Does stakeholder engagement encourage environmental reporting? The mediating role of firm performance

Pucheta‐Martínez, María Consuelo; Bel‐Oms, Inmaculada; Rodrigues, Lúcia Lima

doi:10.1002/bse.2555

Cited by 16 publications

(12 citation statements)

References 58 publications

(76 reference statements)

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“…Good management theory suggests that certain altruistic behaviors such as social and environmental responsiveness are positively associated with productivity—in other words, firms “do well by doing good” (Waddock & Graves, 1997 ). Previous research that contributes to the stakeholder theory shows that environmental commitments are instrumental to stakeholder management (e.g., Buysse & Verbeke, 2003 ; Pucheta-Martínez et al, 2020 ). Moreover, addressing sustainable development through corporate policies is increasingly important (Lee & Kim, 2021 ) due to the positive link between social and environmental indicators at a business level and the corresponding indicators at a macro level (Malay, 2021 ).…”

Section: Corporate Sustainable Development Indicators: Hypothesesmentioning

confidence: 99%

Disentangling the Bidirectional Relationships Across the Corporate Sustainable Development Indicators

2022

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This study disentangles the relationships that exist between the four indicators of corporate sustainable development: economic, environmental, social, and governance. We account for the potential bidirectionality of the relationships, control for the dynamic nature of the sustainability process, and address the endogeneity problem to appropriately analyze the sustainability process. We estimated a panel data from 734 U.S. companies from 2004 through 2016 by using the system generalized method of moments and find evidence of a clear dynamic nature of the businesses’ sustainability process. The results show that the current levels of the four sustainable development indicators are strongly determined by the levels of these indicators in the two previous years. Our results also show that corporate sustainable development follows a virtuous circle. The relationships across the economic, environmental, and social indicators are bidirectional and positive. Hence, these three sustainability indicators do not compete for available resources. On the contrary, they are tightly interconnected in a firm’s sustainable development processes. Therefore, practitioners and regulators should consider these indicators simultaneously to promote sustainability in businesses and apply long-term sustainability policies. Altogether, our evidence supports the idea that firms can do good by doing well, and they do well by doing good.

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Section: Corporate Sustainable Development Indicators: Hypothesesmentioning

confidence: 99%

Disentangling the Bidirectional Relationships Across the Corporate Sustainable Development Indicators

2022

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“…The strength of the BOD, as measured by a range of characteristics of the board or the members, is shown as an important fact that explains CSR (Reimer et al , 2018), social (Slater and Dixon-Fowler, 2009) and social and environmental (Shaukat et al , 2016) commitment and performance. To the extent that it is responsible for setting the values and standards within the firms (Pucheta-Martínez et al , 2020), the BOD is regarded as an important internal driver that influences CSP.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Product market competition, board gender diversity and corporate sustainability performance: international evidence

Kamarudin

Ariff

Ismail

2021

JFRA

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Purpose This study aims to investigate whether board gender diversity is associated with corporate sustainability performance and whether industry-level product market competition moderates the effect of board gender diversity on corporate sustainability performance. Design/methodology/approach This study uses international data extracted from global ESG data set from Thomson Reuters (Refinitiv) database. Using data of 23,137 firm-year observations from 37 countries, the authors perform regression analyses to examine the hypotheses. Findings The findings show that firms with high board gender diversity exhibit high corporate sustainability performance. The authors also find firms in highly competitive industries to have low corporate sustainability performance. In highly competitive industries, the positive relationship between board gender diversity and corporate sustainability performance is weakened. The results are robust to various specification tests such as alternative measures for corporate sustainability performance, board gender diversity, product market competition and also the use of propensity score matching to address endogeneity issue. Overall, the results support the prediction that board diversity and product market competition play a substitutive role in influencing corporate sustainability performance. Research limitations/implications This study offers empirical evidence that the appointment of female directors is a useful way to improve a firm’s corporate sustainability performance, hence, providing significant benefits in terms of stakeholders’ values and corporate reputation. Practical implications This study provides useful insights to investors and policymakers that intense industry competition might mitigate the role of board governance, particularly board gender diversity, in enhancing corporate sustainability performance. Originality/value Using an international data set, where the observations operate in various market and institutional differences, this study is able to extricate the positive impact of board gender diversity and product market competition on corporate sustainability performance. This study corroborates evidence that sustainability strategy and initiatives are reflections of integrated factors, including corporate governance as internal driver and market forces faced by firms as external driver.

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“…This index allowed us to measure the level of the environmental disclosure in a firm's reports through the use of a dummy variable, in which a given indicator is set to one if a specific item is released, and zero if the item is not reported. This technique was widely used in prior studies, namely by Clarkson et al (2008), Huang and Kung (2010), Monteiro et al (2010), Rao et al (2012), andPucheta-Martínez et al (2020).…”

Section: Measures Of Environmental Information Disclosurementioning

confidence: 99%

“…Although there is not much information about environmental information disclosure in Portugal, the existing research is focused on: social responsibility disclosure on the Internet of the Portuguese listed firms (Branco and Rodrigues, 2005); Portuguese firms that adopt GRI guidelines (Roberts and Koeplin, 2007); analysis of sustainability reporting (SR) and assurance in Portugal (Gomes et al, 2015). In the environmental disclosure specific area, studies are scarce (Barbosa et al, 2021;Pucheta-Martínez et al, 2020;Dagiliene et al, 2020;Ribeiro and Aibar-Guzman, 2010). However, existing research covers the level of disclosure and its determinants, but none includes the topic of earnings management or accounting conservatism.…”

mentioning

confidence: 99%

Environmental sustainability disclosure and accounting conservatism

Pereira¹,

Accounting²

2021

Int. j. adv. appl. sci.

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In this article, we analyzed whether the level of accounting conservatism of a firm is affected by its environmental sustainability information disclosure. For that purpose, we developed two Environmental Disclosure Indices (EDI), one obtained from the mandatory reporting (annual report) and the other from the voluntary reporting (sustainability report), and compared the effects on conditional conservatism. Content analysis was used to develop two indices to evaluate the level of environmental disclosures. Moreover, the technique of multiple linear regression, using panel data, was applied to provide original empirical evidence for Portuguese companies listed on the stock exchange. We found evidence that higher environmental sustainability information disclosure enhances the conservative accounting practice, which is consistent with the argument that a higher level of Corporate Social Responsibility tends to increase financial statements transparency. In addition, we found that environmental information disclosed in specific and voluntary reporting has a superior impact on the level of conditional conservatism. These results showed that managers tend to engage in earnings management activities by being more accounting conservative in order to meet shareholders' expectations and disclose higher levels of environmental information. Therefore, this article brings some insights to the debate about the usefulness of accounting conservatism and the contribution of sustainability goals to monitor and guide managers’ activities.

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Does stakeholder engagement encourage environmental reporting? The mediating role of firm performance

Cited by 16 publications

References 58 publications

Disentangling the Bidirectional Relationships Across the Corporate Sustainable Development Indicators

Disentangling the Bidirectional Relationships Across the Corporate Sustainable Development Indicators

Product market competition, board gender diversity and corporate sustainability performance: international evidence

Environmental sustainability disclosure and accounting conservatism

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