Sustainability Financial Performance Research Articles

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.

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.

Coopetition and Non-Profit Performance in War-Torn Region: Role of Outside Knowledge and Innovative Climate

The inconsistent findings on the association between non-profit coopetition and performance are complicated and contingent on essential factors. However, our current understanding of the circumstances under which non-profit coopetition matters to performance is limited. We take a novel context to address this question and build on the combined literature from the emerging non-profit coopetition literature. This study conceptualises and tests the impact of coopetition (simultaneous cooperation and competition) on the organisational performance of non-profit organisations in a war-torn region. Notably, it investigates the simultaneous cooperation and competition in non-profits' social and financial performance via outside knowledge and innovative climate. An in-person survey with 158 executives and board members was conducted in Baghdad Governorate, Iraq. The survey adopted reliable and valid scales to measure the variables. Structural equation modelling was applied to test the mediation model. The proposed sequential mediating model has a good model fit with all four hypotheses statistically significant. Non-profit engagement in coopetition positively affects organisation performance via mediators: use of outside knowledge and innovative climate. Cooperation with competitors helps non-profits to effectively use the outside knowledge that forms an innovative climate at the organisational level. Additionally, the use of outside knowledge has a direct effect on performance. Non-profits should integrate outside and internal knowledge to generate sustainable financial and social performance opportunities, especially in turbulent or war-torn regions. Moreover, context is imperative for non-profit leaders to identify themselves and seek inter-organisational relationships. The study also provides theoretical and practical implications that help non-profit leaders innovate and increase organisational performance.

Adapting Corporate Governance for Sustainable Organizational Performance: A Case Study of the Banking Sector in Pakistan amid the COVID-19 Pandemic

Purpose - Corporate governance is a crucial aspect of creating a corporate culture that emphasizes transparency, fairness, and openness. The COVID-19 pandemic has caused a global financial crisis, which has increased attention to corporate governance issues. In light of this, the objective of this study is to examine the impact of corporate governance on the sustainable organizational performance of the banking sector in Pakistan particularly in the context of COVID-19.
 Study Design/Methodology/Approach - This research analyses the annual reports of sample banks and uses secondary data from 2016 to 2022; therefore, there is no doubt about the reliability and validity of the data. This study measured firm sustainable financial performance based on accounting data, using return on assets, return on equity, and earnings per share. The suggested model was investigated by the generalized method of moments through the Arellano-Bond Dynamic Panel-Data estimator.
 Findings - The overall findings of the study reveal that corporate governance components such as board size, audit committee independence, number of board meetings, and chief executive officer duality have a significant impact on organizational performance. Furthermore, the Fixed Affect model indicates that CEO duality has no discernible effect on organizational sustainable performance, while board size, audit committee independence, and the frequency of board meetings all positively affect it.
 Practical and theoretical implications- This study has implications for all stakeholders of the banking system, economic policymakers, and academicians by highlighting the importance of components of corporate governance that enhance overall organizational performance. Theoretically, compliance with corporate governance regulations should lower agency costs, which will improve the overall business's performance now and in the future.
 Originality/Novelty- This study indicates that the use of corporate governance practices enhances and improves the overall sustainable performance of the banking sector. This study adds value to the existing body of literature by considering corporate governance and its association with organizational performance, particularly from the COVID-19 perspective.

The Effect of Corporate Social Responsibility on Firm Value with Tax Avoidance and Sustainable Financial Performance as Mediators

Research confirms the influence of corporate social responsibility on firm value through tax avoidance and sustainable financial performance. Corporate social responsibility is measured based on the ESG disclosure score. In contrast, firm value is measured using Tobin's Q. Tax avoidance is measured using the effective tax rate, and sustainable financial performance is measured using return on assets. The samples analyzed in this research were 93 public companies listed on the IDX from all sectors. This research uses a purposive sampling method to produce reports on 93 companies in 5 years of company financial reports in 2017-2021. Data analysis used the Partial Least Square SEM technique. The analysis results show that corporate social responsibility has a significant direct effect on firm value, while the mediating role of tax avoidance and sustainable financial performance is not proven. In this research, it can be seen that corporate social responsibility (CSR) has a direct influence on firm value. This shows that stakeholders rely on CSR as a positive image of the company, as in several previous research results, it can describe the value of the company, which has an impact on investors' decisions to invest but indirectly does not influence tax avoidance and sustainable financial performance. The results of this research can provide an additional understanding of the previous theoretical concept that CSR can directly influence firm value. The strategic implications, of course, depend on company decision-makers in communicating CSR activities in their reports when they want investors' attention to the firm value.

Does corporate social responsibility influence performance persistence? A signal extraction approach with evidence from Fortune 500 companies

The study seeks to enhance the current understanding of how corporate social responsibility (CSR) and environmental, social, and governance (ESG) factors influence firm performance. We establish a theoretical framework and provide empirical data on the influence of CSR/ESG on the sustained financial performance of publicly traded Fortune 500 companies between 2018 and 2021. Our model explains the way CSR/ESG activities affect a firm's ongoing financial success by revealing valuable signals to stakeholders. We employed quantile regression analysis to assess the connection, and found that a firm's CSR/ESG initiatives have both immediate and lasting long-term effects. Our findings contribute to and expand the literature on firm performance and sustainable competitive advantage. Companies adopting CSR/ESG can enhance a firm's performance and attain a sustainable competitive advantage.

Analyzing how government spending, incentives, and supply chains affect financial performance in energy poverty alleviation.

Poor access to modern energy services, or energy poverty, continues to be a significant barrier to socioeconomic progress and well-being. The complicated connections between public investment, incentives, supplier chains, and the financial success of energy poverty alleviation efforts are explored in this paper. This research examines the history of eradicating energy poverty worldwide, particularly in China. It examines how these aspects affect the efficiency and long-term viability of reducing energy poverty initiatives. This research synthesizes the evidence on government expenditure patterns and their impact on initiatives to reduce energy poverty via an extensive literature examination. The development of infrastructure, capacity building, and the deployment of energy technology are all made possible in large part by government spending. Financial and regulatory incentives have also been shown to encourage the energy industry's private sector engagement and innovation. These incentives help expand underprivileged groups' access to electricity by creating an atmosphere conducive to investment. This research also examines supply chains' crucial role in combating energy poverty. For the effective installation and upkeep of energy projects, efficient and resilient supply chains are crucial because they guarantee the availability of vital materials and resources. An integrated supply chain strategy may improve project results, save costs, and eliminate risks related to logistical difficulties. Government funding, incentives, and supply chains all have a connection that affects how well energy poverty alleviation programs function financially. Maintaining projects after their first execution requires sustained financial performance. It explores how supply network interruptions may affect financial performance, highlighting the need for robust supply chain management techniques. As a result, this study adds to a comprehensive knowledge of the complex processes underpinning the reduction of energy poverty. It offers insights into developing efficient policies and strategies by examining how government actions, incentives, supply chains, and financial performance interact. These observations are relevant for practitioners, investors, and academics trying to increase access to sustainable energy sources and reduce poverty in addition to policymakers. This report provides helpful recommendations for boosting the effectiveness and endurance of energy poverty reduction activities as nations work to reach global sustainable development objectives.

Corporate Governance Strategy and its Role in Improving the Sustainable Financial Performance of Iraqi Banks

This study aims to demonstrate the role of corporate governance strategy and its effectiveness in improving sustainable financial performance in Iraqi banks. Traditional indicators are ineffective as they rely solely on the financial perspective. These indicators fail to consider current and future values and aspects such as quality, innovation, development, and sustainability, which directly impact customer satisfaction within the economic unit's environment. Furthermore, the absence of a sustainable strategic dimension and the lack of knowledge regarding achieving objectives pose challenges. The study sample consists of the four most active commercial national banks listed on the Iraq Stock Exchange. A total of 80 questionnaires were utilized, based on the absolute balances and income statements spanning from 2018 to 2021. Various statistical methods, including the use of the SPSS program, were employed to analyze the data and examine the relationship and impact between the research variables. The research yielded several conclusions, with the most significant being a positive and strong correlation between corporate governance and its principles, as evidenced by the results of the statistical analysis. Additionally, there was a correlation between sustainable financial performance and its indicators within the sample banks studied.

Impact of ESG Activities on the Innovation Development and Financial Performance of Firms

In the technology-driven economy, a firm’s sustainable financial performance is significantly influenced by its efficiency in research and development (R&D) and broader innovation initiatives. Conversely, while embracing ESG-related activities can potentially open up a broader spectrum of funding, it may also impose challenges on companies as they strive to meet the escalating demands for sus tainability practices and contend with increasing ESG-related risks. Hence, businesses are confronted with the imperative of making prudent ESG-related investments while simultaneously maintaining a strong track record in innovation performance. The findings of numerous studies suggest that investments in ESG projects can yield both positive and negative outcomes for innovation performance. However, recent trends within the ESG industry have amplified concerns regarding the trade-offs between ESG considerations, innovation endeavors, and overall financial performance.

The Impact of Environmental, Social and Governance, Sustainable Financial Performance, Ownership Structure, and Composition of Company Directors on Tax Avoidance: Evidence from Indonesia

The aim of the present study is to empirically estimate the impact of ESG, composition of company directors, ownership structure and financial performance on tax avoidance. To achieve the study objectives, 114 companies listed on Indonesian Stock Exchange market are selected covering the data span over 2013-2020 period. Institutional ownership, female directors, ESG performance, return on assets and firm size are taken as the measures of ownership structure, composition of company directors, ESG and financial performance respectively. Empirical analysis is carried out using Fixed Effects Model as it is found as the appropriate estimation technique in Hausman test and Breusch-Pagan test. According to the study findings, EGS, ownership structure, composition of company directors all have significant and negative impact on tax avoidance. Among financial performance indicators, only firm size has negative and significant impact while return on assets has no significant effect on tax avoidance. The study recommends the firms or businesses to pay attention to ESG factors, institutional ownership and female directorship as these factors are found to have prominent role in improving tax avoidance behavior.

The Association Between Facility Affiliations and Revenue Generation in Skilled Nursing Facilities - An Exploratory Study.

Although hospitals have been the traditional setting for interventional and rehabilitative care, skilled nursing facilities (SNFs) can offer a high-quality and less costly alternative than hospitals. Unfortunately, the financial health of SNFs is often a matter of concern. To partially address these issues, SNF leaders have increased engagement in a number of affiliations to assist in improving quality and reducing operational costs, including Accountable Care Organizations (ACOs), Health Information Exchanges (HIEs), and participation in Bundled Payment for Care Improvement (BPCI) programs. What is not well understood is what impact these affiliations have on the financial viability of the host organizations. Given these factors, this study aims to identify what association, if any, exists between SNF affiliations and revenue generation. Data from calendar year 2022 for n=13,447 SNFs in the US were assessed using multivariate regression analysis. We evaluated two separate dependent measures of revenue generation capacity: net patient revenue per bed and net patient revenue per discharge and considered three unique facility affiliations including (1) ACOs, (2) HIEs, and (3) BPCI participants. Six multivariable linear regressions revealed that ACO affiliation is negatively associated with revenue generation on both dependent measures, while HIE affiliation and BPCI participation reflected mixed results. A better understanding of the financial impact of SNFs' affiliations may prove insightful. By carefully considering the value of each affiliation, and how each is applicable to any given market, policymakers, funding agencies, and facility leaders may be able to better position SNFs for more sustainable financial performance in a challenging economic environment.

Is short-term firm performance an indicator of a sustainable financial performance? Empirical evidence

PurposeThis study aims to thoroughly examine and understand the relationship between working capital management (WCM) and the sustainable financial performance (FP) in the context of the New Zealand companies listed on stock exchange.Design/methodology/approachThis study has applied various regression techniques to examine WCM and the sustainable FP relationship. The data set period is from 2009 to 2019. The results are robust upon various layers of robustness parameters. The system-generalized method of moments is applied for managing endogeneity issue.FindingsThe research reveals compelling evidence of a meaningful connection between WCM and sustainable FP indicators. The study specifically highlights the significant negative associations between the cash conversion cycle, average collection period and average age of inventory with the firm’s sustainable FP. Through robust analyses and various parameter adjustments, the study ensures the credibility and reliability of its conclusions, further reinforcing the impact of WCM on the financial health of New Zealand-listed firms.Practical implicationsThis study provides future directions for researchers to explore the dynamic relationship between WCM and a firm sustainable FP because it is still a demanding and challenging area. Future research may care to explore the optimal way to reduce the cash conversion cycle, average collection period and average age of inventory for New Zealand firms. The current study does provide insights to NZ financial managers, which is useful for improving sustainable FP by efficiently managing WCM.Originality/valueWCM is problematic and constitutes a notable challenge; it requires further research, especially in small economies such as New Zealand. Hence, it is an updated and fresh attempt based on a larger data set to measure the empirical relationship between WCM and the sustainable performance of New Zealand-listed firms. Furthermore, the current study uses dynamic panel data estimation techniques in addition to multiple regression techniques.

Exploring sustainability management control system and eco-innovation matter sustainable financial performance: The role of supply chain management and digital adaptability in indonesian context

This research delves into the intricate dynamics of sustainable financial performance, driven by the interplay between Sustainable Management Control Systems (SMCS) and Eco-Innovation. Additionally, it evaluates the pivotal mediating roles of Supply Chain Management (SCM) and Digital Adaptability within this relationship, specifically within the context of Indonesian companies. Employing a survey methodology via carefully designed questionnaires, responses were collected from managerial representatives of the companies. The results underscore the significance of most hypotheses, revealing a notable influence of SMCS and eco-innovation on sustainable financial performance. However, some hypotheses regarding the mediating role of SCM and digital adaptability exhibit mixed outcomes. These findings emphasize the essential roles of SCM and digital adaptability in amplifying the effects of SMCS and eco-innovation on sustainable financial performance. Nevertheless, the intricate interdependencies suggest the presence of other influential factors affecting the relationship between digital adaptability and sustainable financial performance, warranting further exploration. The study's limitations include its focus on Indonesian organizations, reliance on self-reported data with response bias potential, cross-sectional design lacking causality establishment, and unexplored alternative mediating variables. This study enriches managerial decision-making and contributes valuable insights to sustainability management, especially in Indonesia, opening new avenues for academic research and inquiry.