promote corporate sustainability. The aim of this paper is to explore the adequacy of the latest versions of three major BEMs to address corporate sustainability, by analyzing their criteria, their core values, and the overall approach of these models. Although the latest versions of these BEMs have been evolved to take into account the growing importance of corporate sustainability, the extent to which this is achieved varies among them, and cannot yet be considered as standardized models for its implementation and measurement. BEMs should provide an extensive list of sustainability indicators, such as the ones described in the Global Reporting Initiative (GRI) standards, if they are to be regarded as frameworks that adequately address corporate sustainability.

Proposition of an Objective and Standardized Sustainability Index: An Alternative to ISE B3

In Brazil, the financial advances in market in the recently years are visible, the type B3, is in progression. Studies about the difficulty of measuring corporate sustainability, mainly through qualitative research, fail to assess corporate social performance in companies, mainly because biases and heuristics end up altering the perception of decision makers, making conceptions that should be biased. be rational. Through the MAUT multi-criteria decision support method, we propose an alternative sustainable development index to the ISE with information from the financial statements, considering the proposed index efficient and correlated with the other ESG indexes of B3.

The relationship between corporate sustainability performance and earnings management: evidence from emerging East Asian economies

Purpose This study aims to investigate the relationship between corporate sustainability performance and earnings management in emerging East Asian economies. Design/methodology/approach The authors base on the triple bottom line approach to measure corporate sustainability performance. In terms of earnings management, two models are applied to detect real activities manipulation and discretionary accruals. The authors use panel data analysis of 410 listed non-financial firms in emerging East Asian economies from 2016 to 2020 that are collected from the Thomson Reuters Eikon database. Findings The authors find a negative influence of corporate sustainability performance on real activities manipulation and discretionary accruals. The findings highlight the long-term perspective of sustainable development strategies in relation to earnings management. The authors conclude that sustainable firms in emerging East Asia are less likely to engage in earnings management. Practical implications The study would be of interest to investors who need more detailed assessments of financial reporting quality to facilitate their investment decision-making and to policymakers who need more understanding of business practices and reporting behaviors of East Asian firms. Originality/value The study has shed light on the role of corporate sustainability performance in constraining earnings management and the role of corporate ethics in providing transparent and reliable financial reporting in emerging East Asian economies.

Understanding and Measuring Sustainability Performance in the Banking Sector

Stakeholders have increasingly demanded the adoption of sustainable strategies and the increase in sustainability reports from the business. At the same time, the assessment and measurement of corporate performance now extend beyond its established financial return. This paper follows the argument that it is important for companies to be an entity that plays an active role in sustainable development. However, it is commonly accepted that there is no single, integrated way of assessing this performance. The purpose of this paper is to provide a framework for understanding and measuring corporate sustainability in the banking sector. More specifically, the paper aims to fill the gap in the corporate sustainability assessment in the banking sector because there is, in fact, a tendency to underestimate the indirect impact these sectors have on environmental issues and social responsibility. A theoretical framework of an integrated composite sustainability index is analyzed based on the adoption of the GRI sustainability guidelines and the application of the analytic hierarchy process. The construction of a composite sustainability index includes the economic, environmental and social dimension of entrepreneurship. Each of the three sub-indices is a synthesis of several key performance indicators, which are usually the subjects of annual sustainability reports of an organization. This process is used to benchmark a company over a period of time and provides an indicative tool in order to analyze banking companies. Managers can use this analysis as a valuable component for comparing them over time, so as to adopt appropriate sustainable strategies and to improve the economic, environmental and social performance. A key tool to achieve sustainability in the banking sector is to analyze the corporate performance of the organizations. This will give a competitive advantage to the bank operators.

A framework to measure corporate sustainability performance: A strong sustainability-based view of firm

This paper proposes a framework to measure corporate sustainability performance by designing a composite sustainability index. Two core concepts form the basis of the proposed corporate sustainability index: (a) the triple-bottom-line approach and (b) the principles of strong sustainability. More specifically, the proposed index simultaneously combines the economic, environmental and social components of sustainability integrating the concept of thresholds into the logic composite index of corporate sustainability performance measurement so as to address some basic principles of strong sustainability. This implies that thresholds could be associated with the concept of carrying capacity, safe minimum standards and critical capital. Finally, a computational example has been designed in order to show the practical implications of the proposed index. The findings indicate that social and environmental thresholds could play a critical role in the overall sustainability performance of firms and the proposed index could be a good tool for scholars and practitioners to understand the logic of measuring corporate strong sustainability performance.

KURUMSAL SÜRDÜRÜLEBİLİRLİK PERFORMANS ÖLÇÜMÜ: BEYAZ EŞYA FİRMASI ÜZERİNE BİR UYGULAMA

Firms that want to create long-term value can use corporate sustainability as a business approach while preventing risks that arise from the company's decision-making activities with unifying management standards and economic, environmental and social factors. Corporate sustainability performance measurement ensures the examination of sustainability's three dimensions, which are social, environmental and economic, on a corporate level. However, when assessing corporate sustainability performance, using too many criteria poses a problem because it is difficult to set all the criteria for a master criterion. Using multi-criteria decision-making (MCDM) modeling is an applicable approach to measure corporate sustainability. In this study, AHP (Analytic Hierarchy Process), which is one of the multi-criteria decision-making modelings, is used for weighting sustainability's three dimensions and three dimensions' sub-factors. Later, TOPSIS (Technical Order of Similarity to Ideal Solution) method was used to measure the supply chain sustainability performance of one of the white goods companies known and recognized in Turkey. The data are derived from the annual and sustainability reports of the well-known household appliances brand between 2010 and 2015. This study aimed to show that AHP and TOPSIS can be used in MCDM methods while measuring sustainability performance. The article ends with constraints of the study and future work ideas.

SWOT Analysis of the Application of International Standard ISO 14001 in the Chinese Context. A Case Study of Guangdong Province

Industry has long been one of the most important drivers of Chinese economic growth. In order to improve the environmental footprint of industrial areas, Chinese authorities have established mechanisms of environmental control in the internal management processes of companies. In this regard, the international standard ISO 14001 for environmental management systems is the management tool that has had widest adoption among Chinese companies since its creation in 1996. The main purposes of the paper are to investigate the available international and national statistics on the adoptionof ISO 14001 in China, and present opinions on ISO 14001 of the 72 representatives of small and medium enterprises and multinational companies of Guangdong province that participated to the workshop “New tools and standards to advance and measure corporate sustainability”, held in Guangzhou on 26 January 2018. The analysis of strengths, weaknesses, opportunities and threats (SWOT) was adopted as the research method to collect opinions on the ISO 14001 standard. Participants were asked to discuss strengths, weaknesses, threats and opportunities considering four business aspects: sustainability, internal processes, stakeholder engagement, and resource management. Our findings indicate that companies fully embraced ISO 14001 and recognized the necessity of a standardized approach to identify environmental aspects. On the other hand, they also expressed concern about aspects such as the certification cost, the focus on certification itself and not on the improvement of environmental performance, and the lack of integration with sustainability tools such as life cycle assessment (LCA) and other sustainability paradigms such as circular economy and corporate social responsibility (CSR).

Entropy Tabanlı Bütünleşik ÇKKV Yaklaşımı ile Kurumsal Sürdürülebilirlik Performans Ölçümü

Sustainability as the business definition of the concept of sustainable development is a multidimensional concept which has three categories including economic, environmental, and social. Problems arise as we try to reduce the number of categories from three to one. Multi-Criteria Decision Making (MCDM) methods provide a suitable framework where these variables can be used collectively. In this study, we suggest an algorithm based on a hybrid multiple criteria decision making (MCDM) model to measure corporate sustainability performance. The Entropy method was used to find out criteria weightings, and Topsis and Grey Relational Analysis (GRA) methods were used to define performance ranking of alternatives. The suggested methodology was used to measure the corporate sustainability performance of a company from the white goods industry in Turkey. We also conducted a sensitivity analysis by changing criteria weightings, and therefore, tested the sensitivity of the results. It was concluded that the suggested approach could be used effectively in measuring sustainability performance.

A research note of potential scientific management accounting research area in CEECs

The paper is a commentary on the future of management accounting in Central and Eastern European countries, portrayed in the manuscript in the Journal Sustainability in its Special Issue titled “Corporate Social Responsibility (CSR) in Developing Countries: Current Trends and Development”. The manuscript “The Development Perspectives of Sustainable Management Accounting in Central and Eastern European Countries” written by Beata Zyznarska-Dworczak promotes the role of management accounting in a wider social, ethical, environmental, cultural and historical context. This approach contributes to the understanding of sustainable management accounting towards socio-economic transformations and developments in Central and Eastern European countries, in the research perspectives of alternative management accounting. It encourages to treat sustainable management accounting as a social and institutional activity, realizing a complementary role (to conventional) of the management accounting system in this region of Europe because of its emerging economy perspective. This approach determines new potential scientific management accounting research area. The aim of this paper is to outline the potential for researchers to influence the development perspectives of sustainable management accounting. The paper, as a thought provoking discussion of science, raises the following questions: may the alternative context of sustainable management accounting provide opportunities for researchers investigating accounting issues in Central and Eastern European countries? is it possible to combine alternative perspectives into management accounting research? how to combine it with conventional economics-based mainstream research? How to measure corporate sustainability performance in management accounting system?

Measuring corporate sustainability performance– the case of European food and beverage companies

Abstract Measuring corporate sustainability performance is necessary to guide sustainability improvements. Although many indicators exist that capture the different dimensions of sustainability, a composite indicator that integrates across all indicators is important as it helps to summarize multi-dimensional issues and provide synthesized information. This paper discusses and evaluates a method that builds on a combinantion of prinicipal component analysis and data envelopment analysis for developing a composite indicator of corporate sustainability. Principal component analysis is used to reduce the number of indicators and remove correlations among the indicators. The composite indicator of sustainability for each company is then obtained by using data envelopment analysis with a bootstrapping procedure. The method is illustrated for companies in the European food and beverages sector, using data from Sustainalytics. The paper also shows how the composite indicator of sustainability can be complemented by a decomposition analysis to identify priorities for sustainability improvements. The approach is valuable for stakeholders who aim to enhance corporate sustainability.

Corporate sustainability reporting: Linkage of corporate disclosure information and performance indicators

The research was designed to evaluate the determinants of corporate sustainability disclosure practices for 85 Japanese companies listed on Tokyo Stock Exchange (TSE) in the First Section, from 2008 to 2014. The study examined disclosure information from CSR and annual—integrated reports and corporate websites. The study’s objective is to measure corporate sustainability disclosure guidelines determination (CSDF rate) and the relationship between CSDF rate and corporate sustainability performance. The content analysis and regression analysis were conducted to examine the research objective. The results of content analysis indicate that listed firms on TSE disclose some extent on environmental, social and economic information but the level of disclosure is vary; CSDF indicator with maximum disclosure level attributed to “Total amount of greenhouse emissions” with 99% disclosing rate and the minimum is the “Index and Grades” with 0%. Moreover, the study finds mixed results conforming to correlation and regression analysis. Similar to some existing studies, sustainability disclosure level and sustainability performance indicators have no strong association. Because there is a weak positive significant linkage among CSDF rate and water consumption, firm’s size, and environmental conservation effort. Nevertheless, to be consistent with social values, ensuing the guidelines and the accuracy of the disclosure information are important for corporate sustainability reporting.