A Global Investigation of Government and Community Stakeholder Influences on Large Company Engagement in Sustainability

Abstract

Business organizations are increasingly expected to address sustainability issues and to disclose socially responsible behaviors accurately and transparently, showing that they are effective at managing and being proactive about sustainability challenges. Stakeholder theory was used as a framework to investigate whether influence effects from two institutional stakeholder types were associated with the levels of strategic engagement in sustainability for large publicly listed firms in twenty five countries. Government and community institution effects were quantitatively evaluated as discrete stakeholders with influence on the level of sustainability engagement for firms. Generally, there was significant variation in the average level of company engagement in sustainability, depending on the country. Specific findings on the effects of stakeholder influence showed medium effect sizes and that there were significantly higher levels of strategic company engagement in sustainability when there was an optimal level of national government institutional power and in national communities with positive norms supporting sustainability and citizen-based political action.

Operationalizing Sustainable Development, Stakeholder Theory, Corporate Social Responsibility to Improve Community Engagement Outcomes

“…The study data indicated the lack of dialogue was an implicit barrier between business and both WSA and WSB relating to participation and adoption of the TBL. Citizen advocacy was a primary justification for the firm to use dialogue processes as a method to resolve conflicting TBL issues (Nemetz, 2015). Study data confirmed WSA and WSB used citizen advocacy to focus public attention on their agendas.…”

“…The value of this study to business is new insight for engaging communities by applying the TBL to CSR engagement strategies. Potential outcomes, confirming Nemetz's (2015) view, are: business may gain competitive advantage, enhance reputation, demonstrate responsible citizenship, and avoid coercive regulations. Also, this study should be of interest to executive directors of NGO's, especially those organizations that have strong environmental orientations.…”

“…The generally accepted role of business in society has been to research and produce useful products that improve quality of life while making a profit and earning the support of the community in which the business is engaged (FitzGerald & Cormack, 2006;Krishnan, 2011;Williams, 2014). However, the relationship between business and society has come under increasing scrutiny because of concern about the unrestrained growth of business' influence in the evolving global economy (Nemetz, 2015). Further, a lack of understanding has become more commonplace relating to the interdependency implicit in the relationship between the company and community stakeholders; often, the result is an inability to resolve conflicting views (Dunham, Freeman, & Liedtka, 2006;McLennan & Banks, 2019).…”

Venture Capital Firms’ Specialization, Differences and Complementarities

“…11, No. 7; instruments for enhancing the sustainability of the financial system with increasing focus on the risk and opportunities related to the environment, social and governance (ESG) matters (UNPRI, 2014;PwC & Waterman, 2014;Nemetz, 2015). The literature on corporate sustainability has emphasized the growing role of ESG risks involved in investment decisions which has resulted in subsequent growth in sustainability accounting frameworks in recent years (Brown et al, 2009).…”

Local Government's Resource Commitment to Environmental Sustainability: Capacity, Conservatism, and Contractual Dynamics

“…Service production and delivery once managed in-house, including environmental functions, are now often farmed out to private or nonprofit contractors (Bogason 1996; Brown and Potoski 2005). Even in the governments where the in-house direct provision remains the dominant paradigm, contracting or commissioning takes a very strong second place (Hefetz and Warner 2004, 2012; Nemetz 2015; Warner and Hebdon 2001). As a result, local residents commonly receive sustainability-related services from various vendors, including private companies, nonprofit organizations, and other jurisdictions’ public agencies (Krause et al 2019; Stokan and Deslatte 2019).…”