Environmental sustainability performance and shareholder value: an international fuzzy-set qualitative comparative analysis

Abstract

PurposeConsidering corporate governance (CG hereinafter) practices' variety across Anglo-American and European countries, this study relies on contingency and complexity theories to investigate the effect of environmental sustainability performance (ESP hereinafter) on shareholder value under various configurations of board of directors (BoD hereinafter), firm and country characteristics.Design/methodology/approachThe author used the Thomson Reuters Environment Pillar Score (ASSET4) and the Total Shareholder Return to assess ESP and shareholder value respectively. The author applied a fuzzy-set qualitative comparative analysis (fsQCA hereinafter) to an unbalanced panel of 2,284 observations from 486 European and Anglo-American non-financial listed firms over the period 2016–2020.FindingsThe author found a positive association between ESP and shareholder value and he displayed notable differences between Anglo-American and European economies regarding causal predictors of this positive association. Within European firms operating under civil law code where investor protection is low and family ownership is widespread, ESP creates shareholder value under configurations of causal predictors that significantly differ from those of their Anglo-American peers. The author's findings are robust to different identification strategies.Practical implicationsThis study assists researchers, practitioners, shareholders and policymakers the significant roles that BoD diversity, organisational and institutional traits are jointly playing as determinants of the ESP-shareholder value relationship.Originality/valueThe author's study offers a more encompassing, complete and theoretically richer picture of the key drivers and outcomes of ESP.

Can Environmental Performance Protect Shareholder Value During the Covid-19 Pandemic?

“…For example, [23] and other researchers have found positive relationships between environmental performance and stock prices. Jouber's (2023) [24] findings indicate a positive association between environmental sustainability performance and shareholder value, albeit with differences across AngloAmerican and European economies. Other studies by Al-Tuwaijri et al (2004), Endrikat (2016), and Iatridis (2012) also suggest that environmental performance influences stock price movements positively.…”

“…For instance, research by [23] found that companies with low pollution levels tend to gain additional economic benefits, whereas the opposite is true for highly polluting companies. Habib Jouber, 2023 [24] found a positive association between environmental sustainability performance and shareholder value but he found difference result between Anglo-American and European Economies. This is supported by other studies that yield similar results, indicating that a company's environmental performance influences stock price movements in a positive direction [4], [25], [26].…”

Cultural Influence on Corporate Sustainability: A Board of Directors Perspective

“…It is considered that institutional theory is established as a dynamic component that includes factors that influence the interaction between different actors (Athar et al 2023). It is possible to observe that the relationship between organizational innovation, organi-zational learning, the sustainability innovation performance, and the board directors is based on the behavior that firms assume, the government structure, and the strategies that ensure success in the long-term context in which they operate (Melis and Nawaz 2023;Jouber 2023).…”