Corporate sustainability and financial performance: Collective reputation as moderator of the relationship between environmental performance and firm market value

2020 ◽  
Author(s):  
Seonghoon Kim ◽  
Ann Terlaak ◽  
Matthew Potoski
Keyword(s):  
Financial Performance ◽  
Environmental Performance ◽  
Corporate Sustainability ◽  
Market Value ◽  
Collective Reputation ◽  
The Relationship

The moderating effects of environmental risk of the industry on the relationship between corporate environmental and financial performance

2016 ◽  
Vol 17 (1) ◽  
pp. 97-114 ◽  
Author(s):  
Natalia Semenova ◽  
Lars G. Hassel
Keyword(s):  
Financial Performance ◽  
Environmental Impacts ◽  
Environmental Risk ◽  
Environmental Performance ◽  
Energy Use ◽  
Operating Performance ◽  
Market Value ◽  
Moderating Effects ◽  
Content Type ◽  
The Relationship

Purpose – Industries differ in their environmental impacts, such as emissions, water and energy use, fuel consumption and hazardous wastes, which will have implications for how environmental performance translates to operating performance and market value at company level. By incorporating industry-specific differences of environmental impacts, this paper includes industry-level environmental risk as a moderating factor on the relationship between two indicators of corporate environmental performance (CEP) (management and policy) and corporate financial performance (profitability and market value). The paper aims to discuss these issues. Design/methodology/approach – Using panel data of US companies across all industries, the paper empirically tests a regression model, which includes an interaction effect representing both the form and strength of dependency of CEP on the environmental risk of the industry. The paper adopts the natural resource based theory to argue that financial returns are a decreasing function of CEP in high environmental impact industries, where environmental spending beyond compliance is costly and there is not much opportunity for consumer orientation. Findings – The results show that environmental management has different impacts on operating performance at high and low environmental risk of the industry (form of relationship) while environmental policy (reporting) has a stronger signal on market premium in industries with low rather than high environmental risk (strength of relationship). Differences in both form and strength of moderating effects are demonstrated. Research limitations/implications – Further research can introduce other industry-specific moderating factors, such as the disclosure maturity of the industry and the institutionalization of environmental disclosures across boarders in the industries, in order to explore the complexity of the relationship. Practical implications – The results of the paper are relevant to investors, company managers and a broad group of stakeholders when considering both industry- and company-level environmental risks. Originality/value – Previous studies have relied on controlling for industry membership. This paper uses an industry-specific environmental variable, environmental risk of the industry, to examine the form and strength of moderating effects.

scholarly journals Empirical Analysis of Corporate Sustainability Performance: Linkage of Japanese Firms' Environmental and Economic Performance

2017 ◽  
Vol 3 (2) ◽  
Author(s):  
K. Gnanaweera ◽  
N. Kunori
Keyword(s):  
Financial Performance ◽  
Observational Data ◽  
Firm Size ◽  
Environmental Performance ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Japanese Firms ◽  
Tokyo Stock Exchange ◽  
The Impact ◽  
The Relationship

The linkage between Corporate Environmental Performance (CEP) and Corporate Financial Performance (CFP) has been a long-standing debate since all previous efforts achieved inconsistent results. The current study therefore attempts to present the relationship between corporations’ environmental and financial performance to explore the notion of Corporate Social Responsibility (CSR) in a developed nation. This case derives empirical observational data from corporate sustainability reports and integrated annual reports of Japanese firms. The sample is comprised of observational data of a total of 85 Japanese corporations from 2008 to 2014. The selected firms are listed on the Tokyo Stock Exchange in the first section of the market division and are categorized under various industrial sectors. The effort of the current study has revealed that corporate environmental measurements have different effects on financial performance. The evidence was less strong in evaluating the impact level of all variables except firm size (total assets). Three hypotheses (H1, H2, and H3) were developed for further evaluation of the effect of financial indicators on environmental performance. H1 was accepted since environmental performance has a significant impact on firm size. However, the rejected H2 and H3 state that environmental performance has no significant impact on financial leverage and profitability, due to the weak relationship or insignificant outcome, i.e. in the profitability measurement, only Return on Sales (ROS) showed positive correlation between particular CEP variables, but the coefficient of determination (R2 value) does not support the ROS contribution for every model in the study. The other two profitability ratios (return on assets and return on equity) have less contribution. Both the relationship between environmental performance and financial performance according to R2 values and the relationship between CEP and CFP are broad spectrums that yet to be explored.KeywordsCorporate, Environmental, Financial, Sustainability, Tokyo Stock Exchange

scholarly journals The Relation between Sustainable Innovation Strategy and Financial Performance Mediated By Environmental Performance

2015 ◽  
Vol 9 (2) ◽  
pp. 146
Author(s):  
Hariyati Hariyati ◽  
Bambang Tjahjadi
Keyword(s):  
Financial Performance ◽  
Environmental Performance ◽  
Quantitative Research ◽  
Innovation Strategy ◽  
Business Unit ◽  
Unit Of Analysis ◽  
Sustainable Innovation ◽  
Manufacturing Company ◽  
Relationship Of ◽  
The Relationship

This study aims to examine the relationship of sustainable innovation strategy and financial performance through the mediation environmental performance. The hypothesis in this study is sustainable innovation strategy affect the financial performance which is mediated by environmental performance. This study is quantitative research in the explanatory level. The population of this study is all the manufacturer companies in East Java. The data is collected through questionnaire. The unit of analysis is a business unit. The respondent of this study is the manager of a business unit manufacturing company in East Java. The results showed that the environmental performance mediates partially the relation between sustainable innovation strategy and financial performance.<br /><br />

Sustainability and financial performance relationship: international evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ilker Yilmaz
Keyword(s):  
Financial Performance ◽  
Emerging Economies ◽  
Corporate Sustainability ◽  
Joint Effect ◽  
Business Practices ◽  
Content Type ◽  
Firm Financial Performance ◽  
International Evidence ◽  
The Relationship ◽  
Practical Implications

PurposeThe purpose of the article is to examine the relationship of corporate sustainability to firm financial performance by presenting international data.Design/methodology/approachThe sample includes non-financial companies from five emerging economies known as BRICS for a five-year period of 2014–2018. The study uses the ESG (environmental, social, governance) scores from Sustainalytics database and financial data from company reports. Panel regression models are developed to figure out the relationship.FindingsThe results of the article revealed that there is a positively significant relationship between sustainability performance and financial performance. Total ESG score has produced significant results while the individual scores of environmental, social, and governance have produced insignificant results; implying that the components of total ESG score have a joint effect on the financial performance.Practical implicationsThe results of the article have important practical implications for companies. Engagement in sustainable business practices will help improve the financial performance. In addition, the companies should be active in all components of sustainability.Originality/valueThe article contributed empirical evidence for sustainability-financial performance relationship by using the international evidence from five emerging economies.

scholarly journals The Study on the Relationship between the Environmental and Financial Performances of Corporates Which Have Adopting the System of Environmental Accounting in Taiwan

2019 ◽  
Vol 81 ◽  
pp. 01012
Author(s):  
Wei-Lun Huang ◽  
Yan-Kai Fu
Keyword(s):  
Social Responsibility ◽  
Financial Performance ◽  
Environmental Performance ◽  
Positive Relationship ◽  
Environmental Policies ◽  
Environmental Accounting ◽  
Accounting System ◽  
Review Of Literature ◽  
The Social ◽  
The Relationship

The purpose of this paper is to study the relationship between the environmental and financial performance of Corporates. For the environmental awareness of people, the social responsibility of companies and the environmental policies and laws of government, more and more companies would adopt the system of environmental accounting, and then they would disclosure their environmental performances. From the review of literature and the statistics results on the financial and environmental performances of listed companies which had adopted the environmental accounting system in Taiwan, the results are: 1.the adopting on the system of environmental accounting might make the corporations’ financial performances worse, but not significantly make corporations’ environmental performances better. 2. There should be a positive relationship between the environmental performance and financial performance of companies.

scholarly journals Does Technological Innovation Drive Corporate Sustainability? Empirical Evidence for the European Financial Industry in Catching-Up and Central and Eastern Europe Countries

2020 ◽  
Vol 12 (6) ◽  
pp. 2261 ◽  
Author(s):  
Francisca Sempere-Ripoll ◽  
Sofia Estelles-Miguel ◽  
Ronald Rojas-Alvarado ◽  
Jose-Luis Hervas-Oliver
Keyword(s):  
Financial Performance ◽  
Eastern Europe ◽  
Technological Innovation ◽  
Central And Eastern Europe ◽  
Corporate Sustainability ◽  
Financial Industry ◽  
Critical Question ◽  
Community Innovation Survey ◽  
Catching Up ◽  
The Relationship

In the financial industry, two relationships are well-researched: (i) innovation and financial performance and, (ii) sustainability and financial performance, both focused primarily on Western and advanced countries. The relationship between innovation and sustainability, however, is underresearched. This study’s purpose consists of determining whether there is a relationship between innovation and corporate sustainability in the financial industry. In doing so, this study responds to a critical question: are the most innovative firms also the most sustainability-oriented? We empirically explore sustainability-oriented innovation in the financial industry of 11 catching-up countries in Central and Eastern Europe (CEE). Using Community Innovation Survey (CIS) data for 2012–2014, this study empirically analyzes a large sample of 1574 firms in the financial industry. Our results suggest that innovation is positively linked to corporate sustainability, pointing out that innovation capabilities are positively related to sustainability. Our study proposes a framework for analyzing innovation and sustainability from a capability-perspective.

Financially Qualified Audit Committee Member and Corporate Sustainability: Evidence from Emerging Economy

2018 ◽  
Author(s):  
Ashfaque Banbhan ◽  
Xinsheng Cheng ◽  
Nizam Ud Din
Keyword(s):  
Financial Performance ◽  
Audit Committee ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Committee Member ◽  
Positive Relation ◽  
Accrual Quality ◽  
The Impact ◽  
The Relationship

This paper examines the relationship between financial qualification of the audit committee (AC) chairman on corporate sustainability (CS) in developing the economy of Pakistan, which has a weak corporate environment. In a sample of companies listed on Pakistan Stock exchange (PSX) during 2010-2014. Empirical results of 1020 firm-year observations indicate that the presence of financially qualified AC chairman has a positive relationship with firm&rsquo;s accrual quality. The results found that accounting qualification of AC chairman has significant positive relation with CS performance. Furthermore, the study found that powerful CEO is also not able to influence CS in the presence of accounting qualified AC chairman, but this result is not present if AC chairman is non-accounting qualified. This study extends the literature on the impact of accounting qualification of AC members and CS and offers some significant understanding into efficient corporate practices to achieve sustainability goals. This study suggests the presence of accounting qualified member in AC which results in effective monitoring for the increased financial performance of the organization.

scholarly journals PERAN DEWAN WANITA PADA PENGUNGKAPAN ANTI PENYUAPAN DAN KINERJA KEUANGAN DI PERUSAHAAN SEKTOR PERTAMBANGAN DI BEI

2021 ◽  
Vol 8 (1) ◽  
pp. 45
Author(s):  
Yani Zulvina
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Quantitative Research ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Mining Sector ◽  
Analysis Techniques ◽  
Observation Units ◽  
The Relationship

<p><em>This study aimed to examine the effect of Anti-Bribery Disclosure on Financial Performance and</em><em> also</em><em> to examine the role of the Women </em><em>Board</em><em> on Anti-Bribery Disclosure and Financial Performance where the Women</em><em> Board</em><em> </em><em>i</em><em>s a moderating variable. This research </em><em>was</em><em> a quantitative research using 101 observation units from Mining Sector Companies listed on the Indonesia Stock Exchange during 2017-2019. This study use</em><em>d </em><em>regression analysis techniques that </em><em>were</em><em> processed using the STATA </em><em>version 14 </em><em>application. The results showed that the Anti-Bribery Disclosure had no significant effect on financial performance as measured by ROA. The results also show</em><em>ed</em><em> that the Women</em><em> Board </em><em>does not significantly moderate the relationship between Anti-Bribery Disclosure and Financial Performance. This research contributes to an increase in the assessment of company management that focuses on the gender of the company board and its role in achieving integrity and transparency of corporate activities in order to improve corporate sustainability.</em><em></em></p>

A Knowledge Management Framework to Manage Intellectual Capital for Corporate Sustainability

2010 ◽  
pp. 119-135 ◽  
Author(s):  
Herbert Robinson
Keyword(s):  
Knowledge Management ◽  
Intellectual Capital ◽  
Corporate Sustainability ◽  
Market Value ◽  
Organisational Change ◽  
Management Framework ◽  
Business Transformation ◽  
Geographically Dispersed ◽  
Catalytic Role ◽  
The Relationship

The significant development in knowledge management (KM) literature in recent years is a reflection of the growing interest to academics and practitioners/consultants involved in organisational change and business transformation. Knowledge is a major source of competitive advantage and knowledge assets/intellectual capital has to be managed effectively. The importance of implementing a knowledge management strategy to understand the relationship between physical and intellectual capital, to increase the market value of organisations and achieve corporate sustainability is examined. Using case studies of construction organisations and applying the STEPS knowledge management framework, it was found that there is a greater need for multinational organisations to implement KM. This is because they have knowledge that is diverse and geographically dispersed across a network of organisations. It is concluded that knowledge management has a catalytic role in developing intellectual capital to achieve corporate sustainability. The STEPS framework will enable multinational organisations to identify the reform, resource implications and the results of KM activities.

Sign in / Sign up

Export Citation Format

Share Document