This study seeks to contribute to the extant business strategy and the environment literature by investigating the effect of CEO pay and executive compensation (EC) on sustainable business practice (SBPs). It also distinctively ascertains whether the payfor-sustainability sensitivity (PSS) is reinforced in firms with sustainability-based compensation (SBC) policy. Using a sample of 262 UK listed firms from 2009 to 2018, our findings are threefold. First, the findings reveal that both CEO pay and EC variables have positive effect on all SBP measures, except CO 2 reduction performance where the link is negative. Second, the study shows that the PSS is reinforced for firms that implement SBC policy. Finally, we detect that both the PSS and the moderation effect of SBC on the PSS are higher in the symbolic construct of SBPs than the actual measures. The results support insights drawn from neo-institutional theory. The findings have key implications for regulators and policy makers.

Purpose The purpose of this paper is to investigate the relationship between corporate social responsibility (CSR) and earnings quality, as proxied by accrual earnings management, in Egyptian firms. This research is conducted in a bidirectional fashion using simultaneous equations and considers two theoretical perspectives. Design/methodology/approach The study employs CSR annual scores from the Egyptian environmental, social and governance index (S&P/ESG index) for the 100 highest scoring firms from 2007 to 2015. It utilizes three earnings quality measures, in addition to considering reverse causality and endogeneity. Findings The results indicate that CSR has a positive association with earnings quality only in the top CSR scoring firms (top 30 ranked firms according to the index). Engaging in CSR in such firms enhances the quality of their earnings. This suggests that firms with relatively lower CSR scores (bottom 70 ranked firms according to the index) may use CSR to “greenwash” weaker earnings. Research limitations/implications The findings suggest that researchers, analysts and policy makers should consider earnings quality when estimating the real value of a firm’s CSR score. In particular, the Egyptian S&P/ESG index committee could further develop the index by incorporating earnings quality measures. Originality/value The study contributes to the literature by exploring in-depth the causal relationship between CSR practices and accrual earnings management in an emerging market. The results provide a nuanced story of CSR practices, with accruals earnings management (earnings quality) acting as a mediator of CSR’s inherent value.

We investigate the interrelationships among carbon performance, CEO Pay, executive compensation, financial performance and market value. Using data relating to non-financial firms from UK FTSE 350 from 2009 to 2018, our findings are fourfold.First, our results suggest that actual carbon performance is negatively associated with financial performance and market value of firms. Second, we document that selfreported carbon performance has no effect on financial performance. By contrast, we observe that self-reported carbon reduction initiatives performance has positive impact on market value. Third, our results suggest that CEO Pay, and executive compensation have positive moderating effect on the association between self-reported carbon performance and financial performance. In addition, we show that selfreported carbon performance-market value nexus is positively moderated by CEO Pay and executive compensation. Fourth, we observe that CEO Pay, and executive compensation have no moderating impact on actual carbon performance-market value nexus. Our findings demonstrate that while firms appear to employ compensation incentives to symbolically enhance their self-reported carbon performance, this does not result in actual carbon emission reduction. Our findings have key implications for policymakers.

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