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     

Enhancing Market Valuation of ESG Performance: Is Integrated Reporting Keeping its Promise?

This paper studies the effectiveness of a firm's strategy to report on its ESG activities with regard to the extent and direction in which the firm's ESG performance is valued by capital market investors. It is the first to disentangle the moderating effects of different types of ESG reporting on market valuation of ESG performance and to analyze whether following the current integrated reporting trend is worth the effort. Results indicate that ESG performance is valued more strongly and in the (desired) positive direction when firms publish an ESG report, irrespective of its type (stand‐alone or integrated). Furthermore, integrated reporting is associated with superior outcomes compared with a stand‐alone report for composite ESG and corporate governance performance. Our findings are important for corporate managers, as they help to understand market valuation of ESG performance in dependence on the reporting type and provide guidance for formulating and evaluating the reporting strategy. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Entrepreneurial orientation,environmental sustainability and new venture performance: Does stakeholder integration matter?

Previous research has theorised that the link between entrepreneurial orientation (EO) and performance is mediated by environmental sustainability orientation (ESO). However, firm‐level factors that may moderate this relationship are lacking. This paper attempts to fill this gap by examining how and when EO enhances new venture performance by considering ESO as mediator and stakeholder integration as an important contingent factor. Using primary data obtained from 242 chief executive officers/entrepreneurs, it was found that the indirect relationship between EO and new venture performance is strengthened at high levels of stakeholder integration. Theoretical and practical implications are discussed.     

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.     

Determinants of Traditional Sustainability Reporting Versus Integrated Reporting. An Institutionalist Approach

The aim of this study is to analyze similarities and differences between companies with traditional sustainability reporting (TSR) and those that publish integrated reports. Based on institutional theory we identify potential determinants of integrated reporting (IR) and test their relevance empirically in a sample of 309 companies. Our analysis shows that IR companies are different from TSR companies with regard to several country‐level determinants. In particular, investor and employment protection laws, the intensity of market coordination and ownership concentration, the level of economic, environmental and social development, the degree of national corporate responsibility and the value system of the country of origin proved to be relevant. Based on these results, both implications for practice and future studies are derived. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.