Sustainability Compliance Research Articles

Are Cement Sector Companies Listed on Indonesia Stock Exchange (IDX) Compliant in Sustainability Reports Disclosure?

This study aims to analyze the level of compliance in the disclosure of sustainability reports to cement sector companies listed on the Indonesia Stock Exchange (IDX) use Intiative Global reporting (GRI). The objects of this study are PT Semen Baturaja (Persero) Tbk, and PT Semen Indonesia (Persero) Tbk. The research method used is qualitative with secondary data, namely the sustainability report in 2021. The data collection technique in this study is documentation through the company's website. Data analysis techniques using data collection, data recording, and data analysis and interpretation. The results of this study show that PT Semen Baturaja (Persero) Tbk has a partially applied compliance rate in the disclosure of GRI general standards of 48.75. Meanwhile, PT Semen Indonesia (Persero) Tbk has a Partially Applied compliance rate with a higher percentage of 59.37%. The limitation of this study uses secondary data, therefore future studies can use primary data and expand the range of standards used in research. Previous research on sustainability compliance is still small, therefore this study can be a reference for future research by developing the limitation.

Testing of Market Efficiency of BSE GREENEX: An Empirical Analysis

According to the United Nations Principle for Responsible Investment, an investment in a non-ESG compliance company has 28% higher risk per annum as compared to an ESG compliance company. Such company has a positive relationship with the financial performance and the investors cannot outperform these stocks as the information about sustainability compliance is readily available in the market. This concept is of the Efficient Market Hypothesis. Employing a quantitative research design, this study considered 17 companies of BSE Green Index that has considerable ESG scores and extracted their daily, weekly and monthly data to examine and understand its stock return movement and to test whether it follows the Efficient Market Hypothesis. This study makes use of the various statistical tools such as the Run Test, Auto-correlation Function and the Unit Root Test. Summarising the results of run test, Auto-correlation Function and two-unit root test i.e., Augmented Dickey Fuller test and Philips-Perron, it statistically confirmed the findings that the daily, weekly and monthly stock return series of the 17 stocks of BSE Green Index do not obey the ‘Random Walk Hypothesis’ which is the key findings of the study and hence rejects all the three hypotheses of the study. Backing the empirical findings of this study, it would be rational to state that the concept of the Efficient Market Hypothesis does not hold good in the BSE Green Index of the Indian Stock Market and this finding would be very imperative to the investors concerned about their investment decisions with regard to sustainability practices.

Go-Brown, Go-Green and smart initiatives implemented by the University of Delhi for environmental sustainability towards futuristic smart universities: Observational study

Go-Brown are brown agendas that focus on protecting the environment and health of the current students yielding immediate results. Go-Green are green agendas that aim to protect the environment and health of the future students yielding long-lasting results. Smart initiatives are implemented on the university infrastructure to preserve our ecosystem. It is important to create sustainability awareness in the students and implement these initiatives in universities' infrastructure. There are limited studies on these initiatives' implementation, which creates a research gap. The research question is whether the University of Delhi (DU) is implementing these initiatives for creating sustainability awareness among students to put them on a sustainable path. The research objectives are to assess whether the DU colleges are implementing these initiatives; highlight new definitions of sustainability agendas into Go-Brown, Go-Green, and Smart categories pertinent to the education system and study them step-wise; study sustainable environment indicators: water, waste, air, land and energy; and conceptualize the “Educational Institutional Environmental Sustainability Stars” Theory and Rating System. This study selected Go-Brown, Go-Green and Smart parameters from water, waste, air, land and energy and conducted an assessment survey in 30 colleges on their sustainability compliance and evaluated them through a statistical analysis. It recommends implementation of these initiatives by the Government of India to develop futuristic smart universities, inculcate the “Educational Institutions Environmental Sustainability Stars” Theory and Rating System in the Indian educational system and to frame regulatory sustainability laws. Limitations are whether the outcome of this study conducted on 15 parameters in 30 DU colleges can be applied to all India's educational institutions; and whether the implemented initiatives have influenced the students to take them forward. The smart university modelling features inclusive of smart environment, smart infrastructure and smart education solutions with their interdependent relationship and various stakeholders can lead to future research.

Agricultural certification as a complementary tool for environmental law compliance

Agricultural sustainability standards are an important way of reducing commodity expansion's pressures on biodiversity. Despite the increase of global area under certification and mounting evidence of positive socioeconomic outcomes, certification-derived conservation benefits are less clear. We applied a robust counterfactual approach with a difference-in-difference methodology to quantify the environmental consequences of certification in one of the largest coffee-producing areas in the world, in southern Brazil, within the Atlantic Forest and Cerrado biomes. We evaluated whether the adoption of certification standards affected native vegetation regeneration and deforestation, the proportion of vegetation deficit within each farm (the required area to achieve Federal Legislation required vegetation cover), and the conservation of sensitive vegetation protected under law across 531 certified farms. We did not detect certification-derived effects on the natural vegetation cover deficit and on deforestation and regeneration rates, which were low for certified and non-certified farms. However, we found that certified farms are restoring more sensitive areas than non-certified farms in the Atlantic Forest, which indicates a potential combined effect between law enforcement and certification. We suggest that in more consolidated landscapes, certification beneficial impacts on deforestation and regeneration might be more limited than observed in areas with weaker governance, such as agricultural frontiers or low-income countries. However, our results demonstrate the potential for certification schemes to complement and promote environmental legislation compliance. These potential combined effects between private sustainability standards and compliance with government environmental policies could provide a potent tool for improving the effectiveness of certification schemes in other high-biodiversity landscapes.

Improving Indonesia’s timber legality and sustainability verification system: Proposals based on case studies of natural forest-, corporate tree plantation- and smallholder-based value chains

All Indonesian wood value chains are regulated by a national Timber Legality and Sustainability Verification System (SVLK), based on timber legality and forest sustainability standards. We draw on three prior case studies, of natural forest-, corporate plantation-, and smallholder- based wood products value chains, to investigate SVLK architecture, implementation and compliance; and on regulatory theory to interpret these results and suggest how SVLK might be improved. Case study results demonstrate that SVLK has fostered legality and sustainability compliance in the natural forest- and corporate plantation-based value chains dominated by large-scale actors, but not in the smallholder-based chain in which the majority of actors are also small-scale. Results also reveal problematic elements of SVLK related to the roles of both large- and small- scale actors, legality and sustainability standards, a fragmented wood traceability system, inadequate independent monitoring and witness auditing, ineffective compliance mechanisms, and small-scale actors. Recent revisions of SVLK have not addressed these limitations, and we propose improvements: revisiting national legality and sustainability standards, placing more emphasis on field performance in sustainability assessments, limiting auditors’ flexibility, integrating all online wood systems and limiting access to only SVLK-verified actors, adopting a product classification, and increasing resources for and the frequency of witness audit and independent monitoring. Stronger cooperation between responsible Ministries and agencies is necessary to improve compliance. SVLK could learn from and cooperate with voluntary certification systems to develop more ‘joined up’ timber legality and forest governance regimes in Indonesia.

Sustainable development assessment of incentive-driven shared on-demand mobility systems in rural settings

BackgroundIn the light of the sustainable development goals, a set of operationalizable criteria quantifying societal benefits versus costs is needed to prepare for the introduction of an incentive-driven, high adoption shared on-demand mobility service in a rural transportation area. Aiming to reduce still-existing uncertainty about the impacts of a market entry and to balance substantial monetary incentives for suppliers of pooled rides with the progress in net GHG emission reduction and accessibility gain, the framework is applicable at the transactional and/or aggregate level.ResultsThe presented set of indicators is decision-oriented, and applicable both at the transactional and macro level. Scenarios and user choice situations for two regulatory options of demand responsive transport—one in line with the current legislation in Germany, avoiding overlap with existing fixed-route scheduled public transport and one not strictly complementary which assumes direct competition—are formalized. By the help of a case study, the outcome of the different organizational models at three levels of incentivization can be systematically compared. The implementation effort of the assessment method is examined in view of the forthcoming sustainability compliance reporting in this sector.ConclusionsA system-optimal constrained public private DRT deployment offers the opportunity of a reduction of uneconomic routes and parallel services upon selection of eligible rides. As shown, a crowding out of existing, publicly financed offerings in an unsaturated mobility market should not be the primary concern. At the contrary, resorting to supply-side incentives, a proportion of the high volume of solo car trips could be consolidated while levels of service improve in total. However, this may be associated with considerable expense, as demonstrated by the quantity structure of the provided case study.

Ideation Stage STEM Entrepreneur’s Cognitive Frame on Sustainability: A Leadership Development

There are consistent appeals for STEM (Science, Technology, Engineering and Mathematics) entrepreneurial efforts, to sync with real-world problems and sustainability. Even though most entrepreneur acknowledge their efforts for tackling sustainability concerns, it is uncertain how serious they are or whether they truly comprehend the basic sustainability understanding. So, it’s important to have a critical understanding of underlying cognitive components that drive the sustainability leadership paradigm, as young entrepreneurs find it difficult to interpret and make sense of it. By using a cognitive approach to sustainability leadership development, the current investigation looks at how nascent entrepreneurs think about sustainability leadership and how they make sense of them to be sustainability leader. Qualitative data from 113 ideation stage startups showed that sustainability leadership identity is associated with implicit leadership theory and leadership-structure schema. Sustainability Leaders were categorized as sustainability agnostic leaders, sustainability compliance leaders, situational sustainability leaders and sustainability evangelists. Managerial and policy for nurturing sustainability leadership development are discussed.

A-contrario structural inference for space object detection and tracking

Monitoring space assets for safety and sustainability compliance requires active measurement of positional information, commonly done via optical remote sensing in which image-frame coordinates are extracted from a high-noise environment of stellar, atmospheric, and hardware features. This task has been traditionally approached by using a-priori models to differentiate potential Anthropogenic Space Objects from the background noise. Source extraction and track-before-detect methods rely on absolute pixel intensity thresholding and require substantial processing to remove noise (stars, hot pixels, etc.), while machine learning shows promise in reducing processing and improving low-visibility performance but requires context-specific labeled training data. We introduce a new approach based on a-contrario detection, arguing that any space object must be unattributable to noise using a sequence of low-fidelity hypotheses. Through this approach, we aim to relax the dependency on a-priori assumptions of data content and improve performance where high-quality data is sparse, poorly labeled, or challenging to characterize, e.g., in satellite-based applications, and provide detection confidence measures from individual data content to enhance risk evaluation for orbital populations. We present an initial qualitative proof-of-concept for our a-contrario approach using data collected by the ASTRIANet telescope network, showing potentially strong performance on Medium Earth Orbit observations for both rate and sidereal-tracking telescope modes. We also discuss how our approach handles epistemic uncertainties, i.e., a lack of a-priori model information, with implications to Type I and Type II error sources and potential mitigation steps when considering Low Earth Orbit observations with higher tracking noise.

Agricultural biomass supply chain resilience: COVID-19 outbreak vs. sustainability compliance, technological change, uncertainties, and policies

The COVID-19 pandemichas caused a confounding collection of transportation, supply chains, and logistical disruptions, which needs to be well addressed by businesses and governments. During this pandemic, several researchers have concentrated on the sustainability and resilience of supply chains in various industry sectors. Nevertheless, the impacts of the pandemic on sustainability pillars, technological change and uncertainties, and resilience approaches in various sectors have not been clarified yet. More specifically, the agricultural biomass sector has experienced serious disruptions induced by the COVID-19. This paper aims to analyze and assess the agricultural biomass supply and production systems during the COVID-19 and their recovery in post-COVID-19. To the best of our knowledge, this is the first study to evaluate the economic, environmental, social, and technological change effects of the COVID-19 on Biomass Supply Chain resilience. Uncertainties of oil and palm energy demand, price, consumption, export, and production of leading producers and suppliers worldwide are analyzed considering the pre-COVID-19 and current COVID-19 period. It is then followed by recommendations for specific strategies, policies for the biomass industry, and general action plan to overcome the problems of resilience in medium, short, and long-term horizon plans. The findings from this study are valuable resources for the governments, biomass industry, and other stakeholders to provide cleaner post-pandemic energy production and supply and enhance the employees’ engagement.

Hybrid Approach to Corporate Sustainability Performance in Indonesia’s Cement Industry

This study aimed to create a solid framework for decision-making in Indonesia’s cement industry, emphasizing those factors which bring about the most impactful results. The framework was developed using the fuzzy Delphi method, the fuzzy decision-making trial and evaluation laboratory, and a fuzzy Kano model. This study builds a hierarchical structure to approach the impact of corporate sustainability performance. We classify important factors into causes or effects and further identify those factors which are critical to improving the performance of Indonesia’s cement industry. Although corporate sustainability performance is a crucial topic in today’s business environment, sustainability strategies remain underrated in Indonesia. We confirm the validity of 19 factors within the following dimensions: environmental impact, social sustainability, economic gain, technological feasibility, and institutional compliance. The sub-dimensions of community interest, risk-taking ability, and regulatory compliance were identified as causes of perceived risks and benefits. In contrast, the following factors were identified as critical to improving corporate sustainability performance: renewable energy resources, contributions to charity, the perception of management regarding technology as a differentiator, and firm readiness to collaborate with high-tech companies.

Blockchain Technology in Wine Chain for Collecting and Addressing Sustainable Performance: An Exploratory Study

Sustainability standards have not yet been commonly adopted by the whole wine chain, and indicator assessments are not widely spread. A deep understanding of how embedding sustainability into business while controlling costs related to the adoption of sustainability certification standards such as data collection and management practices could allow one to overcome most barriers relevant to sustainability compliance. Blockchain technology (BCT) may answer these needs. In order to verify BCT potential to be used as a sustainability management tool in the wine industry, with a qualitative triple bottom line research approach, this article explores the connections among BCT adoption in agri-food, issues posed by wine sustainability certification, and whether wine companies that already own a wine sustainability certification are prepared to adopt it. Results show that (1) the blockchain allows collecting data and information that are relevant for monitoring and improving sustainability: Soil and water features, climate conditions, treatment with pesticides and fertilizers, production process, traceability, transparency, labor and human rights, quality and safety, waste reduction, authenticity, relationship with stakeholders; (2) wine companies that already own a sustainability certification have little familiarity with blockchain applications (57.1%, n.21) and only 14% of the respondents support their intention to invest in BCT in the coming years; (3) the case study shows improvements in traceability and transparency along the supply chain and an increase in consumers’ trust that was reflected in sales growth, and the main costs are linked to complexity in data management.

New wine in old bottles: governing logics for applying sustainability management control systems in Austrian electric utilities

Purpose Literature shows that a strong link between sustainability control systems and sustainability management (SM) fosters sustainability development (SD) and compliance with regulatory requirements and stakeholder expectations. Research on the integration of SM and its control mechanisms in corporate business remains scarce. This study aims to focus on Sustainability Management Control Systems (S)MCS applied in Electric Utility Companies (EUC), which experience close scrutiny by its stakeholders in as much as they play an important role in climate change agendas. Design/methodology/approach The methodological approach includes in-depth expert interviews within seven Austrian EUC followed by qualitative content analysis. This study builds on “MCS as a package” by Malmi and Brown (2008). Institutional logics (IL) are used for the theoretical approach. Findings Results show that several IL are involved in implementing strategic SMCS in EUC. Managers cope by integrating emerging hybrid logics, selectively coupled SMCS and making sense by building a communication bridge between the strategic and operative levels to create awareness. Research limitations/implications Results show that managers in EUC have to acquire a new hybrid logic for SD. This implies the use of informal controls and a strong focus on administrative and cultural controls as the main control mechanisms for SM. Originality/value The paper contributes to MCS research by using the scarcely applied theoretical framework of IL. Findings facilitate a better understanding of the control mechanisms behind SM and the coping strategies of managers in applying SMCS.

Adoption of symbolic versus substantive sustainability practices by lower-tier suppliers: a behavioural view

Buying firms adopt various governance mechanisms to ensure sustainability compliance among upstream suppliers. While, certification is the most popular governance mechanism used worldwide, mounting evidence indicates that there is an incongruity in sustainability efforts between what is declared by supplier firms and their actual practices. Our empirical analysis of sustainable cocoa suppliers in Kerala (a state in South India) indicate that behavioural characteristics of suppliers, specifically their attitude towards risk and ambiguity can be used to assess suppliers’ tendency to adopt symbolic versus substantive sustainability postures. Risk aversion and ambiguity aversion were found to predict the sustainability posture of substantive (over symbolic) sustainability practices. Also, firm size and collaboration intensity played a significant role in supplier sustainability behaviour. The findings have important implications for academic research on sustainability, and policy implications for agencies charged with compliance with sustainability standards and guidelines. Finally, our study is beneficial for practicing managers who find it difficult to monitor sustainability compliance with respect to their supply base.

Challenges in extending sustainability across a transport supply chain

Purpose Sustainability approaches across product supply chains are well-known, while similar knowledge on transport supply chains (TSC) is limited. The purpose of this paper is to explore sustainability approaches and managerial challenges in extending sustainability across a TSC. Design/methodology/approach This paper presents a case study of a TSC with a shipper, a third-party logistics firm and a hauler. Each actor’s views on sustainability-related communication and relations with other TSC actors are analyzed through the lens of agency theory. Findings Each dyad in the TSC reveals different, more or less collaboration-based approaches. Challenges are revealed, including the lack of shipper understanding for the TSC context and the use of immature contracts, which disincentivizes sustainability compliance. The multi-tier study object reveals the silencing of distant actors and the need for actors to take on mediating roles to bridge information asymmetries. Research limitations/implications Combining literature perspectives (relations, communication and agency theory) provides a deeper understanding of the approaches applied and identifies different challenges. The inclusion of agency theory reveals principal problems such as information asymmetries between agents and less-informed principals and suggests complementary labels of supply chain actors. Practical implications Practical contributions include the highlighting of managerial challenges, which can aid managers in extending sustainability across TCSs. Social implications The case study method offers insights into collaboratively improving sustainability in supply chains (such as using contracts), thus having social and environmental implications. Originality/value The paper narrows knowledge gaps about managing sustainability among logistics service providers and analyzes data from multi-tier actors.

Nominated procurement and the indirect control of nominated sub-suppliers: Evidence from the Sri Lankan apparel supply chain

This article describes and discusses nominated procurement as a means through which buyers select sub-suppliers to achieve sustainability compliance upstream in emerging economies' supply chains. Hence, it critically examines the ways buyers articulate nominated procurement and the unfolding supply chain consequences. Based on in-depth interviews and fieldwork in the Sri Lankan apparel supply chain, the findings indicate that buyers accomplish sustainability compliance among their sub-suppliers while prioritizing their own business agenda. In doing so, however, buyers perpetuate “suboptimal compliance” of raw material suppliers and “sandwiching” of direct suppliers as harmful consequences on the supply chain. These consequences link theoretically with commercial, geographical, compliance and extended-compliance pressure. This article contributes to the advancement of the Sustainable Supply Chain Management literature by theorizing about nominated procurement, direct and indirect pressure, and pointing to the supply chain consequences beyond achievements in sustainability compliance.

COVID-19 and Corporate Governance Performance: Beyond the Financial Metrics

Corporate governance and more broadly, the performance of corporate boards have traditional been measured using financial metrics. These financial metrics like Return on Investment (ROI), Return on Assets (ROA), Return on Equity (ROE), Earnings and Profitability Ratio (E and P) are ex-post measure of organizations wellbeing or lack thereof arising from corporate board activities. These financial metrics are, for all intents and purposes, self-serving and one-dimensional measure of corporate performance. They do not fully account for the other dimensions of organization responsibilities especially, the social, health and environmental benefits expected from organization’s activities. The COVID-19 and the changing organizational dynamics have made the case for corporate board’s performance to be assessed beyond the usual financial metrics. In this study, we provide a framework that accounts for the various dimensions of organization activities: finance, social and environmental; the so-called Triple-Bottom (TBL) approaches. A TBL-compliance metric was used to track the performance of selected manufacturing firms in Nigeria using a content analytical technique. The result of the analysis showed that majority of the firms performed remarkably well in areas of profitability and economic value creation but performed less satisfactorily in areas of social and environmental sustainability. On aggregate, the sampled firms committed less than 1 percent of their profit after tax on corporate social responsibility while less than 5 percent of the sampled firms scored above average on the TBL-adoption matrix. From the findings of the study we can conclude that manufacturing firms in Nigeria are yet to be fully committed to social and environmental sustainability. The study recommended for a regulatory re-jig away from the usual mandatory declaration of commitment to concrete actions based on measurable indicators on social and environmental sustainability compliance.

Selective coupling as institutional response to sustainability development in electric utilities

Electric utilities are in an environmental sensitive industry, exploiting natural resources and contributing to climate change issues. The focus of critical stakeholders on sustainability agendas and management approaches and the increasing tight sector-regulations pressure electric utilities to act and distribute sustainability reports declaring their sustainability performances and goals towards achieving climate targets. However, literature criticizes the utility’s reporting practices as form of impression management being decoupled from actual sustainability compliance. This paper analyzes in light of institutional theory the compliance with or decoupling from sustainability agendas in the under-researched electricity sector by identifying the coverage of materiality in sustainability reports and the implemented sustainability management control systems for sustainability development. Quantitative and qualitative methods are used including correlation- and variance analysis of material indicators and expert interviews. This study contributes by having identified a sector-wide continuous form of selective coupling from the sustainability agendas in electric utilities. Furthermore, this paper found that sustainability agendas and the implementation of sustainability control mechanisms are governed by institutional hybrid logics which are still at an early stage.

Cloud/edge computing for compliance in the Brazilian livestock supply chain

Brazil is an important player in the global agribusiness markets, in which grain and beef make up the majority of exports. Barriers to access more valuable sustainable markets emerge from the lack of adequate compliance in supply chains. Here is depicted a mobile application based on cloud/edge computing for the livestock supply chain to circumvent that limitation. The application, called BovChain, is a peer-to-peer (P2P) network connecting landowners and slaughterhouses. The objective of the application is twofold. Firstly, it maximizes sustainable business by reducing transaction costs and by strengthening ties between state-authorized stakeholders. Secondly, it creates metadata useful for digital certification by exploiting CMOS and GPS sensor technologies embedded in low-cost smartphones. Successful declarative transactions in the digital space are recorded as metadata, and the corresponding big data might be valuable for the certification of livestock origin and traceability for sustainability compliance in ‘glocal’ beef markets.

The hidden costs of environmental upgrading in global value chains

Sustainability has become important in the operation of the global economy and its regulatory structure, leading significant shifts in the way powerful ‘lead firms’ in global value chains approach sustainability. In this paper, I argue that private, value chain-oriented forms of sustainability governance are not addressing the environmental problems they are putatively designed to solve. Through the analysis of how lead firms stimulate environmental upgrading along their value chains, I show that the mainstreaming of sustainability in business operations has allowed global buyers to accumulate ‘green’ profits and capital in ways that extract value from suppliers – especially those based in the global South. Drawing from analyses of the wine and coffee value chains, I show how lead firms push the hidden costs of sustainability compliance and related risks upstream towards producers. These processes have important redistributive repercussions as they raise entry barriers for smaller, less organized and/or more marginalized actors. Under the mantle of achieving environmental sustainability, lead firms in value chains stealthily capture value for themselves, while extracting more demands from their suppliers and promoting a further consolidation of their supply base. In the meanwhile, serious environmental challenges remain unaddressed.

The Direct and Indirect Control of Sub-Suppliers Through Nominated Procurement in Emerging Markets

Little is known in the Sustainable Supply Chain Management (SSCM) literature about whether and to what extent international customers (ICs) are able to control sustainability compliance (compliance) upstream in their supply chain. By drawing on the notion of direct and indirect control in business networks and qualitative fieldwork in the Sri Lankan apparel supply chain, this paper examines how ICs control nominated and second-tier sub-suppliers (nominated sub- suppliers) to manage compliance, as well as the implications for their first-tier (direct) suppliers. By unveiling the way ICs exert direct coercive control and indirect normative control on nominated sub-suppliers, our paper provides theorizing of nominated procurement and its effects expected to create valid or validatable insights for emerging markets. Crucially, our paper provides a tangible example of how the indirect control may be stronger than the direct one, yet have consequences for both direct suppliers, sub-suppliers but also raw material suppliers. Reactive patterns as expected in any network would be hampered by this indirect control, while creating ingredients of distrust with suppliers.