Promoting Corporate Sustainability Research Articles

Industry 4.0 technologies and circular economy synergies: Enhancing corporate sustainability through sustainable supply chain integration and flexibility

Recently, an increasing number of firms have embraced sustainable supply chain practices to reduce negative environmental and societal impacts in their supply networks. The adoption of a circular economy framework has become popular among many businesses as a strategic approach to achieving sustainable development goals. This involves turning used products into new items with different uses, aligning with wider corporate sustainability aims. The advent of Industry 4.0 initiatives holds the potential to exert a transformative influence across entire business systems, redefining the manner in which products are conceived, manufactured, distributed, and disposed of. The present study undertakes an inquiry into the interconnections linking Industry 4.0 capabilities, green supply chain integration (GSCI), flexibility in sustainable supply chain management (SSCF), and the utilization of circular economy capabilities (CEC) within the context of corporate sustainability performance (CSP). Based on a comprehensive survey of 256 manufacturing organizations, the study highlights the importance of integrating dynamic capabilities like GSCI and SSCF within I4.0 and CE strategies. The collected data reveal the transformative influence of GSCI, SSCF, and I4.0 on enhancing CEC and promoting corporate sustainability. Given these insights, recognizing and harmonizing vital Industry 4.0 technologies with circular economy capabilities proves valuable for organizations aiming to enhance corporate sustainability through informed decisions.

Energy intensity constraints and corporate investment strategies: Evidence from Chinese listed enterprises

This study theoretically analyzes and empirically tests the impact and mechanism of energy intensity constraints on corporate investment strategies. The results find that energy intensity constraints significantly increase corporate green investment, particularly in front-prevention investment. Heterogeneity analysis indicates that the optimization effect of energy intensity constraints on corporate investment strategies is stronger in state-owned enterprises and high energy-consuming industries. Mechanism analysis reveals that energy intensity constraints optimize corporate investment strategies by increasing policy incentives and policy restraints. The findings provide important implications for policymakers to promote corporate sustainability and potential directions for future related research.

Financial inclusion and sustainable development of banks: the place of organization of Islamic cooperation (OIC) in emerging markets

PurposeThis study examines the impact of financial inclusion on the corporate sustainability of banks in both Organization of Islamic Cooperation (OIC) and non-OIC emerging economies, considering the COVID-19 pandemic.Design/methodology/approachThe research utilizes data from 3,159 bank-years from 2007 to 2021 across 33 emerging markets.FindingsEmpirical findings indicate that firms operating in higher financial inclusion developing countries tend to exhibit higher levels of sustainable development. This positive relationship has become even more pronounced during the COVID-19 pandemic, suggesting the importance of financial inclusion in fostering corporate sustainability, especially in times of economic challenges. Interestingly, while the positive correlation between financial inclusion and sustainable development remains consistent across both OIC and non-OIC countries, firms in OIC countries do not show significant changes during the pandemic.Practical implicationsThis observation suggests that the pandemic’s impact on corporate sustainability may vary between the two groups of countries. This study highlights the significance of financial inclusion in promoting corporate sustainability in developing economies. In times of recessions when accessing finance becomes expensive, policymakers in OIC countries should identify firms that adhere to Islamic principles, such as those sensitive to interest rates, and provide them with targeted support. This assistance can enable these companies to compete effectively and achieve their financial sustainability objectives.Originality/valueThere has been no attempt to investigate the effect of financial inclusion and the pandemic on the sustainable development of banks in developing countries.

The role of trade associations in promoting corporate sustainability transition and reporting: A case study in the food supply chain

AbstractThis study seeks to examine the interconnections and potential influencing factors between firms' sustainability initiatives and the pressures exerted by industry associations for sustainability reporting. Given the reluctance of many firms to disclose their sustainability efforts, particular attention is directed toward the Italian meat and cured meat industry, with a focus on uncovering the drivers that link firms' sustainability actions to the level of engagement by industry associations in promoting sustainability reporting. Employing a multiple case study design, this research adopts a qualitative and interpretative methodology, leveraging semi‐structured interviews to elucidate pertinent strengths and weaknesses associated with both external and internal factors, as well as managerial strategies. Encompassing various stages of the supply chain, from genetic selection and animal husbandry to processing and distribution, this study aims to bridge a gap in the existing literature on sustainability reporting by shedding light on firms' approaches to both reporting and action. Furthermore, it offers novel insights into the often‐overlooked meso‐level factors influencing firms' propensity for sustainability reporting, including the role played by trade associations.

The German Supply Chain Act – A Sustainable Regulatory Framework for Internationally Active Market Players?

On January 1, 2023, the German Act on Corporate Due Diligence in Supply Chains (LkSG) entered into force. It is the most important step taken so far by the German legislature in terms of promoting corporate sustainability and protecting human rights in globalized supply chains. Unfortunately, however, it did not make use of the opportunity to take on a pioneering role in the broader comparative context. The authors conduct a critical analysis of the sustainability concept of the Act, as well as its provisions on scope and enforcement. In both aspects, the Act falls short of expectations; it does not introduce a comprehensive concept of sustainability, small and medium-sized enterprises are excluded from the scope of application, and comprehensive due diligence along the supply chain is not achieved. On the enforcement level, the main weakness of the LkSG lies in its exclusion of civil liability.

Occupational Safety & Health Management and Corporate Sustainability: The Mediating Role of Affective Commitment

BackgroundOccupational safety & health management (OSH) has garnered greater attention for its significance in promoting corporate sustainability for organizations in recent decades. The construction industry, in particular, is a major contributor to Malaysia's thirst for corporate sustainability in order to provide long-term support for the country. Thus, the main tenet of this study is to examine the mediating effect of employee affective commitment on the relationship between OSH and corporate sustainability. MethodsA questionnaire was administered to 273 full-time employees of listed construction companies in Malaysia. Smart PLS software version 3 was used to test the proposed model and hypotheses. Both the measurement model and the structural model were evaluated. ResultsAccording to the findings, OSH and its dimensions are positively related to employee affective commitment. Employee affective commitment, on the other hand, has been found to be significantly related to corporate sustainability and its dimensions: economic, social, and environmental sustainability. Apart from this, the prominent results reveal that employee affective commitment partially mediates the relationship between OSH and corporate sustainability and its dimensions: economic, social, and environmental sustainability. ConclusionThis empirical finding adds to the existing literature in explaining how OSH and affective commitment led to corporate sustainability. Several implications are offered to various stakeholders, such as construction companies, policymakers, and relevant regulators.

Striving for sustainable development: Green financial policy, institutional investors, and corporate ESG performance

AbstractEnvironmental, social, and governance (ESG) practices play an increasingly important role in achieving sustainable development goals. Drawing on institutional theory, this paper empirically explores whether and how green financial policy affects corporate ESG performance. Taking China's pilot policy for green finance reform and innovation (GFP) as a quasi‐natural experiment, we employ the difference‐in‐differences model to investigate the causal relationship between green financial policy and corporate ESG performance. We find that the GFP significantly improves corporate ESG performance. The results are robust to a series of checks such as parallel trend examination, placebo test, mitigation of omitted variable bias, alternative variables, and the exclusion of contemporaneous policies. The heterogeneity analysis shows that the positive impact of GFP on corporate ESG performance is more pronounced for firms with tighter financial constraints, higher agency costs, and more external pressures. On this basis, we further document that the positive impact of GFP on corporate ESG performance is more pronounced for investee firms with more institutional ownership. The above findings indicate that the formal institution of government‐led green financial policy can positively affect corporate ESG performance, and market participants‐institutional investors help to strengthen this policy effect. Overall, our study sheds light on the significant role of green financial policy in promoting corporate sustainability.

ESG performance after the stock price crash and the role of foreign investors

This research explored ESG rating changes after stock price crashes and the impact of foreign investor ownership and investment horizons. Using regression analysis and data from Korean listed firms from 2012 to 2020, we observed an improvement in ESG ratings following stock price crashes. However, higher foreign ownership did not necessarily lead to higher ESG ratings in crashed firms, except for those with long-horizon foreign ownership. The results were consistent when considering crash causes and robust in sensitivity analyses. The research sheds light on factors influencing ESG ratings and emphasizes the significance of stock price crashes and foreign investor ownership in promoting corporate sustainability.

Cross-sector collaborations in global supply chains as an opportunity structure: How NGOs promote corporate sustainability in China

Cross-sector collaborations in global supply chains as an opportunity structure: How NGOs promote corporate sustainability in China

How Does Digital Transformation Increase Corporate Sustainability? The Moderating Role of Top Management Teams

Digitization is a megatrend that shapes the economy and society, driving major transformations. Enterprises, as the most important microeconomic entities, are critical carriers for society in conducting digital transformation and practicing sustainable development to achieve socioeconomic and environmental sustainability. Exploring the relationship and mechanisms between digital transformation and sustainable corporate development is crucial. This study investigates the influence of digital transformation on sustainable corporate development as well as its moderating mechanisms. A two-way fixed effects model is used on a research sample of Chinese A-share listed companies in Shanghai and Shenzhen from 2010 to 2020. Three methods are used for robustness testing to alleviate endogeneity issues. The empirical results show that digital transformation can significantly enhance sustainable corporate development, whereas empowered management and highly educated employees are essential complementary human resources that effectively strengthen the contribution of digitalization to sustainability. Additionally, internal controls are internal drivers that have a positive moderating effect on the digital transformation to improve corporate sustainability. This study reveals that digital transformation is an important tool for promoting corporate sustainability, broadening the literature in related fields, and providing insights for corporate management and government policymakers to advance corporate sustainability.

Digital Finance and Corporate Sustainability Performance: Promoting or Restricting? Evidence from China’s Listed Companies

The development of internet platforms and information technology has accelerated the transformation of conventional finance. Emerging digital finance is expected to optimize the allocation of credit resources and thereby promote a sustainable transition for corporations. However, whether, and to what extent, digital finance empirically affects this process is still not well understood. This paper investigates the role of digital finance in promoting corporate sustainability performance by exploring its impact on green enterprise innovation and its mechanism using a two-way fixed effects model and a mediating effects model. The findings suggest the following: (i) The impact of digital finance on the sustainable performance of enterprises follows a U-shaped (coef. = 0.00, t = 2.43) pattern, where digital finance initially restricts and then promotes the sustainable performance of enterprises. This conclusion remains robust even after considering endogeneity. (ii) The mechanism analysis indicates that digital finance enhances sustainability performance by reducing corporate financial volatility (coef. = −0.00, t = −4.06) and promoting long-term performance growth (coef. = 6.69, t = 4.88). (iii) The positive effects of digital finance on sustainability performance are more significant for non-state-owned firms (coef. = 0.00, t = 5.42), firms located in cities with a lower GDP per capita (coef. = 0.00, t = 2.40), and smaller firms (coef. = −0.00, t = −2.59) in their initial stages. These results imply that China should accelerate digitization in the financial markets and thus further develop its potential for sustainable development.

Crowdsourcing Compliance: The Use of WikiRate to Promote Corporate Supply Chain Transparency

Abstract This article analyzes the use of crowdsourcing to promote corporate sustainability by assessing compliance with supply chain disclosure laws. It draws on a case study of WikiRate.org as a novel example of crowdsourcing compliance with respect to the UK Modern Slavery Act and U.S. conflict minerals legislation (section 1502 of the Dodd-Frank Financial Reform Act). WikiRate is an open research platform whose mission is to crowdsource better companies by motivating corporations to be transparent about their environmental, social, and governance performance. In particular, WikiRate’s projects on modern slavery and conflict minerals harness the power of citizens to evaluate the quality of corporate disclosures produced in accordance with these laws. Following an analysis of its projects on modern slavery and conflict minerals, I evaluate the challenges of using crowdsourcing to assess legal compliance, including the potential manipulation of data and the difficulty of relying on non-expert citizens to assess complex information in corporate disclosures. I argue that one must identify the appropriate “crowd” that would be most capable of assessing compliance with a given law. While crowdsourcing platforms such as WikiRate invite a broad range of stakeholders to assess compliance, the reality is that only a limited set of individuals may be able to meaningfully participate given the complexity of supply chain disclosures. Thus, “expertsourcing” may be a more appropriate tool for assessing compliance with certain laws as it limits participation to citizens with specialized expertise.

How do ESG affect the spillover of green innovation among peer firms? Mechanism discussion and performance study

This study presents a theoretical framework for studying the green innovation spillover effect from corporate environmental, social, and governance (ESG) and explores the underlying influence of this effect on sustainability performance. By regressing panel data on China’s A-share listed enterprises from 2012 to 2020, the results support that the ESG of focal companies have significant green innovation spillover effects in the industry, that occurs through the alleviation of financing constraints and improvement in the executive environmental protection awareness of peer enterprises. Notably, industrial enterprises are constrained by their own attributes, therefore, this effect is not obvious, however, the ESG of non-industrial enterprises can guide peer companies to adopt green innovation behaviors and improve sustainability performance. This study enriches our understanding of ESG. Furthermore, our findings have important implications for accelerating the construction of countries’ ESG systems, promoting corporate sustainability, and implementing emission-reduction targets.

ESG-based remuneration in the wave of sustainability

ABSTRACT By investigating ESG-based remuneration in the UK FTSE 350 companies, this article finds that in practice, ESG-based remuneration may depart from its expected role in promoting corporate sustainability, whereas being adopted as a tactic for impression management or managerial rent extraction. Due to the unmeasurable effects of most ESG factors on shareholder value and their subjective nature, ESG-based remuneration is vulnerable to exploitation for symbolic and self-serving purposes. For companies aiming to promote long-term shareholder value, extending the assessment period of financial performance is a less costly and risky option compared to ESG-based remuneration. Differently, for companies oriented by a stakeholder purpose, ESG-based remuneration may play a part in incentivising executives to achieve plural stakeholder interests. To mitigate the risk of exploitation, this article proposes rule tightening in the current disclosure and monitoring frameworks for executive remuneration.

Proactive contract theory in the context of corporate sustainability due diligence

The article discusses how proactive contract theory could be used to translate the ambitious objectives of the European Commission's current draft proposal on corporate sustainability due diligence into actual business practices in complex value chains and networks. Proactive contract theory regards contracts as legal, economic, managerial and social artefacts that should be designed to prevent undesirable results and promote favourable outcomes. Moreover, the theory highlights the need for multiprofessional collaboration and user-centricity in contract design. Based on these principles, we introduce four ways to promote corporate sustainability due diligence in supply contracts via proactive contracting: turning from one-sided safeguarding towards shared responsibility and collaboration, incentivizing responsible and sustainable business practices via promotive contract clauses, engaging end users in the contract design process and preventing disputes.

Corporate Sustainability Strategies Are Often Easier Said Than Done

This study aims to analyse how contemporary stakeholder-engagement methods can enhance and acknowledge stakeholders' voices in the CSS and ensure better outcomes. Hence, this paper aims to narrow this gap by developing specific aspect profiles for sustainability strategies. The method of the current study relied on both primary data and secondary data. Hence, a questionnaire survey was developed to collect the required data. While, secondary data sources are obtained through the website sustainabilityexcellence.com. The data processing techniques were carried out using Stata 16 software and using the Multiple Linear Regression method. The sample of the study consisted of 422 people from different Gulf Cooperation Council (GCC) i.e. Saudi Arabia, UAE, Bahrain, Kuwait and Oman. The results revealed a high degree of stakeholders' perception of corporate sustainability strategies in the GCC. Also, people are aware and ready to afford the cost and efforts to generate more reliable and advanced strategies that promote corporate sustainability. The study also underscores three suggested recommendations that are based on a novel model (Reachable, Meaningful, and Fun “RMF”), as each element of this model is a recommendation that It believed to be highly-impactful actions that supports corporate leaders/teams to engage more fruitfully with stakeholder (more specifically customers and communities) and enrich the CSS. Lastly, this research effort is concluded with implications on the suggested recommendation (RMF), followed by some of the most critical takeaways for our corporate practices. The paper helps companies that already commit to sustainability to verify whether they are consistent in the implementation of a distinct sustainability strategy.

The Role of Sustainable HRM in Promoting Corporate Sustainability

The quest for greater sustainability is one of the most serious and important undertakings of our time. In investigating the transformation towards enhanced corporate sustainability, HRM has been attributed substantial potential to contribute to more sustainable business practices. Taking into account previous conceptual work on sustainable HRM, this qualitative study conducted in Germany explores how HRM professionals perceive their roles in promoting corporate sustainability, what tensions associated with the alignment of corporate sustainability objectives and divergent stakeholder demands they experience, and which practices they use to mitigate those tensions. Discussing our rich empirical data in the context of paradox theory, we propose an explanatory framework considering the three identified HRM roles for promoting social, ecological, and financial sustainability, the categorization of perceived tensions between corporate sustainability objectives, and indications on how HR professionals address those divergent goals, which explains how sustainable HRM can contribute to corporate sustainability and, eventually, to corporate success. We point to the specific need to better understand the ability of HRM professionals to capture paradoxical tensions, create dynamic capabilities for sustainable HRM and design mitigating practices. From our findings, we derive practical implications and suggest avenues for future research.

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.

Analyzing the Concept of Corporate Sustainability in the Context of Sustainable Business Development in the Mining Sector with Elements of Circular Economy

Promoting the concept and principles of sustainable development at the micro level requires that industrial companies understand and improve approaches to managing corporate sustainability. Currently, economics does not provide a universal definition of what corporate sustainability is. With regard to the mining sector, corporate sustainability issues reflecting the viability, value, and sustainable development potential of companies have not yet been studied extensively. The article discusses the conceptual foundations of corporate sustainability; the characteristics and a classification of approaches to defining corporate sustainability; and the relationship between corporate sustainability, sustainable development at the micro level, and circular economy. By analyzing the example of Russia, the influence of the mining industry on the environmental, economic, and social development of both a country with a resource-based economy and individual mining regions is shown from the viewpoint of sustainability. The distinguishing features of mining companies, which include natural capital and mineral assets, are studied in the context of promoting corporate sustainability. It is proven that the effective corporate management of ESG factors results in environmental and social influence that goes in line with sustainable development requirements and serves as a foundation for corporate sustainability. A refined definition of corporate sustainability has been formulated, the specific features of corporate sustainability management in mining companies have been determined, and the specific features of corporate social responsibility have been studied. The issue of integrating circular economy elements into the corporate sustainability concept is discussed, and it is claimed that the inclusion of circular business models in the corporate strategies of mining companies will contribute to their corporate sustainable development and boost their contribution to the achievement of sustainable development goals.

Exploring the Use of Mobile Apps for Fostering Sustainability-Oriented Corporate Culture: A Qualitative Analysis

Information systems (IS) play a central role in promoting corporate sustainability and pro-environmental behavior. This study explores the use of mobile apps for fostering sustainability-oriented corporate culture. It accentuates issues relating to sustainability-oriented corporate culture (RQ1), app meta-requirements as a strategic approach to addressing these issues (RQ2), as well as design and implementation principles (RQ3). Referring to the literature on sustainability apps, gamification, and nudging, our qualitative research design combines an analysis of four corporate apps intending to promote sustainable behavior and expert interviews (Grounded Theory). The proposed framework supports the planning, realization, and monitoring of this targeted app use. Single cultural dimensions inform seven issues in culture development. Five meta-requirements address this multi-dimensionality, challenges provided by new digital working environments, and principles of Green IT. Four design principles support, extend, and integrate current knowledge on app features, nudging, and gamification. Five variables determine the app intervention and maturity level. We conclude that this targeted app use should intend to foster the sustainability orientation within all dimensions of corporate culture instead of being limited to promoting sustainable behavior.