Sustainability Performance Measurement Research Articles

Institutionalisation of sustainability performance measurement and reporting: Insights from Victoria (Australia) and New Zealand universities

Institutionalisation of sustainability performance measurement and reporting: Insights from Victoria (Australia) and New Zealand universities

Beyond financials: Examining the impact of customer focus, internal processes, and learning & growth on the sustainable performance of commercial banks—Moderating role of management commitment

AbstractThis study examines the key factors influencing sustainable performance in commercial banks, focusing on the impact of non‐financial metrics—customer focus, internal processes, and learning and growth—within the Balanced Scorecard framework on the performance of commercial banks in Ethiopia. Additionally, it examines the moderating role of management commitment in this relationship, grounded in organizational learning theory, upper echelons theory, and the balanced scorecard model. The study adopts an explanatory research design, utilizing covariance‐based structural equation modeling and interaction‐term analysis. A multi‐stage sampling technique, followed by systematic random sampling, was employed, with Soper's formula used to determine a sample size of 480 from a total population of 4990. Mahalanobis distance was applied to identify and remove biased responses. The findings reveal that non‐financial metrics—customer focus, internal processes, and learning and growth—positively affect commercial banks' sustainable performance, and management commitment strengthens this effect. Furthermore, the results empirically validate the proposed hypotheses, emphasizing the value of incorporating non‐financial metrics into performance measurement and highlighting the essential role of management commitment in ensuring their success. This research fills a gap in the literature on sustainable performance measurement within the Ethiopian banking sector and provides actionable insights for managers and policymakers.

Towards better understanding the economic and environmental sustainability of alternative agricultural cropping production systems through integrated modelling

We explore and develop an integrated model to enhance understanding and evaluation of the economic and environmental sustainability performance of alternative agricultural cropping production systems. More specifically, our developed Environmentally Sustainable Residual Income Decomposition Modelling (ESRIDM) integrates accounting decomposition analysis, Water and Economic Sustainability Performance Measurement (WESM), system thinking, modular thinking, Environmentally Sustainable Residual Income (ESRI) theory, into a holistic modelling system influenced by Life Cycle Assessment (LCA) and Life Cycle Costing (LCC) approaches.The ESRIDM is theorised and applied in the context of nitrogen management in Australian Cotton production through a detailed case study and comparative analysis of three nitrogen fertiliser options. We find the ESRIDM is able to: (i) provide an overall assessment of the economic and environmental sustainability performance of each scenario modelled; (ii) increase the transparency of the production system to enable the identification of key issues which influence the likely suitability of each scenario; (iii) enable an analysis of probable outcomes under various alternatives; (iv) evaluate the feasibility of regulatory option modelled. While this paper offers a novel perspective to a specific context, ESRIDM is designed to be adapted to a variety of contexts with a view to contributing to the evolution of more sustainable systems of production more generally.

The Relationship between the Levels of Sophistication of Sustainability Performance Measurement Systems and Organizational Performance

The Relationship between the Levels of Sophistication of Sustainability Performance Measurement Systems and Organizational Performance

Enhancing wine industry sustainability: An empirical test of the sustainable wine assessment tool

The validation of sustainability indicators is a critical process that must be conducted at various stages of development and implementation. In this article, we evaluate the Sustainable Wine Assessment Tool, a framework designed to objectively measure sustainability performance across decision-making levels in the wine value chain. The evaluation process involves two steps. First, the framework is applied to the Portuguese wine sector to assess the indicators' accuracy and scientific quality. Second, the tool's performance is measured against recommended attributes for effective sustainability assessments. Findings suggest that this assessment framework can serve as an effective tool for sustainability monitoring and management efforts. The selected indicators demonstrated reliability, and the theoretical framework exhibits substantial strengths, making it a valuable addition to any indicator-based system. Additionally, the framework's easily interpretable results highlight its potential as an effective communication instrument, in line with the commitment to creating a scientifically robust yet user-friendly tool. This study presents a practical approach to evaluating sustainability indicators using empirical data from scientific research. This method has proven highly effective, particularly in contexts with limited data and where direct comparisons are challenging. It ensures both contextually relevant assessments and robust evaluations of the indicators' accuracy.

Directors tenure diversity and corporate sustainability performance: The non-linear evidence from Indonesia public listed companies

The primary objective of this study is to thoroughly investigate the association between director tenure diversity and corporate sustainability performance. This study utilizes a sample comprising 578 firm-year observations from non-financial companies listed on the Indonesia Stock Exchange. To test the hypothesis, the study employs the Ordinary Least Squares method, complemented by a series of endogeneity tests. This study reveals that the sustainability performance of corporations in Indonesia falls significantly short of satisfactory levels. Furthermore, the study indicates that there is a negative association between tenure diversity and sustainability performance, demonstrating a U-shaped curve pattern. To ensure the robustness of our findings, we performed additional analysis using coarsened exact matching and Heckman (1979) two-stage least square methodologies, confirming that the results remained consistent with those of the initial test. Intriguingly, our supplementary analyses also revealed an inverse association between tenure diversity in the boardroom and sustainability performance within companies. This study makes a significant contribution to the corporate governance literature by elucidating the inverse association between director tenure diversity and sustainability performance. In doing so, it enhances the originality and novelty of existing studies, particularly within the context of developing countries, such as Indonesia. This study exhibits novelty by embracing a quantitative approach to measure sustainability performance, revealing an intriguing inverse association between sustainability performance and ESG initiatives within the companies.

The Effect of Green Intellectual Capital, Good Corporate Governance, and Growth Options on Sustainability Performance

Global climate change, deforestation, plastic pollution, and other environmental issues have made sustainability performance an increasingly researched topic. This study investigates the impact of green intellectual capital, good corporate governance, and growth options on the sustainability performance of primary consumer goods sector companies in Indonesia. Additionally, it examines the moderating role of public ownership. We measure sustainability performance using a composite index based on the sustainability balanced scorecard and the G4 Global Reporting Initiative's sustainability reporting disclosure framework. To our knowledge, this study is the first to employ this specific measurement method. Using a random effects estimator on 144 observations, we estimated our models. The findings indicate that good corporate governance, growth options, and public ownership positively influence sustainability performance, while green intellectual capital does not. Furthermore, the study reveals that public ownership strengthens the effects of green intellectual capital and growth options on sustainability performance. This suggests that in companies with low public ownership, green intellectual capital alone may not sufficiently enhance sustainability performance.

ESG Risks and Financial Performance. Analysis of Romanian-Listed Companies

Abstract The term “sustainability” is often used interchangeably with the acronym ESG (Environmental, Social, Governance). This happens as investors trust ESG scores to provide an accurate measurement of a company's sustainability performance. The traditional approach for evaluating sustainability performance involves analysing the scores for a given company, for each of the 3 ESG pillars: Environmental, Social and Corporate Governance. Moreover, most studies show that these scores are positively correlated with financial performance. While this approach is rather straightforward, usually it is not exhaustive and fails to capture the risks behind a company's exposure to material ESG issues and its management. Therefore, this study proposes an approach based on material ESG risk, exposure and management scores. Particularly, this paper focuses on the sector-wide analysis of ESG risk scores and their correlation with financial performance, for Romanian-listed companies, using the most recent data from one of the largest ESG rating provider. The methods employed are data analysis & visualization and correlation analysis. The results reveal, on average, a year-on-year decrease of the ESG Risk Score for the selected companies, along with increased exposure to material ESG risks, yet better management of these risks. Interestingly, the results do not show a significant correlation between the selected ESG variables and financial performance, measured by ROE, ROA and Tobin's Q, though a significant positive correlation between the Exposure and Management scores and firm size, measured by Market Cap, is found. Although there are limitations to this paper, for example, related to sample size or timeframe, it provides valuable insights on both the sustainability performance of Romanian-listed companies and, more broadly, its relationship with financial performance from a regional perspective.

Sustainability performance measurement – a framework for context-specific applications

Purpose Researchers and practitioners have recently been interested in corporate sustainability performance (CSP). However, knowledge on measuring CSP is limited. Many CSP-measurements are eclectic, without guidance for contextual applications. This paper aims to develop a conceptual framework that categorizes, explains and evaluates measurements based on their accuracy and precision and provides a guideline for their context-specific application. Design/methodology/approach The authors conducted a systematic literature review of an initial sample of 1,415 papers. Findings The final sample of 74 papers suggested four measurement categories: isolated indicators, indicator frameworks, Sustainability Balanced Scorecards (SBSC) and Sustainability Performance Measurement Systems (SPMS). The analysis reveals that isolated indicators are inaccurate and imprecise, limiting their application to organizations with delimited, specific measurements of parts of CSP due to the risk of a GIGO-effect (i.e. low-quality input will always produce low-quality output). CSP-indicator frameworks are imprecise but accurate, making them applicable to organizations that handle a more significant amount of CSP data. They have a risk of greensplashing, i.e. many indicators not connected to the industry, organization or strategy. In contrast, SBSCs are precise but inaccurate and valuable for organizations desiring a comprehensive strategic management tool with limited capacity to handle sustainability issues. They pose a risk of the streetlight effect, where organisations do not measure relevant indicators but what is easy to measure. Originality/value The ideal CSP-measurement was identified as SPMSs, which are both precise and accurate. SPMSs are useful for organizations with complex, comprehensive, connected and tailored indicators but are methodologically challenging.

A multi-criteria model for measuring the sustainability orientation of Italian water utilities

This article investigates the influence of socioeconomic context and stakeholder pressure on water utilities' sustainability performance and disclosure. The Urban Water Cycle Services (UWCS) framework has been adapted to the Italian context and integrated with a social equity variable, which enhances the framework's ability to account for the distinctive characteristics and mission of water utilities in measuring sustainability performance. The sample comprises 17 Italian utilities providing water services that released a sustainability report in 2021. The results show that the socioeconomic context and stakeholder pressure influence how water utilities align with economic, environmental, and social sustainability goals. Listed multi-utility companies are strongly influenced by private shareholders, pushing them towards financial sustainability, while small public water utilities are more sensitive to the needs of their disadvantaged users, especially in low-income contexts. The findings of the study have interesting theoretical, managerial and policy implications.

Corporate governance and corporate sustainability performance: the mediating role of CSR expenditure

PurposeThis study investigates the effect of corporate governance (CG) characteristics on corporate sustainability performance (CSP) and whether the magnitude of CSR expenditure mediates such a relationship in the context of an emerging and developing economy-Bangladesh.Design/methodology/approachThis study collects data from the annual reports of 30 private commercial banks listed with the Dhaka Stock Exchange for the period starting from 2013 to 2022, giving 300 firm-year observations. To test the hypotheses formulated, this study uses Baron and Kenny’s (1986) four-step model. Data have been analyzed using AMOS 23 to examine the direct and indirect effect of CG on sustainability performance.FindingsThis study finds that several CG variables (board size, board independence, sustainable finance committee) significantly affect several facets of sustainability performance (environmental, social, and financial performance). However, the mediating role of the magnitude of CSR expenditure in the relationship between CG mechanisms and sustainability performance is found to be limited.Research limitations/implicationsThe list of CG and ownership structure variables studied is not exhaustive, and the presence of a wide variation in the measurement of sustainability performance makes its measurement subjective to some extent.Originality/valueThis study uses the magnitude of CSR expenditure as a mediator in the relationship between CG and sustainability performance, which is rarely addressed by the extant literature in this field.

Comprehensive literature review on stakeholder prospects, responsibilities, and quality performance measurement in sustainable supply chain governance

The sustainable Governance of supply chains has become essential for businesses trying to balance economic success and ecological and ethical imperatives in an era of increased environmental awareness and social responsibility. Many stakeholders are pressuring companies to integrate sustainability into their supply chains as environmental degradation and social inequality worsen. Therefore, it is essential to include non-traditional supply chain stakeholders, such as competitors and non-governmental organizations, in supply chain operations to produce an SSCG. This comprehensive literature review synthesizes and examines the current body of information on stakeholder prospects, responsibilities, and measuring quality performance in sustainable supply chain governance. Therefore, this study's primary objective is to clearly show how SSC practices are related to stakeholder roles and responsibilities. A thorough literature examination was conducted, and 40 peer-reviewed journal publications from 2019 to 2023 were included. In this work, expectations, as stated in scholarly literature, are methodically categorized, and any gaps are reviewed critically. A reasonable explanation for stakeholders' discontent with the sustainability performance measurement and evaluation methods used nowadays is that, as the literature review demonstrates, stakeholder expectations have yet to be considered. The findings indicate that many external and internal supply chain stakeholders drive, enable, or check the application of sustainable supply chain Governance techniques.While governments and non-governmental organizations are essential drivers of sustainable supply chain Governance techniques, research can also help with their implementation. Furthermore, proactive interaction with external supply chain stakeholders improves organizational learning by boosting understanding and awareness of sustainability and developing knowledge.

Leagile supply chains and sustainable business performance: application of total interpretive structural modelling

This study aims to develop an integrated model for the leagile (lean + agile) supply chain strategy to achieve sustainable business performance across the triple bottom line, including economic, environmental, and social performance. We draw upon a literature review and experts’ opinion, using total interpretive structural modelling (TISM), to determine interrelationships among leagile supply chain practices and sustainable business performance measures. To this end, first, unique and common practices of lean and agile supply chain strategies, i.e. leagile building blocks, are identified through a synthesis of the literature. Second, semi-structured interviews with four experts are conducted to gain an understanding of the mutual relationships among the leagile building blocks and to meticulously adjudicate their interactions with sustainable business performance measures. Validated by two independent researchers and literature enfolding, the final TISM model provides a 10-level hierarchical representation of the leagile supply chain strategy for sustainable business performance.

Sustainable performance measurement through digital transformation within the sustainable development framework: The mediating effect of supply chain concentration

AbstractThis study establishes a conceptual framework, “digital transformation – supply chain concentration – sustainable performance”, to address the existing knowledge gap and elucidate the nuanced connections between digital transformation, supply chain concentration, and sustainable performance. Indeed, the existing body of literature does not offer detailed analyses of the pathways and effects concerning the interplay among the three dimensions within the sustainable development framework. The model's foundation is rooted in stakeholder theory. By examining a sample of 3947 listed Chinese firms, this study's results highlight a noteworthy link between digital transformation and enhanced sustainable performance, assessed through the triple bottom line framework, thus helping to achieve sustainable development goals (SDGs), such as the eighth and ninth SDGs. This improvement is attributed to reducing supply chain concentration and promoting a diversified supply chain configuration. Furthermore, the correlation between digital transformation and sustainable performance settings demonstrates significant heterogeneity. This study enhances stakeholder theory by demonstrating that digital transformation and supply chain concentration contribute to sustainable performance, supporting the eighth and ninth SDGs and offering managers a pathway for sustainable development. It also calls for policies that promote digital transformation and diversified supply chains to improve societal welfare and sustainability practices.

A Need for Standardized Approaches to Manage Sustainability Strategically

This study aims to explore the challenges and opportunities associated with measuring and assessing sustainability impacts and investigate digitalization’s role in addressing these challenges. The study gathers stakeholders’ perspectives on strategically managing sustainability and employs a qualitative research approach, utilizing semi-structured face-to-face interviews with seven industry participants. The findings reveal that the measurement and assessment of sustainability impacts pose significant challenges due to the lack of standardized approaches and the diversity of evaluation methods. Companies have started to address these challenges by applying digitalization to standardize and streamline sustainability measures. Digital platforms and technologies are being developed to collect, analyze, and report sustainability data, providing a foundation for reliable and comprehensive sustainability reporting. This study contributes to the existing literature by highlighting the need for standardized approaches and digital platforms for measuring and assessing sustainability impacts. The findings emphasize the importance of integrating sustainability into corporate strategies, as well as the role of digitalization in enabling companies to focus strategically on the most important societal goals. The study also underscores the need for clear definitional parameters and accurate measurement of sustainability performance. Overall, this research highlights the potential of digitalization in driving meaningful change and promoting sustainability in economic, environmental, and social domains.

Improvement of the sustainable performance in a textile company using the lean-green methodology

The textile industry represents one of the greatest threats to the environment. It is the second most polluting industry, generating hazards with its solid waste, gas emissions, water pollution, among others. The objective of this research was to assess the effects of the implementation of the Lean Green methodology within the textile industry to optimize the sustainable performance of the companies and to address the problems of the sector mentioned above. The case study selected was the dyeing area of a Peruvian textile company where the Lean Green methodology was implemented in a sequential design of six phases to then evaluate its effects on sustainable performance. The findings show that the implementation of the proposed model improves water consumption by 18% and electricity consumption by 43%, which has a positive economic impact. Not only in the environmental area, there is also a 120% increase in productivity. The value of this proposal lies in the fact that it can be replicated in other companies in the sector, both locally and regionally. It was also proposed to include the operational criterion in the measurement of sustainable performance for a better dimensioning of the improvement.

Measuring Sustainability Performance in Non-profit Organizations in the Kingdom of Saudi Arabia

Measuring Sustainability Performance in Non-profit Organizations in the Kingdom of Saudi Arabia

Corporate sustainable development performance through top management team's transactive memory system and organizational resilience: A moderated mediation analysis

Addressing the measurement of corporate sustainable development performance (SDP) in economic, social, and environmental dimensions is a pressing global challenge. This study investigates the intrinsic impact mechanisms of the top management team's transactive memory system (TMT TMS) on SDP within Chinese manufacturing firms. It extends the analysis by introducing opportunity alertness (OA) as a moderating variable and organizational resilience (OR) as a mediating variable. Notably, OA was found to have a moderating mediation effect on the TMT TMS-OR-SDP pathway. Data from 294 executives was collected through non-probability convenience sampling. Initially, exploratory factor analysis was conducted utilizing SPSS; confirmatory factor analysis was performed with the aid of AMOS. Additionally, hierarchical regression and the SPSS PROCESS macro were employed to test the hypothesized models and paths of influence. The results illuminate the positive impact of TMT TMS on SDP through the enhancement of OR, a relationship further strengthened by OA. This study adds to the theoretical understanding and offers practical insights for optimizing TMT TMS and OA to achieve corporate sustainable development.

User-Centered Development of an Online Dashboard Tool for Economic Sustainability for Small and Medium Enterprises

This study aimed to improve an existing static benchmarking tool for the economic sustainability of small and medium enterprises (SMEs) in the wine sector to develop and elevate it into a dynamic online dashboard decision support system (DSS) for economic sustainability. Development was conducted in line with a user-centered-development process in four main steps. In the first step, producers’ expectations for an optimal tool were elicited using a qualitative approach of 24 in-depth interviews with long-term users of the existing PDF reports. Among the 10 requirements, producers requested an overall summary assessment of the most important KPIs of their business (including the provision of ideal values), intuitive visual presentations, long-term time developments, flexible reference groups, and short comments. Based on the wine producers’ systemized responses, the first version of the online benchmarking tool was designed and implemented in cooperation with experienced online designers and programmers. In the third step, a usability test was conducted to elicit options for further improvements that were implemented before the fourth step, the release of the final version to the industry. The systematic development process outlined and established here and the released DSS tool that is publicly available with open access provide valuable insights for institutions planning similar future dashboards for other sectors, particularly for SMEs. This constitutes an important step toward the development of more holistic support tools for sustainability performance measurement across all pillars of sustainability moving forward. To the best of the authors’ knowledge, the DSS developed represents the first online dashboard tool for economic sustainability for SMEs globally and in the wine sector.

Measuring sustainability performance with SWARA-MEREC-COBRA multi-criteria model: A case study of Anadolu insurance company

The aim of this study is to assess and rank Anadolu Sigorta Company's sustainability performance between 2018 and 2022 using the hybrid SWARA-MEREC-COBRA model. The sustainability performance evaluation criteria's importance weights were determined using both subjective and objective methods. The SWARA algorithm was used to determine the weights subjectively based on expert opinion, while the MEREC algorithm was used to determine them objectively. The final importance weights were obtained by combining the results of both methods. When evaluating the sustainability performance of Anadolu Sigorta Company, the most important criterion was total paper consumption, while the criterion with the least impact was the number of female employees. The COBRA ranking algorithm was used to rank the alternatives, and it was determined that the company's best sustainability performance was in 2022, while the worst was in 2018. Different sensitivity analyses were used to test the consistency of the proposed model.