Integrating Environmental,Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study

Addressing environmental, social and governance (ESG) issues has become a critical part of business strategy. This article explores the extent of ESG reporting of metal and mining sector companies listed in the Australian Securities Exchange to determine the nature of ESG indicators in use in the sector. The current study argues that stakeholder engagement is the key to enhance company environmental policy and sustainable development. According to the results of this study, ESG reporting motives are highly influenced by reporting regulations. Given the diversity in reporting of ESG, comparability of ESG strategic performance is problematic. This study contributes towards developing an ESG disclosure index, which companies could use as a legitimacy tool that external stakeholders could use to reliably measure and compare the ESG performance of companies. It also reveals there is an increased demand for more empirical research on integration of sustainability into strategic planning process. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Our Collaborative Future: Activities and Roles of Stakeholders in Sustainability‐Oriented Innovation

While stakeholders have long been at the forefront of sustainable development debates, the emphases have tended to be on different stakeholder pressures, or managing stakeholder expectations about controversial issues. In this paper we bring a fresh direction to these debates and ask in what ways different stakeholders can contribute to sustainable innovation in firms. Based on 80 semi‐structured interviews, we conduct a fine‐grained qualitative analysis of stakeholder activities in sustainability‐oriented innovation (SOI) processes in 13 different companies across Europe. Our analysis identifies eight roles that stakeholders play in SOI processes: stimulator, initiator, broker/mediator, concept refiner, legitimator, educator, context enabler and impact extender. More traditional roles such as legitimator and educator are less common in our cases. However, emerging roles such as stimulator, concept refiner, context enabler and impact extender are clearly identifiable and could be particularly valuable for SOI. We enhance a collaborative perspective of stakeholder theory, finding that stakeholders can play highly collaborative and proactive roles, and argue that secondary stakeholders may actually be more relevant for SOI than primary stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Service innovation as a political process

Service innovation processes are driven by stakeholders in interaction and are understood and sketched as a value negotiation process that consists of an iterative process of securing potential value in service. While previous research has focused on service innovation as a harmonious closed system, our study explores service innovation as a political process in which stakeholders negotiate to create and secure future value. Data are collected through interviews and participant observations in four different case studies. Our study contributes to the field by illuminating service innovation as a political process and explaining how this is operationalized. The findings also contribute to an understanding of how stakeholder resources impact a chosen strategy; the resulting strategy’s impact on the service concept vis-à-vis its potential value; and how several involved stakeholders formulate, negotiate, and secure future potential value, which are the activities that drive a service innovation process.     

Unleashing the Power of Networks: Shareholder Activism,Sustainable Development and Corporate Environmental Policy

In recent years, a new trend has emerged in which shareholder activists have formed networks to empower shareholders and magnify shareholder voices. This study explores the structural patterns and effectiveness of shareholder activism networks and shows how those networks affect corporate sustainability policies. We draw upon stakeholder influence theory, stakeholder network management theory and recent studies on activism networks to examine a shareholder activism network formed around environmental issues. The study found that (1) the structure of shareholder activist networks is largely driven by organizational attributes such as organization type, organizations’ human resources, media visibility and history; and (2) activist organizations with high centralities and eigenvector centralities enjoy more efficient results. This study contributes to our understanding of the business responses to shareholder demands on improving environmental performance and paves the way for future research on sustainable development through partnerships with shareholder networks. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Sustainable tourism development and residents’ perceptions in World Heritage Site destinations

Set in Malaysia’s Lenggong Valley World Heritage Site (WHS), this paper uses stakeholder theory to explore the heterogeneity of positive and negative perceptions among residents and their effects on residents’ support for and participation in sustainable tourism development. Data from 221 completed questionnaire surveys revealed heterogeneous negative perceptions across residents’ age, level of education and economic involvement in tourism. Moreover, residents’ positive perceptions had a positive effect on their support for and participation in tourism development. This study contributes to the resident perception literature by using stakeholder theory to conceptualise the heterogeneity of residents’ perceptions and by examining the effects of those perceptions on their support for and participation in tourism development in a rural WHS destination in the developing world. Furthermore, the findings of this study have practical implications for local authorities aiming to improve residents’ support and participation in tourism planning for sustaining tourism development.     

Enhancing Corporate Environmental Performance Through Reporting and Roadmaps

Managing the carbon footprint of companies and addressing their respective decarbonization plans is a challenging endeavour. The aim of this study is to help companies better understand the issues around decarbonization and environmental performance by suggesting a holistic management process on which they could embark. This process comprises two crucial steps, which are (a) sustainability reporting and (b) low‐carbon roadmaps. These steps are covered and further developed based on a detailed study of the UK food retail sector. This sector is relevant due to its economic and environmental importance, but most importantly it has a significant record of available environmental reports in the public domain and a large potential to influence consumers, policy makers and multiple supply chains. Sustainability reporting is assessed by analysing environmental KPIs disclosed in corporate social responsibility (CSR) reports, and then these are compared against industry standards. This analysis highlights a general lack of consistency and transparency in CSR reporting of UK food retailers. Consequently, a low‐carbon roadmap based on relevant KPIs and on the ‘backcasting’ framework is presented as a case study in order to showcase how a hypothetical UK food retailer can employ a low‐carbon roadmap. The case study demonstrates that ambitious environmental targets are achievable if robust corporate action plans are followed. Furthermore, the case study indicates that capital might be misallocated in favour of highly visible environmental stores and on‐site energy generation technologies, whilst more could be done by applying energy efficiency measures that have the potential to deliver substantial carbon savings. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

How Media Coverage of Corporate Social Irresponsibility Increases Financial Risk

Research summary: This article explores the relationship between corporate social irresponsibility (CSI) and financial risk. We posit that media coverage of CSI generates risk by providing conditions that increase the potential for stakeholder sanctions. Through analyzing an international panel of 539 firms during 2008–2013, we find that firms receiving higher CSI coverage face higher financial risk. We show that the reach of the reporting media outlet is a critical condition for this relationship. Once the outlet has a high reach, the severity of CSI coverage is a boundary condition that further reinforces the effect. Our findings complement existing theory about the risk‐mitigating effect of corporate social responsibility by illuminating the risk‐generating effect of CSI coverage. For executives, these insights suggest complementary strategies for corporate risk management. Managerial summary: This article examines the effect of negative news on financial risk. It shows that negative media articles regarding environmental, social, and governance (ESG) issues increase a firm's credit risk. It also provides a detailed analysis of the impact of an article's reach and severity, i.e., how many readers are exposed to the article and how harshly it criticizes the firm. The results allow to quantitatively assess the risk that emanates from negative ESG news. For executives, three strategies are derived for limiting a firm's exposure to this risk: balancing corporate social responsibility programs with operational safety programs, reporting suboptimal environmental and social performance transparently and proactively, and avoiding acquisition targets and markets with a legacy of negative news. Copyright © 2017 John Wiley & Sons, Ltd.     

Rural tourism quality of services: fundamental contributive factors from tourists’ perceptions

Despite the importance of quality of services in the rural tourism sector, it is somewhat surprising that little study has been done to delve into the fundamental contributive factors that contribute to quality of services from the tourists’ perceptions. This is the first known study undertaken with a view to understand the fundamental contributive factors (i.e. climate change, carrying capacity, relaxation environment, and community support) from the environmental perspectives that link with quality of services in rural tourism destinations. A total of 400 questionnaires were distributed to the tourists who visited four study sites from Borneo Heights, Sarawak, and 215 were returned and used for analysis. To assess the developed model, SmartPLS 2.0 (M3) is applied based on path modelling and then bootstrapping. Interestingly, the findings revealed that tourists are more concerned about the changing of climate and relaxation environment at the destination. They also agreed that community support plays a significant role in the development of quality of services in the rural tourism. This study further discussed on the implications of the findings, limitations, and directions for future research.     

Demand for,and impediments to,the disclosure of information about climate change-related corporate governance practices

Based on a survey of climate change experts in different stakeholder groups and interviews with corporate climate change managers, this study provides insights into the gap between what information stakeholders expect, and what Australian corporations disclose. This paper focuses on annual reports and sustainability reports with specific reference to the disclosure of climate change-related corporate governance practices. The findings culminate in the refinement of a best practice index for the disclosure of climate change-related corporate governance practises. Interview results indicate that the low levels of disclosures made by Australian companies may be due to a number of factors. A lack of proactive stakeholder engagement and an apparent preoccupation with financial performance and advancing shareholders interest, coupled with a failure by managers to accept accountability, seems to go a long way to explaining low levels of disclosure.     

Do Customers Affect the Value Relevance of Sustainability Reporting? Empirical Evidence on Stakeholder Interdependence

In spite of the strategic importance of sustainability reporting in current business practice and the resulting increase in research on its value relevance, studies accounting for stakeholder interdependence are scarce. On the basis of the instrumental stakeholder theory, we investigate whether customers have an impact on the value relevance of sustainability reporting. Using a sample of US listed firms, we show that the value relevance of sustainability reporting is affected by customer profile differences, thereby confirming customer–shareholder interdependence. However, customer profile effects are only predominant if firms' profitability levels are low and disappear as profitability increases. Overall, our findings provide a more nuanced understanding of the value relevance of sustainability reporting. Therefore, we offer managers fine‐grained guidance for value relevant sustainability reporting. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment