Do Companies in Different Industries Respond Differently to Stakeholders’ Pressures When Prioritising Environmental, Social and Governance Sustainability Performance?

Abstract

Good sustainability decisions depend on how companies respond to wide-ranging exposure to exogenous and endogenous pressures. The purpose of the article was to determine whether companies in different industries respond differently to stakeholders’ pressures when prioritising Environmental, Social and Governance sustainability performance (ESG-SP) activities. Data of six sectors, with a total of 75 companies was extracted from the CSRHub database, which is a rating agency that focuses on assessing ESG performance of companies. The ANOVA, pairwise comparative and multiple comparison Tukey HSD tests were applied to compare mean scores across the sectors. Overall industry scores show no evidence of ESG-SP differences across industries in the sectors examined. It was however revealed that three (3) out of twelve ESG ratings have significant differences namely: Community Development and Philanthropy; Human Rights and Supply Chain; as well as Compensation and Benefits. The study found that the type of industry does not have a significant role in determining the ESG rating of a company. Future studies can look at a longitudinal analysis to shed light on the pattern of sustainability practices across companies that are listed on the JSE.

Bibliometric analysis and systematic review of environmental, social, and governance disclosure papers: current topics and recommendations for future research

“…Studies in the corporate strategy cluster have considered ESG disclosure as a strategic approach integrated into a business strategy to improve corporate engagement with stakeholders [21,67] and corporate commitments toward the environment [2,63].…”

“…In the financial performance cluster, studies have mainly focused on analyzing the impact of ESG disclosure on corporate performance [17][18][19][20][21]. Some studies have focused only on developed countries [68,69] or emerging markets [5,42,60], whereas others have compared developed and developing countries [26,70].…”

“…Other studies investigated the determinants of the extent of ESG disclosure [13][14][15][16]. Most studies focus on the impact of ESG disclosure on financial performance [17][18][19][20][21].…”

Gender Diversity Impact on ESG Performance: Evidence from Indonesian and Malaysian Manufacturing Sector

“…The dependent variable of this study is the number of female board members and independence ownership [13]. The independent variable is ESG ratings consisting of environment, community, employee, and governance disclosure ratings [14,15]. The control variable used is profitability using the return on asset indicator; and solvency using indicators of debt on equity ratio [16,17].…”

Do Investors’ Reactions to Environmentally Friendly News Announcements Differ Across Industries? A Comparative Analysis of Japan’s Food and Automotive Industries

“…These findings prompt the question of whether investors' reactions to environmental activities truly differ by industry. While some studies have reported significant correlations between social activities and business performance, the results are inconclusive regarding the impact of specific industries (e.g., Matakanye et al, 2021;Tamimi & Sebastianelli, 2017;Tuppura et al, 2016;Yoon et al, 2018).…”