Sustainability Financial Performance Research Articles

ENHANCING BUSINESS SUSTAINABILITY THROUGH CSR: A CASE STUDY OF "BETTER LIVING IN MALAHING” IN THE PERSPECTIVE OF CARROLL'S PYRAMID

This study examines PT PKT's CSR initiative, "Better Living in Malahing," in relation to business sustainability and its alignment with the Sustainable Development Goals (SDGs). The research underscores the critical role of economic responsibility and profitability in sustaining both social and environmental goals. Using a qualitative case study approach, the study delves into the implementation of the CSR program based on Carroll's Pyramid of responsibilities, encompassing economic, legal, ethical, and philanthropic dimensions. Data collection methods include in-depth interviews, observations, and document analysis. Findings reveal that the program significantly improved the quality of life for coastal communities in Bontang while simultaneously bolstering the company's reputation. Moreover, a strong correlation between corporate social responsibility and sustainable financial performance is identified. The conclusion emphasizes that integrating CSR into core business strategies is crucial for long-term sustainability. This research contributes by illustrating the necessity of well-structured, enduring CSR initiatives in supporting economic, social, and environmental dimensions of corporate operations.

Synergy of Sustainable Financial Strategies and Sustainability Performance: A Case Study of PT Mitra Tani 27 (Top Leader of Agro-Industrial Companies in East Java)

This study aims to explore the sustainability strategies and how they impact the sustainability performance of PT Mitra Tani 27. This research is a type of qualitative research with a case study approach—the data collection for this research using in-depth interviews, documentation, and observations. In-depth interviews were established at different times by having personal interviews with the informant. The validity test of the data used the credibility testing approach and the transferability test. The study results show that the sustainable finance strategy includes six main principles: Trust, Competent, Harmonious, Loyal, Adaptive, and Collaborative. The company's economic performance illustrated increased sales intensity and volume, especially edamame production. The sales of edamame products have expanded to various countries, with a volume of 7,578 tons for the export market and 1,817 tons for the domestic market every year. The company's commitment to applying the 4R-based principles (Reduce, Reuse, Recycle, and Replace) describes the primary environmental performance. The company's social performance reflects its commitment to providing consumers with high-quality products and services.

Nexus among Digital Leadership, Digital Transformation, and Digital Innovation for Sustainable Financial Performance: Revealing the Influence of Environmental Dynamism

Nexus among Digital Leadership, Digital Transformation, and Digital Innovation for Sustainable Financial Performance: Revealing the Influence of Environmental Dynamism

Conceptual framework to improve financial performance via institutional pressures and voluntary environmental information disclosure

This study delves into the intricate relationship between institutional pressures and financial performance, with a focus on the mediating role of voluntary environmental information disclosure (VEID). Grounded in institutional theory and the resource-based view (RBV), the study investigates how coercive, normative, and mimetic institutional pressures drive firms to adopt VEID, which in turn impacts their financial performance. VEID plays a pivotal role in allowing firms to convey their environmental performance, promoting transparency, and bolstering stakeholder trust. This heightened trust significantly contributes to improved financial performance by enhancing the firms' reputation and credibility. In addition to external communication, VEID also acts as a mechanism for internal performance enhancement, aligning firms' environmental strategies with institutional pressures. Through the integration of VEID practices, firms are better positioned to meet regulatory requirements, align with stakeholder expectations, and enhance operational efficiency. The findings underscore the critical importance of integrating voluntary environmental information disclosure within both institutional and resource-based strategies to attain sustainable financial performance and ensure long-term success in a competitive and environmentally conscious market.

Responsible leadership and sustainable outcomes: a multi-study perspective of individual ambidexterity and knowledge sharing culture

ABSTRACT Based on social information processing, this study investigates the indirect effects of individual ambidexterity on the relationship between responsible leadership and sustainable outcomes (sustainable economic performance, sustainable social performance, and sustainable financial performance). Additionally, we investigate the moderating influence of knowledge-sharing culture on the link between responsible leadership and individual ambidexterity. Furthermore, we also investigated knowledge-sharing culture to moderate the mediation link. Data collected from employees in service sector organisations across two distinct studies (Study 1, n = 241; Study 2, n = 251), were analyzed using Smart PLS 4.0. Our findings substantiate that individual ambidexterity serves as a mediator in the relationship between responsible leadership and outcomes (sustainable economic performance, sustainable social performance, and sustainable financial performance). Further, the study demonstrates that knowledge-sharing culture amplifies the positive association between responsible leadership and individual ambidexterity. Furthermore, the study demonstrates that knowledge-sharing culture amplifies the mediation relationship as well. This study contributes to the existing knowledge on responsible leadership in the hospitality sector by proposing individual ambidexterity as a mechanism through which responsible leadership influences sustainable economic performance, sustainable social performance, and sustainable financial performance.

Firm strategy, employee retention and organizational performance: a moderated mediation study of New Zealand SMEs

PurposeAn effective firm strategy is key to sustained financial performance, while interactions between strategy, employee retention and top talent retention have been seldom explored. We test hypotheses using New Zealand SMEs which are defined as having up to 250 employees. We initially explore firm strategy using Porters competitive advantage model predicting employee retention (including top talent), with study 1 (n = 208) using firm size as a moderator, finding a direct significant relationship from firm strategy toward employee retention. Next, we explore firm strategy predicting firm performance with employee retention mediating and include firm size as a moderator, testing a moderated mediation model in study 2 (n = 474) and study 3 (n = 300, with time-lagged performance).Design/methodology/approachThere are no open databases holding NZ firms’ performance data and thus data was sourced from a Qualtrics survey panel. Such panels have become more common (e.g. Haar et al., 2021a, b) and a recent meta-analysis by Walter et al. (2019) showed that this type of panel data was no different from data sourced through conventional means (i.e. mail survey). We focused on NZ private sector SMEs using senior managers across a range of industries and geographic locations. Because the influence of firm strategy on employee retention remains unknown in the literature, we conducted study 1 (n = 208) to test the initial part of our overall model. Study 2 (n = 474) and study 3 (n = 300) tested the full model (with organizational performance), with study 3 having organizational performance time-lagged by one month.FindingsAll direct effect hypotheses are supported, although firm size interacted significantly with firm strategy showing smaller not larger-sized firms leverage firm strategy to achieve superior retention benefits. This was against hypothesis 5a in all three studies. Studies 2 and 3 supported the moderated mediation hypothesis, with firms of larger size having a stronger indirect effect from firm strategy on firm performance while employee retention mediated the influence of firm strategy on firm performance. Finally, dominance analysis found that a quality differentiation strategy was the key strategy across all studies and outcomes. We discuss the implications for organizations.Practical implicationsThe first managerial implication from the study is that small and medium sized firms would benefit both from developing a deeper understanding of the strategic alternatives open to them and placing a greater emphasis on the implementation of their selected strategic approach. A second managerial implication relates to findings indicating that retention generally, and top talent retention specifically, is positively related to firm strategy and firm performance. Given the importance and challenges of staff retention, particularly in the current environment where there are significant skill shortages, these results suggest that small and medium sized business would benefit from considering how strategy can create an organizational environment that is attractive to employees and support stronger retention outcomes as a mechanism for driving both retention and performance.Originality/valueThe study makes three major contributions. First, it examines firm strategy and extends the focus on firm performance by including not only employee retention but also top talent retention, responding in part to the call to develop and refine performance measures (Lieberman, 2021). Second, beyond using retention as a mediator, firm size is included as a moderator and a moderated mediation model is ultimately tested. Third, we conduct dominance analysis to identify the key firm strategy that influences firm performance and retention. Ultimately, this paper asks: what is the role of firm strategy on New Zealand SME performance, and what influence does retention and relative firm-size play.

Effect of Corporate Governance on Financial Performance in China

Purpose: The aim of the study was to assess the effect of corporate governance on financial performance in China. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study indicated a positive correlation between strong corporate governance practices and improved financial outcomes for companies. These practices typically include transparent decision-making processes, effective board oversight, and alignment of management incentives with long-term shareholder value. Study suggests that companies with robust corporate governance structures tend to experience higher profitability, better risk management, increased investor confidence, and enhanced access to capital. Additionally, strong corporate governance is associated with lower instances of financial misconduct and improved overall corporate reputation, which can further contribute to sustainable financial performance over time. Implications to Theory, Practice and Policy: Agency theory, stewardship theory and resource dependency theory may be used to anchor future studies on assessing the effect of corporate governance on financial performance in China. Implement best practices in corporate governance that align with empirical findings and theoretical insights to optimize financial performance. Advocate for regulatory frameworks and policies that incentivize effective corporate governance practices and align them with desired financial performance outcomes.

The effect of credit risk management on the financial performance of commercial banks: evidence from Tanzania

The vital role played by commercial banks in economic development calls for the stable and sustainable financial performance of banks for smooth financial intermediation. However, unhealthy credit has caused the collapse of many financial institutions all over the world. Therefore, this study examines how credit risk management practices affect the financial performance of commercial banks in Tanzania. While employing multiple linear regression techniques, the study analysed balanced panel data from 225 observations gathered from audited published annual reports of 15 commercial banks in Tanzania from 2006 to 2020. Credit risk approval and credit risk monitoring were used as proxies for credit risk management. The findings reveal that credit risk approval has a positive effect on banks’ capital adequacy, efficient utilisation of equity, asset quality, and liquidity. However, credit monitoring negatively affects the financial performance of banks through their earning ability, asset quality, and liquidity. The study recommends that incorporating credit risk management practices as a core aspect of bank operations is crucial, as it has a beneficial impact on financial performance. Nevertheless, it is advised to exercise caution and achieve a harmonious balance in the integration and concentration of all examined variables since credit approval could not exhibit a positive effect on banks’ earning ability. This has also been established on credit monitoring towards capital adequacy and efficient use of equity.

The Effect of Green Intellectual Capital and Financial Literacy on Sustainable Financial Performance of Tofu Factory SMEs in Karawang Regency

Sustainable financial performance is one of the main objectives of SMEs, but achieving optimal sustainable financial performance needs to be supported by the ability of resources owned by SMEs, both from the level of green intellectual capital and financial literacy. Hence, this research aims to determine the effect of green intellectual capital and financial literacy on sustainable financial performance. This research uses a quantitative descriptive method. Data is collected in the form of primary data through the distribution of questionnaires. The study population consisted of all Tofu Factory SMEs in Karawang Regency, as many as 105 SMEs, using a Purposive Sampling Strategy Criteria; thus, the final sample used was 90 respondents. Data processing techniques were carried out using PLS with SmartPLS 3.0 software through three data testing stages: the outer model, the inner model, and the hypothesis. The results found a positive and significant influence of green intellectual capital on the sustainable financial performance of Tofu Factory SMEs. Sustainable financial performance is also positively and significantly influenced by the financial literacy of Tofu Factory SMEs. Suggestions for further researchers are expected to add variables of green product innovation, creativity capital, and green financing, because those who examine these variables are still very limited; thus, they can create a more accurate model based on the actual conditions in SMEs.

The Role of Corporate Governance, Integrated Reporting and Financial Sustainability in Islamic Banking of Pakistan; A Conceptual Review

The current study indicates the importance of Islamic banking deposits as a paramount sector with its unique blend of moral principles and financial practices. Inside the situation of Islamic banking in Pakistan, where shared values and moral principles clasp considerable sway, integrated reporting shoulders heightened consequence in communicating the all-inclusive value created by these institutions to stakeholders. In this study corporate governance serves as the basis of effective management and oversight in Islamic banking institutions operating in Pakistan. Adherence to Sharia principles of clarity, fairness, and accountability not only confirms compliance but also fosters trust and confidence among stakeholders, thereby enhancing the strength of the sector. The financial sustainability, a core tenet of Islamic banking in Pakistan, continues beyond ordinary profitability to encompass social welfare and environmental stewardship. So the careful with risk management, reasonable wealth distribution, and investment in socially responsible projects, Islamic banks in Pakistan can achieve sustainable financial performance while upholding their ethical obligations. Ultimately, the convergence of combined reporting, corporate governance, and financial sustainability not only reinforces the resilience of Islamic banking in Pakistan but also strengthens its role as a driver of inclusive growth and ethical finance in the country's financial ecosystem.

Does climate change exposure impact on corporate finance and energy performance? Unraveling the moderating role of CEOs’ green experience

This study examines how firm-level exposure to climate change shapes sustainable financial and energy performance. We utilize a robust two-way fixed-effects approach to examine 2905 Chinese listed enterprises spanning 2010 to 2022. Our primary objective is to unravel the direct effects of climate change exposure (CCE) on corporate financial performance (CFP) and corporate energy performance (CEP), and to explore how CEOs' green experience moderates these effects. The findings delineate significant adverse effects on CFP and CEP stemming from CCE. Notably, augmenting CEOs’ green experience can help to mitigate these effects. We also emphasize the pivotal roles of green technology innovation (GTI) and the augmentation of environmental, social, and governance (ESG) performance as primary conduits through which CCE influences CFP and CEP. Our study illuminates nuanced variations in these influences that are based on climate risk type, geographical regions, firm scale, and industry. These insights offer fresh theoretical perspectives and robust evidence that are crucial for tackling climate-related challenges, especially in the context of emerging economies such as China. They also provide important implications for government actions, suggesting ways to refine environmental policy at the firm level.

Corporate Governance Mechanisms and Financial Performance: A Systematic Literature Review in Emerging Markets

This research investigates the relationship between corporate governance mechanisms and financial performance in emerging markets. Through a systematic literature review approach, researchers analyze various studies that have been conducted to understand the role of board of directors composition, institutional ownership, and financial reporting transparency in influencing company performance. The findings show that a diverse board of directors composition, strong institutional ownership, and financial reporting transparency have a significant impact on a company's financial performance. Apart from that, the relationship between corporate governance and financial performance is also supported by various theories such as agency theory, stewardship and collective action. This research provides a better understanding of the importance of effective governance practices in achieving sustainable financial performance in emerging markets.

A Review on Green Accounting Practices and Sustainable Financial Performance

Sustainability is a broad concept that refers to the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs. It comprises three dimensions: environmental, social, and economic sustainability. Sustainable development and practices take into account these dimensions with the goal of creating a better and more equitable world for present and future generations. The ability of a corporation to create long-term financial success while also taking into account and addressing ESG factors is referred to as sustainable financial performance. In this context, green accounting plays a major role. This study aims to provide an understanding of the importance of sustainability in business, green accounting, and the relationship between sustainability and financial performance. Some studies reveal that the relationship between sustainability practices and financial performance is confusing or contradictory, showing positive and occasionally negative outcomes. Even though in some cases it shows a negative relationship, every organisation must adopt sustainable practices, because, it helps the organizations gain a competitive advantage in the marketplace, attract a broader customer base, and adapt more readily to changing market dynamics. Sustainability is positioned as not merely a choice but a requirement for a better, more equitable future, and businesses are encouraged to navigate this intersection for the benefit of both society and the environment

Human Capital Accounting for Sustainable Performance of the Financial Sector Businesses in Nigeria

The study investigated on Human Capital Accounting for sustainable performance of the financial sector businesses in Nigeria for the period 2008 -2021. Human Capital Accounting was proxied by staff development cost and training while sustainable financial performance was proxied by return on assets and return on equity. The financial sector used were four banks whose financial statements were accessible online for the period of investigation. Secondary data was used and accessed from online publication of the four sampled banks. Model relation between staff and development cost, return on equity and return on asset was developed with the objective to determine the effect of staff and development cost on banks return on asset and return on equity. Data collected were analyzed with Ordinary Least Square regression model with analytical tool of E-view 10. Results showed that staff and development cost of banks has insignificant effect on their return on assets and return on equity. The research recommends that for banks to successfully address the challenges of sustainable performance, there must be a paradigm shift to improvement in human capital accounting for sustainable performance of the banking sector.

Analyzing Factors That Affect Korean B2B Companies’ Sustainable Performance

This study empirically examines factors that can influence the sustainable corporate performance of Korean business-to-business (B2B) companies with the help of unique survey data. Factors such as technological capability, the chief executive officer (CEO)’s risk-taking propensity, B2B seller skill, and key account management (KAM) are analyzed to clarify their impact on sustainable financial and non-financial performance. In particular, given that environment, society, and governance (ESG) reporting has recently been widely recognized as an important evaluation factor for companies, we look at the mediating effects of ESG management on sustainable business performance. The results show that the CEO’s risk-taking propensity and B2B seller skill significantly impact the company’s sustainable financial performance, while technological capability and the CEO’s risk-taking propensity significantly impact sustainable non-financial performance. The fact that a CEO’s risk-taking propensity affects both sustainable financial and non-financial performance indicates the importance of entrepreneurial competency in the sustainability of the company. Furthermore, the findings reveal that ESG management plays a crucial role in sustainable corporate performance. The mediating role of ESG management allows technological capability, B2B seller skill, and KAM to influence sustainable financial performance significantly. Likewise, all of the explanatory factors contribute to the company’s sustainable non-financial performance through ESG management. The findings are important for both practitioners and scholars because they emphasize the need to establish an optimal ESG management strategy for corporate survival and sustainability. Furthermore, this study underscores that ESG management should be implemented by all organizational members, from CEOs to employees. Future research will include more comprehensive samples and analyze various strategic factors not covered in this study to derive effective ways by which companies can increase their performance and sustainability. We will also explore the factors that contribute to good ESG management practices.

The CSR perspective: Interplay of technological innovation, ethical leadership and government regulations for sustainable financial performance.

The financial performance of Chinese public and private sector banks is changing over time. There is no stability in the financial performance of Chinese banks which hurts businesses and the market. The purpose of current research was to determine the influence of corporate social responsibility (CSR) on driving the sustainable financial performance of Chinese banks. From methodological perspective, data was collected from 329 banking sector employees from China to partial least square-structural equation model (PLS-SEM) is employed for data analysis. The research used SPSS 24 and Smart PLS 4 as statistical analysis tools. This research confirmed that achieving sustainability in financial performance for Chinese banks can be achieved with CSR influenced by technological innovation, ethical leadership, and government regulations. This research has statistically confirmed that transformational leadership leading to CSR with technological innovation, ethical leadership, and government regulations can make significant improvements in financial performance. The framework developed by current research is a novel contribution to the literature. The findings of this research improve the literature on the banking sector and advanced performance. Furthermore, this research has highlighted significant ways that can help the banking sector employees to improve their financial performance with sustainability.

Corporate Social Responsibility and Green Innovation Transform Corporate Green Strategy into Sustainable Firm Performance

This research examines the relationship between green technologies, CSR, GI, and sustainable financial performance (SFP) in small and medium-sized enterprises. Results showed that SFP1 was positively correlated with GS1, CSR1, and GI1, and the regression model was statistically significant. Higher levels of CSR and GI are associated with better SFP, suggesting the importance of integrating environmental and social considerations into business strategies. Future research should focus on longitudinal studies, comparative analysis, sector-specific studies, and mediating and moderating effects to explore the relationships between CSR, GI, and SFP in SMEs.

Pengaruh E-Commerce dan Kualitas Sumber Daya Manusia Terhadap Kinerja Keuangan UMKM

Currently, many MSMEs are struggling to develop even though they are the backbone of the Indonesian economy. On the other hand, improving the sustainable financial performance of MSMEs is believed to be one of the main keys for MSMEs to upgrade and survive. Therefore, this study aims to analyze the effect of e-commerce and human resource quality on the financial performance of MSMEs. This research was conducted on 38,343 MSME players registered in the SIMDAKOP UMKM application in Medan City in 2022. The research sample amounted to 100 people selected using simple random sampling technique. The type of data used is primary data. The data was collected using a questionnaire distributed to selected respondents. The research data were analyzed using multiple linear regression analysis method with SPSS 26 software. The results of the analysis show that e-commerce has a positive and significant effect on financial performance of MSMEs. HR quality also has a positive and significant effect on financial performance of MSMEs. E-commerce and HR quality simultaneously have a significant effect on the financial performance of MSMEs. The implication of this research is a guideline for MSMEs in making business strategy decisions to ensure sustainable financial performance of MSMEs, which will help MSMEs to upgrade and survive in competition.

Appointment of women to mining boards - Evidence of tokenism

Mining companies are required by law to improve representation of women on their boards. However, progress in this regard has been slow. Boards of directors play an important role in formulating corporate strategy, risk assessment, and effective governance for sustained financial performance. Although some women have successfully maintained board seats, others have been unable to do so. It is difficult to ascertain whether women are being appointed as tokens to satisfy social pressures, as little is known about the experiences of women board members in mining, which may inform or refute tokenism. In-depth interviews were conducted with 20 women and 16 men across six listed mining companies. Thematic data analysis revealed evidence of tokenism where recruitment to mining boards is compliance-based and is informally driven by influential directors. Adverse boardroom experiences that further confirmed tokenism were reported by women, such as disregarding their contributions, condescending behaviour, and limited influence in decision-making, while other women sought to validate their competence and oppose social exclusion. This study recommends that a strong Board Chair and nominations committee is critical to ensure sustainable recruitment of competent and suitably qualified women; and further foster a culture of inclusivity and valuing gender-diverse boards.

Do agency costs and business risk affect the corporate sustainability–financial performance relationship?

PurposeThe aim of this research is to examine the effect of corporate sustainability performance on financial performance and the role of agency costs and business risk in determining this effect.Design/methodology/approachThis study uses the data of 83 non-financial Turkish firms listed on Istanbul Stock Exchange during the period 2014–2021. Two-step system GMM models are applied to examine the study’s hypotheses.FindingsThe results indicate a positive effect of corporate sustainability performance on financial performance, and that this effect is significant only for firms that are more likely to suffer agency costs of equity, firms with R&D expenditures and firms with lower business risk.Practical implicationsThe results of this study confirm the importance of regulations introduced by regulators to support the sustainability initiatives for firms that have less ability to access funds required for their investments. In addition, the findings provide important insight into the role of the persistence of corporate sustainability performance in enhancing financial performance through mitigating managers' opportunistic behavior.Originality/valueTo the author’s knowledge, this research is one of few that examine the effect of agency costs and business risk on the corporate sustainability–financial performance relationship in emerging markets.