Do environmental, social, and governance activities improve corporate financial performance?
By Jun Xie, Wataru Nozawa, Michiyuki Yagi, Hidemichi Fujii, Shunsuke Managi. Business Strategy and the Environment, 2018
953 citations recorded by the source corpus.
This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets and market value. We found that most of the ESG activities reveal a non-negative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility (CSR) strategy choices for enhancing corporate sustainability.
Subfields: Marketing, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/cb042d6dad43a33edf31912f879173ab3b104b5c
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Citations in the corpus
- Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures (2020, background): “…of the importance of corporate sustainability has been reflected on increasing developments of sustainable disclosure guidelines and standards with the purpose of informing stakeholder about the company’s commitment towards sustainable development (Sarumpaet et al., 2017 ; Xie et al., 2019).”