Activism for Corporate Responsibility: Conceptualizing Private Regulation Opportunity Structures

In this article, we examine how private regulatory initiatives (PRIs) – which define standards for corporate responsibility (CR) issues and sometimes monitor their application by firms – create opportunities and constraints for activist groups aiming to push firms towards more stringent CR activities. Drawing on social movement theory, we conceptualize how private regulation opportunity structures affect such CR‐based activist groups' targets and tactics at both the firm and field levels. At the field level, we argue that both radical and reformative activist groups direct most of their time and resources towards PRIs with comparatively more stringent standards. At the firm level, while radical activist groups are likely to target firms participating in more stringent PRIs, reformative activist groups target firms participating in less stringent PRIs, or those that do not participate in PRIs at all. When facing unfavourable opportunity structures, CR‐based activist groups tend either to advocate the creation of new PRIs or to shift their activities to pressure other focal points. This article contributes to moving beyond extant literature's emphasis of PRIs as settlements of contentious firm–activist interactions towards also viewing them as starting points for activist groups aiming to push firms towards a more substantive CR engagement.     

Which Corporate Sustainability Activities are Associated with Greater Financial Payoffs?

While many company managers and academic researchers have argued that businesses that develop a sustainability focus also may improve their financial performance, little information is known about whether firms' different types of sustainability activities are related to varying degrees of financial gain. This paper assesses the economic relationship between two types of sustainability activities – lower‐ and higher‐order – derived from the sustainability value framework of Hart and Milstein (2003). Our analysis reveals that both types of sustainability activities are similarly associated with firms' financial performance in terms of direction and trend. However, the average level of financial benefits related to firms' higher‐order sustainability activities (which develop new products and processes) is greater than the average level of financial benefits related to firms' lower‐order sustainability activities (which modify existing products and processes). These findings offer initial evidence that companies that reach further by developing higher‐order sustainability activities may reap greater financial benefits, while improving the natural environment to a greater degree. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

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     

Mapping Corporate Responsibility and Sustainable Supply Chains: an Exploratory Perspective

Corporate responsibility (CR) in general, and sustainable supply chain management in particular, have been a growing concern for companies and researchers over the past decade. However, in scholarly work, sustainability has often been dealt with in a generic fashion or from an anecdotal point of view. Further, research works examining CR on the one hand and sustainable supply chains on the other have been conducted separately. We undertake the multiple factor analysis of a CR rating database (Innovest) which reports longitudinal scores for both the social and environmental performance of 1198 companies in different countries and distinct industries, to demonstrate a strong relationship between CR and a sustainable supply chain. Our findings from exploratory analysis also illustrate the role of country of origin and industry in shaping CR behaviour, highlighting isomorphic as well as allomorphic trends for CR trough time. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Climate Change and Mandatory Carbon Reporting: Impacts on Business Process and Performance

As part of their annual directors' report, UK‐listed companies are now required to disclose their greenhouse gas emissions and account publicly for their contributions to climate change. This paper uses this mandatory carbon reporting to explore wider debates about corporate social responsibility and the purpose, practice, and impacts of such non‐financial reporting. Empirically, it combines documentary analysis of the carbon reporting practices of 176 large firms listed in the FTSE100 and/or subject to the UK government's adaptation reporting power with 60 interviews with stakeholders involved in carbon reporting. Firms disclose their emissions in response to financial incentives, social pressure and/or regulatory compulsion. In turn, rationales shape whether and how carbon reporting influences internal business processes and performance. The importance of reporting to the bottom line varies by sector depending on two variables – energy intensity and economic regulator status – yet there is limited evidence that carbon reporting is driving substantial reductions in emissions. Findings suggest reasons for caution about hopes for ‘nudging’ firms to improve their environmental performance and social responsibility through disclosure requirements.     

How Do Strengths and Weaknesses in Corporate Social Performance Across Different Stakeholder Domains Affect Company Performance?

The existing research on corporate social responsibility (CSR) has largely focused on the positive aspect of corporate social performance (CSP) and company performance (CP) and ignored the relationship between actions that would qualify as negative CSP (or weakness in CSP) towards a stakeholder group and company performance. Using data from the KLD collected over a three‐year period, this study examines the relationship between both CSP weaknesses and strengths and CP across individual stakeholder domains. Results of the study suggest that strengths in CSP related to primary stakeholder domains are associated with superior company performance. However, this relationship is tenuous, at best, in the case of the secondary stakeholder domain. As for weaknesses in CSP, the results suggest that if a firm performs poorly in meeting the expectations of one or more stakeholders it is penalized in the form of poor performance. This finding generally holds true for both primary and secondary stakeholders. Implications of these findings for public policy and businesses planning to address social issues are discussed. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Defining Eco‐efficiency: A Case Study on the Finnish Forest Industry

Environmental reporting is a tool of corporate environmental management that can also be used as research material. The aim of this paper is to produce a comprehensive definition of eco‐efficiency based on the literature and then compare it with definitions identified in the environmental reports published by selected companies. In addition, this paper presents a conceptual framework of the relationship between environmental and economic performance in the companies. Three Finnish companies in the forest industry are selected as case companies. This analysis reviews environmental reports published by the companies from 1998 to 2007. In short, eco‐efficiency can be seen either as an indicator of environmental performance, or as a business strategy for sustainable development. The case companies very seldom give an exact definition of eco‐efficiency in their environmental reports. However, different aspects of eco‐efficiency are often referred to. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Environmental,Sustainable Behaviors and Innovation of Firms During the Financial Crisis

In this paper, we analyze the relation between sustainable and environmental behaviors and performance and innovation. Altogether, 1032 observations are divided into specific groups according to the Carbon Disclosure Project (CDP) Global 500 report and the Dow Jones Sustainability Index (DJSI) for 2008 and 2009. Based on legitimation theory and stakeholder theory, we regard the voluntary activities of firms as having long‐run effective characteristics that can be applied to industry in general. The environmental behavior of firms is represented by CDP activity, while the DJSI represents their sustainable activities. Based on the assumption that corporate environmentalism is a bilateral agreement between policymakers and firms, we answer four specific research questions. (i) What is the relation between voluntary activities and performance of firms? (ii) Do firms' voluntary activities in environmental and sustainable implementations induce innovation? (iii) How does the nature of innovation depend on voluntary type of the firms? (iv) What is the link between firm characteristics and innovation according to voluntary types? From the presented empirical analysis, we find positive relations between corporate environmentalism and innovative activities. We then classify environmental and sustainable issues and propose an empirical model of the links between environmental and sustainable behaviors and innovation activities. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Corporate Carbon and Financial Performance: The Role of Emission Reductions

This article uses econometric techniques to examine the effect of corporate carbon performance on corporate financial performance. I extend the existing literature in this research field by differentiating between two measurement perspectives: carbon performance expressed as annually reported carbon dioxide (CO₂) emission equivalents and improvements in carbon performance over time. Thereby, the article re‐addresses the research question ‘when and how does it pay to be green?’ in the context of carbon emissions and climate change mitigation. Using a nonlinear modeling technique, the findings indicate that it pays to be green for companies with superior carbon performance but not for companies with inferior carbon performance. The results also show that carbon emission mitigation is linearly and significantly positive related to return on sales (ROS) but negatively related to Tobin's q . These contradictory findings help us to understand why – in spite of growing regulatory pressure – companies have been slow to respond with effective action to tackle climate change beyond marginal efficiency improvements that correspond to ‘low‐hanging fruits’. The empirical analysis is based on an unbalanced sample of 7625 firm‐year observations covering carbon emission data (Scope 1 and Scope 2) for 1640 international firms from 2003 to 2015. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Relationship Between Sustainable Development and Financial Performance: International Empirical Research

The aim of this paper is to clarify the relationship between companies' sustainable behavior and their financial performance (FP), which has been studied for several years without reaching a consensus on the effect and the direction of it. Hypotheses are tested for an unbalanced sample of 1960 multinational non‐financial listed companies from 25 countries and one administrative region for the period between 2002 and 2010. Due to the use of an international database and the differences among countries, it is possible to observe divergence between institutional settings. For this reason, a corporate governance system (Anglo‐Saxon, Germanic, Latin and Asian) is used as characteristic of the macro‐environment. Results obtained via the generalized method of moments estimator allow us to support the existence of a positive bidirectional relationship between corporate social responsibility and FP, evidencing the existence of a synergistic circle. The use of market value indicated that investors are able to identify economic, social and environmental practices generating a positive effect on FP. These relationships differ between corporate governance systems, due to the specific characteristics of each system. Findings are robust for each sustainable sub‐index (society, human rights, environmental and board). Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Researching Corporate Social Responsibility Communication: Themes,Opportunities and Challenges

Growing recognition that communication with stakeholders forms an essential element in the design, implementation and success of corporate social responsibility (CSR) has given rise to a burgeoning CSR communication literature. However this literature is scattered across various sub‐disciplines of management research and exhibits considerable heterogeneity in its core assumptions, approaches and goals. This article provides a thematically‐driven review of the extant literature across five core sub‐disciplines, identifying dominant views upon the audience of CSR communication (internal/external actors) and CSR communication purpose, as well as pervasive theoretical approaches and research paradigms manifested across these areas. The article then sets out a new conceptual framework – the 4Is of CSR communication research – that distinguishes between research on CSR Integration, CSR Interpretation, CSR Identity, and CSR Image. This typology of research streams organizes the central themes, opportunities and challenges for CSR communication theory development, and provides a heuristic against which future research can be located.     

Exploring the relationship between environmental orientation and brand value: is there fire or only smoke?

This paper investigates whether a firm's environmental orientation influences corporate brand value. In the discussion on sustainable development, corporate participation is a given, and increasingly firms are adopting environmental policies and practices. This paper observes corporate environmentalism from two perspectives: environmental embeddedness – the level to which environmental values are incorporated in brand identity; and environmental performance – the level of a firm's accordance with environmental policies and good practices. Cross‐analysis of these two perspectives generates four types of corporate environmental orientation: leaders, performers, advocates and laggards. The results do not provide conclusive evidence for whether consumers reward environmental leaders and punish environmental laggards by converting their environmental opinions into brand perceptions and purchasing decisions. It is believed that the hypothesized relationships are moderated and mediated by other stimuli, so managers are advised not to negate corporate social responsibility, but rather to invest wisely in environmental activities and its communication. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation

This paper aims to construct a comprehensive corporate environmental responsibility (CER) engagement measurement to examine the relationship between CER engagement and firm value as well as explore the mediating effect of corporate innovation on this relationship based on a sample of 496 China's A‐share listed companies from 2008 to 2016. The results show that when firms start to adopt environmental regulations, CER would have a negative effect on firm value; however, at a specific level, CER would start to enhance firm value positively. In addition to this, corporate innovation plays a mediating role in the relationship between CER and firm value. Corporate innovation promotes firm value of firms with CER more than firms without CER. Overall, the findings of this paper are extremely relevant for the government, investors, and firm's managers and can be utilized for policy and investment decision making. Also, the findings encourage firms to enhance their sense of environmental responsibility in order to enhance their competitive advantages, enhance corporate innovation capabilities, and thus enhance firm value.     

Do environmental,social, and governance activities improve corporate financial performance?

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 nonnegative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility strategy choices for enhancing corporate sustainability.     

Corporate social responsibility in china: an analysis of domestic and foreign retailers' sustainability dimensions

In the past decade, a sizeable body of literature has built up on the concept and characteristics of corporate social responsibility (CSR) in Western countries, where it has also been referred to as sustainability. More recently, attention has grown for CSR in emerging countries. Remarkably, China has hardly been studied so far. This paper aims to help fill this gap by considering, against this background, the CSR notion in China, through an exploration of a small sample of large retailers in China, both Chinese and non‐Chinese companies. The analysis of CSR/sustainability dimensions, as communicated by these large retailers in both the Chinese and the English language, shows substantial differences between the Chinese and international contexts. Interestingly, the largest divergence can be found for international retailers between their Chinese and corporate attention for CSR (so home versus host settings), most notably in the case of Carrefour, and to a lesser extent Wal‐Mart. In the Chinese context, there are differences between the Chinese and international retailers as well (so domestic versus foreign firms), with the former reporting more on economic dimensions, including philanthropy, and the latter more on product responsibility – contentious labour issues and the environment receive relatively limited attention in both groups in China. The paper concludes with a discussion of the implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Chief executive officer ability,corporate social responsibility,and financial performance: The moderating role of the environment

This paper seeks to explore how chief executive officer (CEO) ability influences the economic impact of corporate social responsibility strategic decisions. Currently, the evidence on the impact of corporate social responsibility on the value of the company is mixed; in this paper, we aim to observe the moderate role played by this particularity of the CEO in the relationship between socially responsible commitment and financial performance. Our results identify that the most able CEOs make investments in social and environmental practices that lead to greater financial performance; in contrast, the less able CEOs can overinvest or underinvest in an opportunistic way for personal benefit at shareholders' expense. In addition, the role that CEO ability plays in social and environmental strategies is particularly pertinent in munificent environments that foment managerial discretion; in these contexts, high managerial ability leads to investment in socially responsible performance, which benefits shareholders by alleviating moral hazard.     

Corporate governance and lesbian,gay, bisexual,and transgender‐supportive human resource policies from corporate social responsibility,resource‐based,and agency perspectives

Corporate boards are responsible for ensuring that managers enact policies that are in shareholders' best interests, and managers are responsible for implementing strategies that are not only profitable but also responsive to changing legal and societal demands and the resource needs of the firm. In this paper, we use the theoretical lenses of corporate social responsibility (CSR), the resource‐based view, and agency theory to investigate the relationship between corporate governance structure and the implementation of supportive lesbian, gay, bisexual, and transgender (LGBT) policies. We analyze 10,233 firm‐year observations and 1,594 unique firms, and our results demonstrate that LGBT‐supportive policies are positively associated with firm performance. We also offer new insight into why not all firms adopt such policies. We exploit the passage of the Sarbanes‐Oxley Act as an exogenous shock that increased board independence, and our difference‐in‐difference estimation shows that firms forced to raise board independence in 2002 were less likely to invest in LGBT‐supportive policies. Results suggest that human resource management (HRM) policies can be guided by CSR and resource‐based views in the pursuit of wealth maximization, but agency conflict may also be a concern for external majority boards. We discuss implications for HRM research practice and corporate governance regarding LGBT policies in organizations.     

Corporate responsibility and value creation in the port sector

The paper reviews existing literature on corporate responsibility (CR) in the port sector and proposes a conceptual framework that brings together the CR drivers in port environmental strategies. The conceptual framework is derived from the existing literature and is based on institutional theory. The literature review is supported by a discussion on CR strategies in 10 major ports around the world. The paper argues that ports tend to replicate environmental strategies across regions and learn from each other, and that a competitive focus on logistics tends to strengthen the importance of CR and in particular of environmental performance in ports. For some ports CR has become an integral part of their value creation proposition mostly as a result of competitive pressure. Furthermore, the paper advances also a correspondence between the degree of port agility and the CR profile of the port. Managerial and policy implications are also discussed.     

Corporate Environmental and Economic Performance of Japanese Manufacturing Firms: Empirical Study for Sustainable Development

This study examines the relationship between environmental performance and economic performance in Japanese manufacturing firms. The environmental performance indicators include CO₂ emissions and the aggregate toxic risk associated with chemical emissions relative to sales. Return on assets (ROA) is used as an indicator of economic performance. We demonstrate that there is a significant inverted U‐shaped relationship between ROA and environmental performance calculated by aggregated toxic risk. We also find that the environmental performance increases ROA through both returns on sales and improved capital turnover. However, we observe a significant positive relationship between financial performance and environmental performance based on CO₂ emissions. These findings may provide evidence for the consequences of firms' environmental behavior and sustainable development. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.     

Playing on Two Chessboards: Reputation Effects between Corporate Social Responsibility (CSR) and Corporate Political Activity (CPA)

It has recently been argued that corporate social responsibility (CSR) is ‘political’. It has been neglected however, that firms also operate politically in a traditional sense, in seeking to secure favourable political conditions for their businesses. We argue that there are potential synergies between CSR and corporate political activity (CPA) that are often overlooked by firms and that recognition of these synergies will stimulate firms to align their CSR and CPA. We develop a conceptual model that specifies how various configurations of a firm's CSR and CPA – alignment, misalignment, and non‐alignment – affect the firm's reputation beyond the separate reputation effects of CSR and CPA. This model has important implications for understanding how and why firms should pay attention to their CPA and CSR configurations, and thereby contributes to the broader issue of why firms should make sure that they are consistent in terms of responding to stakeholder concerns.