Sustainability materiality matrices in doubt: may prioritizations of aspects overestimate environmental performance?

This study builds on the research gap that arises from the consistency analysis of the GRI-materiality approach with other prioritization approaches. The main objective is to explore to what extent corporate environmental performance is consistent using two different prioritization approaches. This study employs a novel quantitative approach to assess environmental performance through the prioritization of environmental aspects by using companies’ materiality analysis and independent expert knowledge. The empirical analysis focuses on the environmental performance analysis of wearing apparel companies. The main findings reveal that companies with better environmental performance could be using materiality analysis to further embellish the positive performance or for greenwashing purposes. This study could serve as a starting point to improve understanding of how companies could identify, from an objective and comparable basis, those environmental aspects that are essential to their business strategy and that are necessary to help stakeholders to make fully informed decisions

Changes in the influence of board characterisitcs on corporate results due to the recent global financial crisis

The main purpose of this study is to analyse the changes caused by the global financial crisis on the influence of board characteristics on corporate results, in terms of corporate performance, corporate risk-taking, and earnings management. Sample comprises S&P 500 listed firms during 2002-2008. This study reveals that the environmental conditions call for different behaviour from directors to fulfil their responsibilities and suggests changes in normative and voluntary guidelines for improving good practices in the boardroom

Top executive pay in Spanish banking system

This study examines consistency between compensation systems and corporate performance. The main purpose is to analyse how the performance has affected the short-term executive pay in Spanish banking system during the period 2004–2008. The main results reveal that pay-performance sensitivity is asymmetrical regarding the sign of the variation of the performance, since the pay-performance sensitivity is greater when the variation of the results is positive than when the variation of the results is negative. This finding is consistent with the managerial power theory and calls into question the role of the pay-performance incentives to align interest of executives and shareholders

Age Diversity: An Empirical Study in the Board of Directors

This study aims to explore how board age diversity affects corporate performance. This study develops three hypotheses built on the perspective of the upper echelons and Harrison and Klein's (2007 Harrison, D. and K. Klein. “What's the Difference? Diversity Constructs as Separation, Variety, or Disparity in Organizations.” Academy of Management Review 32, no. 4 (2007): 1199–1228.[CrossRef], [Web of Science ®], [Google Scholar]) diversity typology. Focusing on age diversity and using a board of directors as a unit of analysis, this study empirically tests the effects of each type of age diversity on corporate performance in a sample of European listed firms for the year 2009. This study advances the understanding of board behavior and its relationships with corporate results, and presents a new approach to study age diversity from an integrated point of view.The authors wish acknowledge the financial support received from projects P1•1B2010-13 and P1•1B2010- 04 through the Universitat Jaume I and Master’s Degree in Sustainability and Social Corporate Responsibility

The Effect of Environmental, Social and Governance Consistency on Economic Results

This study aims to explore how environmental, social and governance (ESG) consistency impacts the firm performance, specifically, the relationship between ESG performance and economic performance (EP). This study posits that the company’s commitment and effectiveness towards the creation of consistent competitive advantage in environmental, social and governance dimensions constitutes an intangible value that leads improvements in corporate performance. This work uses a panel dataset for listed firms of the EU-15 countries during the period 2002 to 2011 and applies Generalized method of moments (GMM) estimator system in order to address the potential unobserved heterogeneity and dynamic endogeneity. The main results reveal that the global effect of ESG performance on EP for those firms that present interdimensional consistency is greater than the rest, except for higher levels of ESG performance.The authors wish acknowledge the financial support received from P1•1B2013-31 and P1•1B2013-48 projects through the Universitat Jaume I, and the Sustainability and Corporate Social Responsibility Master Degree (UJI–UNED). The authors thank the anonymous reviewers for their insightful comments and suggestions

Rating the Raters: Evaluating how ESG Rating Agencies Integrate Sustainability Principles

Environmental, social, and governance (ESG) rating agencies, acting as relevant financial market actors, should take a stand on working towards achieving a more sustainable development. In this context, the objective of this paper is, on the one hand, to understand how criteria used by ESG rating agencies in their assessment processes have evolved over the last ten years and, on the other hand, to analyze whether ESG rating agencies are contributing to fostering sustainable development by the inclusion of sustainability principles into their assessment processes and practices according to the ESG criteria. This research is based on a comparative descriptive analysis of the public information provided by the most representative ESG rating and information provider agencies in the financial market in two periods: 2008 and 2018. The findings show that ESG rating agencies have integrated new criteria into their assessment models to measure corporate performance more accurately and robustly in order to respond to new global challenges. However, a deep analysis of the criteria also shows that ESG rating agencies do not fully integrate sustainability principles into the corporate sustainability assessment process

Stakeholder engagement in sustainability reporting in higher education An analysis of key internal stakeholders' expectations

Purpose The purpose of this study is to improve the understanding of stakeholder engagement in the context of sustainability reporting (SR) for higher education institutions (HEIs), together with the materiality principle and stakeholder expectations. Design/methodology/approach This research uses an exploratory approach based on content analysis, a case study and descriptive and inferential statistics. Findings Three key findings come out of this research. First, the results indicate that HEIs use diverse criteria for grouping stakeholders and that stakeholder engagement is a heterogeneous process. Second, the expectations of internal stakeholders align with the material aspects of SR. Finally, among internal stakeholders, students and academics disagree on the prioritisation of some sustainability aspects, with non-academic staff adopting an intermediate position. Practical implications This analysis improves our knowledge of stakeholder engagement in HEIs. It helps to identify the relevant impacts of stakeholder engagement, enhances the quality of reporting and encourages a real dialogue with stakeholders. Originality/value The study examines stakeholder engagement and how the materiality principle is adopted by HEIs through SR. Furthermore, it compares these results with stakeholder expectations, considering the discrepancies between stakeholders. The results open the way to future research to explore the potential conflicts and collaborations between and within stakeholders to advance towards more sustainable institutions in the higher education sector

Sustainable supply chain management in a global context: a consistency analysis in the textile industry between environmental management practices at company level and sectoral and global environmental challenges.

In a global context, it is crucial to measure and report the corporate sustainability impacts taking into account what is happening along the whole supply chains. The objective of this study is to analyze whether environmental measurement and reporting practices, currently developed by companies under a global supply chain context, are aligned with global environmental challenges and the environmental hotspots at the sectoral level. To tackle this objective, this study has been focused on the textile sector, due to the relevance of its environmental impacts. A research was conducted based on the analysis of global environmental challenges: 1) at company level, on the measurement and reporting of specific environmental indicators connected with the impact categories of the European Organization Environmental Footprint (OEF); and 2) on the analysis of textile industry environmental hotspots, through the technical tool SimaPro that allows their quantification and identification along the life cycle phases using different scenarios. The results show a consistency between global environmental challenges and company environmental disclosure; however, a disconnection between the specific environmental indicators reported by textile companies and the main hotspots of the sector are observed. This implies that companies could be managing environmental issues related to global environmental concerns but ignoring those critical environmental issues truly relevant from a technical point of view, according to the nature of their activity. The paper argues that is not only necessary to consider the corporate awareness regarding global environmental challenges, but also to address the real environmental hotspots at the sectoral level. This paper represents a contribution in the discussion about what sustainability management implies along the supply chains, emphasizing the need to advance in a consistent and science-based integration of global environmental challenges, environmental hotspots at the sectoral level and environmental management practices at company level. The results obtained help global chain actors and other organizations to address this challenge

SDG reporting: an analysis of corporate sustainability leaders

Purpose This study aims to empirically analyze a sound commitment and a consistent integration of sustainable development goals (SDGs) in the corporate reporting and management systems of companies that have a leading position in sustainability. Design/methodology/approach The study applies a content analysis procedure based on a proposed analytical framework to codify the commitment and the SDG integration. In order to analyze the consistency of the integration, this study has provided a “SDG integration” score based on fuzzy inference systems methods. The companies in the sample have been identified as benchmarks in terms of sustainability in a specific region of Spain. Findings The findings show a lack of formality regarding the SDG commitment at the highest decision-making level and a low level of SDG integration in the reporting and management systems. These results are mainly explained because the most companies do not prioritize according to the materiality analysis and those SDGs more reported have not been deployed along targets and KPIs in a consistent way. Research limitations/implications The results provide practical implications that help to overcome the limitations in terms of comparison and consistency of the SDGs-reported information. It also illustrates how the leading sustainable companies are doing the SDG reporting and suggests which elements could be improved to promote a consistent integration of the SDGs in the management systems. Originality/value This study provides new work lines in the promotion of an effective SDG-business reporting based on a robust management structure that allows an alignment among the SDG-business decisions based on a normative, strategic and operational approach

Sustainability rating agencies as a driver of socially responsible investment

El conjunto de actores de los mercados financieros a nivel mundial están demandando de forma creciente que la información financiera de las empresas se vea integrada con información de carácter ambiental, social y de gobierno corporativo. Las agencias de calificación de la sostenibilidad surgen en los mercados como oferentes de dicha información, desarrollado sus propias herramientas de medición y evaluación de los criterios financieros, ambientales y de gobernanza (FASG). El objetivo de este artículo es poner de manifiesto la función impulsora y modeladora que están realizando estas agencias en el análisis de la sostenibilidad corporativa, sus metodologías de evaluación y los criterios que utilizan, constatando que están potenciando el desarrollo de la inversión socialmente responsable (o inversión sostenible, o inversión con criterios ASG), y de las finanzas sostenibles, tanto por ofertar bases de datos de criterios FASG, como por la elaboración de índices bursátiles de sostenibilidad que sirven de benchmarking para los fondos de inversión con criterios de sostenibilidad. Sin embargo, por ahora, este impulso no está impactando en la innovación hacia modelos de negocios sostenibles.The financial market actors worldwide are increasingly demanding that the financial information of companies should be integrated with information of an environmental, social and corporate governance nature. The sustainability rating agencies emerge in the markets as providers of such information, developing their own tools for measuring and evaluating the financial, environmental and governance criteria (FESG). The objective of this paper is to highlight the function that these sustainability agencies are fulfilling, their evaluation methodologies and the criteria they use, confirming that they are promoting the development of socially responsible investment (or sustainable investment, or ESG investment). Both for their offer of databases of FESG criteria, and for the elaboration of sustainable indexes that serve as benchmarking for investment funds with sustainability criteria. However, they are not influencing innovation towards sustainable business models