Impact of Sustainability Reporting and Inadequate Management of ESG Factors on Corporate Performance and Sustainable Growth

Oprean-Stan, Camelia; Oncioiu, Ionica; Iuga, Iulia; Stan, Sebastian

doi:10.3390/su12208536

Cited by 67 publications

(55 citation statements)

References 111 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Exploring the sustainability performances of companies using environmental, social, and governance scores was done by several researchers [2,3,9,10,41,64,65]. Used in addition to the financial score, the use of these scores increases accuracy in assessing performance and risk [64].…”

Section: Background On Non-financial Disclosure and Hypothesis Developmentmentioning

confidence: 99%

Disclosure Dynamics and Non-Financial Reporting Analysis. The Case of Romanian Listed Companies

2021

View full text Add to dashboard Cite

New challenges and perspectives to improve non-financial reporting and the disclosure of environmental, social, and governance indicators have been launched towards the development horizon of Romanian public interest entities, implementing the provisions of Directive 2014/95/EU in the local regulatory framework. In this context, our approach focused on the content analysis of the non-financial information reported by listed companies, for the period 2017–2019, and the measure of the average disclosure degree on environmental, social, economic, and governance (ESEG) indicators. To measure the average degree of disclosure, a composite index was constructed through the main component analysis for categorical data that allowed the classification of sampled companies by sustainable performance. The results showed a slight increase in the ESEG disclosure index at the level of the sampled companies, from 47 units in 2017 to 52 units in 2019, several companies “went ahead” and others “recovered over the period”. Cross-sectional analysis revealed differences in the average non-financial disclosure index, and also in the disclosure index of ESEG indicators. The non-parametric correlation analysis highlighted the existence of a statistically significant positive correlation of medium intensity between the disclosure index of non-financial information and the publication of the non-financial statement or report.

show abstract

Section: Background On Non-financial Disclosure and Hypothesis Developmentmentioning

confidence: 99%

Disclosure Dynamics and Non-Financial Reporting Analysis. The Case of Romanian Listed Companies

2021

View full text Add to dashboard Cite

show abstract

“…The linkage between ESG scores and firm financial performance has been theoretically and empirically explored with inconclusive or contradictory results. Two conflicting theories seek to explain the effect of sustainability on firms' financial performance: value development (e.g., stakeholder theory, agency theory) and value destruction (trade-off theory) [21][22][23]. The approach to value-creation theory suggests that costs are minimized, competitive advantage is reinforced, reputation and legitimacy is developed, performance is maximized, and corporate risk is minimized with ESG disclosure [21,22,24].…”

Section: Introductionmentioning

confidence: 99%

“…Two conflicting theories seek to explain the effect of sustainability on firms' financial performance: value development (e.g., stakeholder theory, agency theory) and value destruction (trade-off theory) [21][22][23]. The approach to value-creation theory suggests that costs are minimized, competitive advantage is reinforced, reputation and legitimacy is developed, performance is maximized, and corporate risk is minimized with ESG disclosure [21,22,24]. On the other side, the value destruction hypothesis implies that ESG disclosure activity is costly and detrimental for shareholders [21,22].…”

Section: Introductionmentioning

confidence: 99%

“…The approach to value-creation theory suggests that costs are minimized, competitive advantage is reinforced, reputation and legitimacy is developed, performance is maximized, and corporate risk is minimized with ESG disclosure [21,22,24]. On the other side, the value destruction hypothesis implies that ESG disclosure activity is costly and detrimental for shareholders [21,22]. In addition, many studies have shown that net profit margin, asset turnover, dividend payment, financial leverage, non-interest income [12][13][14], intangible assets [25,26], working capital policy [27,28], environmental management [29] and other operating and financial performance indicators are related to SGR.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Environmental, Social, Governance Risk and Corporate Sustainable Growth Nexus: Quantile Regression Approach

Teng

Wang

et al. 2021

IJERPH

View full text Add to dashboard Cite

Despite a huge body of literature revealing that the effect of environmental, social and governance (ESG) scores on a firms' financial performance and value, it lacks the empirical research on the nexus between corporate sustainable growth and ESG risk in the existing research. The paper aims to examine the nexus between ESG risk and corporate sustainable growth. This study utilizes a quantile regression approach to explore how ESG risk affects corporate sustainable growth (proxied by sustainable growth rate, SGR). The ordinary least squares estimation results confirm that ESG significantly negatively affects corporate sustainable growth. The quantile regression results reveal ESG risk has a significant negative effect on corporate sustainable growth in the upper quantiles of SGR, but not in the lower and median quantiles. The results show that the impact of ESG risk on the corporate sustainable growth is asymmetric and affected by the distribution of SGR. Furthermore, the research results identify that the negative relationship between ESG risk and corporate sustainable growth is particularly apparent for firms in environmentally sensitive industries. This study greatly contributes to existing literature, as with this detailed knowledge, managers can make decisions based on these associations and identify the most lucrative course of action.

show abstract

“…Looking back on past research, Oprean-Stan, Oncioiu, Iuga and Stan [58] showed that the publication of nonfinancial metrics has a positive impact on traditional performance indicators such as return on assets. In fact, investments in renewables have fared better in the current crisis than investments in nonrenewables [4].…”

Section: Knowledge Contributionmentioning

confidence: 99%

Can We Have Our Cake and Eat It? A Review of the Debate on Green Recovery from the COVID-19 Crisis

Gusheva¹,

Gooyert

2021

Sustainability

View full text Add to dashboard Cite

As we speed through the development and distribution of a vaccine for the COVID-19 pandemic, economies are suffering through the worst decline of the century while, at the same time, being pushed to comply with global agreements regarding climate change. Because of this, the economic downturn is also seen as an opportunity to speed up the sustainability transition or, in simple terms, to achieve a “green recovery”. What can we expect from a green recovery? We address this question by reviewing position documents in the debate between green recovery and its opponent, “quick rebound”, in the Netherlands. We apply systems thinking to model causal arguments regarding key concepts comprising green recovery and identify issues of consensus and dissensus. Our findings indicate that green recovery is promising for curbing greenhouse gas emissions and addressing growing socioeconomic inequalities. However, the position of what green recovery means for economic growth, including the development of gross domestic product and employment, is still largely unclear and at times contradictory. While some see tradeoffs, others suggest that economic growth and sustainability goals can be achieved simultaneously. Thus, we conclude by reflecting on the question: Can we have our cake and eat it?

show abstract

Impact of Sustainability Reporting and Inadequate Management of ESG Factors on Corporate Performance and Sustainable Growth

Cited by 67 publications

References 111 publications

Disclosure Dynamics and Non-Financial Reporting Analysis. The Case of Romanian Listed Companies

Disclosure Dynamics and Non-Financial Reporting Analysis. The Case of Romanian Listed Companies

Environmental, Social, Governance Risk and Corporate Sustainable Growth Nexus: Quantile Regression Approach

Can We Have Our Cake and Eat It? A Review of the Debate on Green Recovery from the COVID-19 Crisis

Contact Info

Product

Resources

About