Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

The environmental implications of corporate economic activities have led to growing demands for firms and their boards to adopt sustainable strategies and to disseminate more useful information about their activities and impacts on environment. This paper investigates the impact of board's corporate social responsibility (CSR) strategy and orientation on the quantity and quality of environmental sustainability disclosure in UK listed firms. We find that effective board CSR strategy and CSR‐oriented directors have a positive and significant impact on the quality of environmental sustainability disclosure, but not on the quantity. Our findings also suggest that the existence of a CSR committee and issuance of a stand‐alone CSR report are positively and significantly related to environmental sustainability disclosure. When we distinguish between firms with high and low environmental risk, we find that the board CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms. These results suggest that the board CSR/sustainability practices play an important role in ensuring a firm's legitimacy and accountability towards stakeholders. Our findings shed new light on this under‐researched area and could be of interest to companies, policy‐makers and other stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

The role of innovation in the implementation of green supply chain management practices

How organizational green practices become routinely embedded in supply chains remains underexplored in the literature. Based on the practice‐based view and normalization process theory, this study adopts a novel perspective on green supply chain management (GSCM) practices implementation and suggests that innovation is a crucial mechanism in such process. Specifically, we theorize and test the mediating effect of product and process innovation on the relationship between GSCM practices and sustainability performance. Survey data from 173 manufacturing firms were used to test the model hypotheses. Our findings show that product and process innovation mediate the relationship between GSCM practices and sustainability performance. The findings also suggest that the relevance of different innovation mechanisms depends on the stage of the operational lifecycle within which the practices are implemented. Our study provides insights for managers and scholars seeking to define innovation strategies to ensure the successful implementation of GSCM practices.     

An analysis of environmental corporate social responsibility

This article investigates corporate social responsibility (CSR) practices while taking into account their product substitutability and environmental responsibility. CSR firms, integrating environmental and social concerns into its business operations, are introduced. The effects of the firms' social concerns, environmental responsibility, and product substitutability are all captured. First, firms' social concerns improve both outputs and CSR firms' objective function value, while reducing the profit maximization firm's profits. Second, environmental responsibility has the contrary effects. Both the outputs and the objective function values of both firms decrease with their product substitutability. Finally, social concern effects on CSR firms' performance are uncertain.     

Sustainable Production: Practices and Determinant Factors of Green Supply Chain Management of Chinese Companies

This paper explores the green supply chain management (GSCM) of companies based in the Yangtze River Delta, China. The companies' overall GSCM practice level (L_GSCM) is measured by using the data from 165 valid respondents in a questionnaire survey conducted during April and May 2009. The relationships between L_GSCM and the classified determinant factors are analyzed. It is indicated that Chinese companies are still at a preliminary stage of GSCM practices. Their environmental management in cooperation with external members of the supply chain is very marginal. A company's L_GSCM is significantly and positively associated with the external pressures from regulatory, domestic clients and business competitors. As an internal factor, a company's learning capacity greatly determines L_GSCM. We also confirm that the internal factors function as intermediate variables of external pressures in influencing a company's GSCM. A company's environmental management capacities will be strongly enhanced by frequent internal training of employees to increase its involvement in GSCM practices. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Environmental management systems and green supply chain management: complements for sustainability?

Some researchers question the legitimacy of EMSs since organizations can claim to have one when in fact they make no attempt to reduce their environmental harm. In instances where EMSs enhance an organization's environmental performance, critics argue that improvements are likely to occur within the organization's operational boundaries rather than being extended throughout the supply chain. However, previous research suggests that the organizational capabilities required to adopt an EMS may facilitate GSCM implementation and the institutional pressures to adopt both management practices are similar. Consequently, EMS adopters may have a greater propensity to expand their focus beyond their organizational boundaries and utilize GSCM practices to minimize system‐wide environmental impacts. This research illuminates the debate by empirically evaluating the relationship between EMS and GSCM practices. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Corporate sustainability and financial performance: Collective reputation as moderator of the relationship between environmental performance and firm market value

Markets value superior corporate sustainability performance in part because investors use a firm's environmental performance as a signal of desirable but difficult-to-observe attributes, such as the firm's integrity capacity. Yet a signaling conflict can arise when a firm belongs to an organizational form that has a collective reputation for being unethical. In such circumstances, the firm's environmental performance may no longer credibly signal its underlying integrity capacity, leading markets to adjust downward the value they would otherwise place on the firm's environmental performance. Using longitudinal data on South Korean firms, we find that improvements in firm environmental performance lead to smaller increases in market values for firms belonging to a poorly reputed organizational form. However, firms can partially recover lost value by adopting firm features that reduce the signaling conflict, thereby restoring the notion of corporate sustainability performance driving firm market values.     

Understanding sustainable development flexibility: An information perspective

Although flexibility has been considered critical in responding to uncertainty in a business environment, few studies have explored firms' flexibility in sustainable development. To understand the nature of firms that can respond better to uncertainty in their sustainable development practices, this study defines sustainable development flexibility and investigates the mechanism underlying its formation. The study proposes a conceptual framework on the interactions of managers' environmental attitude and cognitive style, as well as firms' information integration on sustainable development flexibility. A questionnaire survey was developed to test the corresponding hypotheses, and 241 valid responses were received from middle- and top-level managers in Chinese firms. The results show that (a) the higher the manager's environmental attitude, the higher the firm's information integration and greater sustainable supply chain flexibility, and (b) the more intuitive the manager's cognitive style, the greater the impact of environmental attitude on sustainable development flexibility.     

Impact of Environmental Performance on Firm Value for Sustainable Investment: Evidence from Large US Firms

This research examines the impact of environmental performance on firm value, applying the event study methodology to Newsweek’s ‘Green Rankings’ announcement of 2012 for large US firms. Specifically, it analyzes the impact of the absolute green score and green rank of firms on their performance in the stock market. We found that investors perceive the announcement as positive news, leading to significant positive standardized cumulative abnormal returns (SCARs). After controlling for industry‐ and firm‐specific effects, we observed that firms with repeated green rankings for enhancing environmental performance showed significantly higher SCARs than those with either reduced or unchanged environmental performance. In addition, the environmental impact score measuring environmental damage from a firm's operational activities was found to be the most influential factor in improving the firm's value. Our findings are beneficial to managers in allocating resources to different types of environmental initiative, and provide valuable insight for sustainable environmental investment. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

LRN 2016 SPECIAL – the antecedents and consequences of reduction within a supply chain collaboration orientation of CO2 emissions: evidence from China

ABSTRACT

This paper explores the impact of a predisposition towards supply chain collaboration (SCC) on the reduction of CO₂ emissions, along with its consequences, within the context of a growing recognition of green collaboration. The study draws upon three theoretical lenses, i.e. natural-resource-based view (NRBV), resource dependence theory (RDT) and institutional theory. It conceptualises a research framework in which the underlying constructs are defined and the hypotheses postulated. The empirical investigation was undertaken in China, resulting in data pertaining to 167 companies compiled from a questionnaire survey and subsequently analysed using structural equation modelling. The research findings reveal a causal relationship between two orientations, i.e. SCC orientation and a firm's CO₂ emission reduction orientation, and SCC-led CO₂ emission reduction and its impact on a firm's performance. The study suggests that, in a ‘low-carbon’ business environment, firms can guarantee the engagement of an SCC-led CO₂ emission reduction initiative towards broad environmental sustainability.     

Does adoption of ISO 56002-2019 and green innovation reporting enhance the firm sustainable development goal performance? An emerging paradigm

Reporting is a means of communication for companies to their respective stakeholders. The literature on non-financial reporting has mostly focused on operational, Carbon Discloser Project (CDP), and environmental disclosure to firm performance. This reporting and disclosure approach adopted by companies in their sustainability practices appears to be a normative approach. However, there has been a growing demand by stakeholders to incorporate proactive approach in business activities. To meet that, green innovation practices (GIPs) has been integrated as a new element in environmental reporting, thereby reflecting the proactiveness of companies in their adoption of green innovation reporting (GIR). The objective of this study is to advocate for greater disclosure on sustainability reporting by incorporating the GIPs of companies and substantial, sustainable development goal contribution, along with the moderation of the newly upgraded ISO 56002-2019 innovation management system. Adoption of green innovation reporting and ISO 56002-2019 will enhance the level of transparency of business activities and create greater stakeholder confidence along with enhancing the firm's sustainable development of goal performance. Furthermore, an extensive literature review was undertaken to create a GIR framework (i.e., product, process, service and technology) for firms to integrate GIPs into sustainability reporting. The conceptual model proposed the adoption of green innovation reporting and ISO 56002-2019 innovation management system to firm sustainable development goal. This needs to be injected into the sustainable reporting of companies to reflect their innovativeness, actual sustainable business practices and sustainable development goal performance for the firm.     

Competitive sustainability and stakeholder engagement: Exploring awareness,motivation, and capability

In adding to competitive dynamics and sustainability literature, this study examines the role of a supplier and consumer on a focal firm's sustainability competitiveness through the awareness, motivation, and capability (AMC) perspective and stakeholder engagement research. Regression analyses are performed utilizing secondary sustainability and financial data to test proposed environmental and social competitiveness hypotheses. A constraint factor model is also tested. This study finds that a focal firm's motivation is positively associated with its own sustainability competitiveness. The study also finds that awareness and capability are negatively associated with environmental and social competitiveness. Finally, whereas suppliers' AMC have no significant impact, customer awareness and capability do. The findings reflect both conformity and divergence from the AMC model when applying it to a supply chain context as well as enhance the managerial understanding of how a supply and customer base can impact their own sustainability competitiveness.     

Stakeholder pressure for sustainability: Can ‘innovative capabilities’ explain the idiosyncratic response in the manufacturing firms?

This study explores role of innovative capabilities in determining a manufacturing firm's response to stakeholder pressure for adopting sustainable practices. Drawing on the theory of conservatism, we delineate that the firm's response is idiosyncratic and undergirded in the nature of its innovative capabilities. Our empirical investigation reveals that the response to the stakeholder pressure is mediated by the nature of the firm's innovative capabilities. Indian manufacturing firms are identified as unit of analysis for this study. The individual manufacturing facilities implement the environmental practices. The findings suggest that the manufacturing firm's exposure to exploitative/exploratory innovative capabilities triggers sustainable behaviours with ephemeral focus and enduring focus. Further, the exploratory/exploitative innovation is capable of explaining idiosyncratic behaviour for the firms' sustainability practices adoption. The findings delineate, with analysis, that unlike China, regulatory stakeholder pressures in India inhibit the adoption of sustainable practices with enduring focus in manufacturing firms.     

Sustainability in multi-tier supply chains: Understanding the double agency role of the first-tier supplier

In light of the growing complexity of globally dispersed, multi-tier supply chains, the involvement of first-tier suppliers has become instrumental in the quest for achieving sustainability compliance along the supply chain. We describe this new responsibility as the double agency role. We employ agency and institutional theory arguments to explore the conditions under which first-tier suppliers will act as agents who fulfill the lead firm's sustainability requirements (i.e., the primary agency role) and implement these requirements in their suppliers' operations (i.e., the secondary agency role). The findings from three in-depth case studies embedded in different institutional contexts highlight the importance for lead firms to incentivize each agency role separately and to reduce information asymmetries, particularly at the second-tier level. In addition, our inductive analysis reveals several contingency factors that influence the coupling of the secondary agency role of the first-tier supplier. These factors include resource availability at the first-tier supplier's firm, the lead firm's focus on the triple-bottom-line dimension (i.e., environmental or social), the lead firm's use of power, and the lead firm's internal alignment of the sustainability and purchasing function. We integrate our findings in a conceptual framework that advances the research agenda on multi-tier sustainable supply chains, and we subsequently outline the practical implications of assigning the double agency role to first tier suppliers.     

Are internal manufacturing and external supply chain flexibilities complementary capabilities?

Manufacturing flexibility is often viewed as a strategic capability that enables firms to more effectively meet heterogeneous market demands arising, in part, from increased product proliferation. However, recent studies suggest that the operational challenges associated with meeting this objective may be heavily dependent not only upon a firm's internal modification, mix, and new product flexibilities, but also upon the flexibility of its inbound and outbound supply chain partners. Drawing upon the theory of Complementarity, we examine if simultaneous utilization of both internal and external flexibilities does in fact create synergies that can improve a firm's delivery performance. Based on a sample of 158 U.S. manufacturing plants, we find that the extent to which performance enhancing synergies are generated is primarily dependent upon the type of internal flexibility that is paired with supply chain flexibilities. Additionally, we find that when synergies do exist, external supplier and logistics flexibilities generally tend to enhance the scope of flexible response, while internal flexibilities generally tend to enhance the achievability of a flexible response. Taken together, our findings suggest that the ability of firms to actually reap the synergistic benefits of an integrated system of supply chain flexibility is much more complex and nuanced than previously believed or expected.     

Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy

The purpose of this study is to investigate the impact of board sustainability committees on environmental and social performance and to examine the mediating effect of corporate social responsibility (CSR) strategy on the relationship between the presence of board sustainability committees and corporate sustainability performance. Using data of U.K. listed firms for the period of 2009–2016, the study employs panel regression analysis and bootstrapping techniques to test study hypotheses. The results suggest that the presence of a sustainability committee improves the effectiveness of CSR strategies. The results also indicate that firms with effective CSR strategies exhibit better environmental and social performance. Further, the empirical results show that the effectiveness of CSR strategy explains the positive relationship between board sustainability committees and corporate environmental and social performance, thus supporting the theoretical framework of the study. The findings of the study shed new light on this research direction and could be of interest to board members, managers, practitioners, investors, policy makers, and regulators that plan to promote sustainability practices and strategies needed for sustainable development.     

Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices

Green supply chain management (GSCM) has been a developing topic for at least a couple of decades. Over this time, significant complexities have been observed in its management. Helping to simplify and understand these complexities is necessary from both a practical and research perspective. Given this situation and to further enhance understanding of the topic and even supply chain management in general, this paper develops and empirically tests a theoretical model on the different types of institutional pressures motivating manufacturing enterprises to pursue green supply chain management (GSCM) practices and commensurate performance outcomes. Using a sample of 396 Chinese manufacturers, path analysis is used to evaluate the many structural links. The statistic results show that institutional pressures have driven the manufacturer adoption of internal GSCM practices which in turn relate to their external GSCM practices adoption. The statistic results also suggest that GSCM practices do not directly affect economic performance, but can improve it indirectly. This research contributes to the literature on institutional theory in corporate environmental practices. The research findings provide useful insights for managers seeking to adopt GSCM practices. The results also provide policy insights for professional organizations, regulators, and legislators to further promote GSCM.     

Standardization or localization? Executing corporate philanthropy in international firms

• Corporate social responsibility (CSR) has become a key component of a firm's reputation. The reputational vulnerabilities and pressure for CSR are perhaps greatest among international firms with business activities across many countries and cultures. Although the strategies of firms entering new markets have been well researched, the CSR component of the market entry decision has been largely ignored, despite its significant relationship with the financial performance of the firm. Further, previous research has largely considered CSR from an environmental performance point of view, and thus has focused on a minimum level of investment in CSR as opposed to the optimal form of the investment. Our paper seeks to address this gap by examining market entry decisions as they relate to corporate philanthropy.

Copyright © 2009 John Wiley & Sons, Ltd.     

Sustainability Management within Supply Chains – A Resource Dependence View

Proceeding from three basic concepts of resource dependence theory – organizational effectiveness, interdependence and external control – we conducted a multiple‐case study to investigate factors that facilitate and hinder sustainability management within supply chains. Our empirical observations highlight that focal firms do not necessarily transfer their own corporate sustainability agendas into control mechanisms for managing the sustainability of their suppliers. Based on this insight, we develop a new theory that explains how intra‐ and interorganizational sustainability management is affected by a firm's business case for promoting sustainability, control mechanisms, trade‐offs, trust and market liberalization. The theory offers new insights into drivers and barriers for effective interorganizational sustainability management, whereas previous theories could not fully explain the reasons for diverging sustainability management practices in supply chains. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment     

Creating social and environmental value through integrated thinking: International evidence

Integrated thinking (IT) is a managerial mindset increasingly discussed in the context of value creation. Through the lens of systems theory, this study examines how the degree to which IT is embedded in a firm's strategy and day-to-day business processes is associated with the firm's social and environmental value creation. Using a broad international dataset, we find strong evidence that our measure of IT is positively related to a firm's sustainability performance (SP), which we use to operationalize social and environmental value creation (or erosion). Our results also reveal that the increase in a firm's SP might come at the cost of a short-term decrease in financial performance (FP). We find no indication, however, that IT induces a trade-off between SP and long-term FP. Integrated thinking appears to stipulate long-term financial value creation instead. We further explore moderating factors within the organizational and institutional context of our sample firms and highlight implications for society, corporate practice, and policymaking.     

Enhancing the role of human resource management in corporate sustainability and social responsibility: A multi-stakeholder,multidimensional approach to HRM

This paper focuses on the increased pressure for corporations to engage in corporate sustainability (CS) and corporate social responsibility (CSR) in order to address the current crisis of confidence in business, align their activities with the needs and expectations of a broader set of stakeholders, and help tackle the world's grand challenges. We argue that human resource management (HRM) has a potentially vital role to play in contributing to a firm's CS/CSR efforts, but so far has failed to deliver. We explore the reasons for this failure and discuss ways for HRM to play a more prominent role in the design and implementation of a firm's CS/CSR strategy. Building on earlier attempts to integrate corporate responsibility and sustainability into the HRM performance construct, we propose a multidimensional, multi-stakeholder approach to sustainable HRM that encompasses activities aimed both at avoiding harmful consequences for stakeholders and contributing to positive outcomes along the triple bottom line (i.e., people, planet, and prosperity). We discuss implications for research and develop a set of propositions and guidelines for future research.