Narrow Results

This study examines how providing peer information for evaluation of progressive firms changes individuals’ evaluations. From the large sample of two experimental surveys, it was found that providing peer information leads to a higher expectation of increasing stock prices and willingness to buy. The effect on willingness to buy is greater than the expected increase in stock prices. The effect on women is greater than on men. Individuals who prefer the environment (women’s empowerment) are more willing to buy pro-environment (gender-balanced) stocks when they have peer information. The effect of peer information is greater for individuals with warm-glow motivations.

In this paper, we address whether small- and medium-sized enterprises are turning to FinTech peer-to-peer lenders as a result of decreased access to traditional bank lending. Such lenders have been shown to have a greater focus on Environmental, Social, and Governance principles. We investigate the impact of Basel III and the US Liquidity Coverage Ratio by way of a natural experiment. Our results suggest that these may have led to a decrease in traditional bank lending. We observe that FinTech lenders gained a regulatory advantage and that this can potentially be exploited. We suggest that this would help lending activities directed at sustainable economic growth.

We use an enhanced Russell model data envelopment analysis (DEA) to estimate the efficiency scores of 75 global life and non-life insurance companies as a measure of business performance (BP) from 2018 to 2022. On top of cluster analysis and multidimensional scaling, we conduct ordinary least squares regression to examine the relationship between environmental, social, and governance (ESG) factors and BP, while assessing the moderating role of human capital (HC) in this relationship. Our findings show that low social activity levels would lead to better BP, and the moderating effect of HC on ESG-BP relationships is mixed.

Sustainable topics have become increasingly important in recent years, as the world faces growing environmental and social challenges. Environmental, social, and governance (ESG) ratings are tools used to assess the sustainability practices of companies. This study focuses on the impact of environmental, social and governance components on the financial performance of IT companies. The panel data were collected for 43 IT companies operating in the time period from 2004 to 2020. Data include ESG ratings, their components and financial performance indicators of IT companies. The method of OLS regression, a model with fixed individual effects or a model with random individual effects, was used. It was found that the increase in the environmental and social scores has a significant impact on the financial performance of IT companies. This paper is an extended version of our work published in the ITQM 2022.

With a growing relevance of ESG topics, i.e. environment, social, and governance, this conceptual article builds on sustainability and market orientation research to distinguish two dimensions of sustainability orientation. To date, most companies have concentrated on responsive sustainability orientation, which is reporting-driven and reacts to regulatory push effects to maintain the business with existing customers based on incremental innovations. In contrast, proactive sustainability orientation is opportunity-seeking and characterized by a stronger focus on radical innovations to actively develop new markets based on the expected needs of current and potential new customers. The paper further draws on strategy typology research to develop a conceptual framework for sustainability and innovation strategies. Based on the two dimensions of sustainability orientation, it suggests a typology of four sustainability strategies, i.e. ignorer, defender, explorer, and innovator strategies. In addition, a dynamic perspective and illustrative examples underscore important trends in the transformation towards a circular economy.

Synopsis

The research problem

This study investigated how firms employ corporate social responsibility (CSR) as a precautionary strategy in response to heightened concerns about cybersecurity following the adoption of data breach disclosure laws in the United States.

Motivation

CSR has garnered substantial attention in contemporary society. Simultaneously, the last few decades have witnessed a rapid surge of the digital economy. However, it remains unclear how CSR is adapting to digitalization. In this study, I focused on cybersecurity, a pivotal challenge in the digital age.

Theoretical reasoning

The enactment of data breach disclosure laws enhances the reporting of cybersecurity incidents and intensifies concerns about cybersecurity, promoting firms to take measures to mitigate the adverse impacts of data breaches. Building on the theory that CSR functions like an insurance policy, I hypothesized that firms increase their engagement in CSR to fortify their reputation after the enactment of data breach disclosure laws, helping cushion the potential impact of future breaches.

Analyses

The main analysis employed a difference-in-differences research design to compare the changes in CSR engagement between firms with high and low levels of cybersecurity risk following the enactment of data breach disclosure laws in the United States. Cross-sectional analyses delved into the underlying mechanisms. Additional analyses first explored the role of CSR in mitigating stock price decline and then illustrated reputational concerns after data breaches.

Findings

The main analysis showed that firms with high cybersecurity risk increase their CSR engagement to a greater extent following the adoption of data breach disclosure laws. CSR initiatives are particularly pronounced for firms likely to incur significant losses from data breaches, aligning with the theoretical framework and offering insight into the underlying mechanisms. I also found that firms with fewer financial constraints exhibit stronger CSR initiatives. Furthermore, these CSR initiatives are distinct and cannot be substituted by investments in information technology. The additional analysis illustrates that firms with superior CSR performance undergo a smaller stock price decline surrounding data breach announcements. This supports the notion that CSR functions much like insurance, shielding against the impacts of data breaches. Subsequently, this study presents direct evidence on firms’ concerns regarding the reputational impact of cybersecurity. Overall, this study underscores cybersecurity concerns as a driving force behind social responsibility initiatives in this digital era.

Target population

This research holds significance for policymakers worldwide who are considering cybersecurity-related regulations and for firms seeking effective risk management strategies in the face of cybersecurity challenges.

Synopsis

Research Problem

This study investigated the ramifications of the SEC’s choice not to adopt the International Financial Reporting Standards (IFRS) in 2012.

Motivation

The nonadoption of IFRS by the United States in 2012 raised worries about the country’s influence on IFRS and the standards’ potential divergence from U.S. Generally Accepted Accounting Principles (GAAP). Our analysis offers insights into the United States’ reengagement with the IFRS, the development of sustainability reporting standards, and the evolution of accounting standards.

Test Hypotheses

We hypothesize that the United States has not lost influence over IFRS, and the momentum for these standards has not waned post-2012.

Target Population

We examined countries and firms’ use of U.S. GAAP or IFRS standards, including foreign companies listed in U.S. exchanges.

Methodology

We conducted a robust review of scholarly literature, an analysis of arguments surrounding IFRS adoption in the United States, and a comparative study of IFRS and U.S. GAAP standards through 2022.

Analyses

We examined the historical attempts to integrate IFRS in the United States, market share trends of firms using IFRS, the enduring influence of the United States on IFRS standard setting, empirical evidence on eliminating the IFRS-to-U.S. GAAP reconciliation, and implications for global sustainability standards.

Findings

Our findings challenge the fear that the divergence between IFRS and U.S. GAAP has widened after 2012. IFRS market share increased from 53.3% in 2011 to 76.7% in 2022, refuting assertions of declining momentum. The U.S. influence over IFRS remains intact. The elimination of IFRS-to-U.S. GAAP reconciliation requirements shows mixed empirical effects, warranting further research on market adaptations and firm-specific outcomes in post-reconciliation environments. Our analysis supports the value of pursuing global ESG reporting standards and highlights the complex investor reactions to potential U.S. IFRS adoption.

Based on my more than 40 years of practical experience in banking and my forward-looking vision as a banker, I would share the five major development trends of banks with the distinguished guests under the theme of “The New Horizon of Banking”, including: (1) ESG as an essential embodiment of contemporary responsible finance; (2) the digital transformation of the banking industry as a long-term evolutionary process; (3) the evolution of payment models and the new state of money; (4) cross-industry alliances between the banking and nonbanking industries; and (5) the increasing importance of regulatory technology, RegTech.

As a banking practitioner and a university adjunct professor of finance, I would like to share my observations on five major trends in financial education under the headline The New Horizon of Financial Education. The trends include (1) ESG as an Essential Embodiment of Contemporary Responsible Finance; (2) Digital Transformation as a Long-Term Evolutionary Process of the Financial Sector; (3) Cross-sector Alliances Between Banking and NonBanking Firms; (4) Total Compliance Mechanism in Risk Management; and (5) The Increasing Importance of Regulatory Technology, RegTech.

The effectiveness of Environmental, Social, and Governance (ESG) on corporate performance is an area of growing interest with significant practical implications. However, the role of ESG in fostering corporate innovation has received limited attention, and the mechanisms through which ESG factors influence innovation performance remain inadequately understood. This paper empirically investigates the impact and mechanisms of ESG performance on corporate innovation capabilities using a sample of Chinese A-share listed companies from 2010 to 2021. The results indicate that ESG performance significantly enhances corporate innovation capacity, mediated by the degree of artificial intelligence (AI) adoption and digital transformation. By employing the concept of organisational innovation, this study elucidates the mechanisms of ESG factors on innovation performance, addressing a significant gap in the existing research. The findings offer valuable insights for enterprises aiming to improve their competitive advantage and provide a crucial foundation for policymakers seeking to enhance corporate innovation through targeted reforms.

The gas-rich nation, Qatar, became the first Middle Eastern country to host the FIFA World Cup in 2022, after beating South Korea, Japan, Australia, and the US. Qatar invested an enormous amount of money in implementing the measures outlined by FIFA and United Nation’s Sustainable Development Goals (SDGs), and the World Cup was included in Qatar’s sustainable Vision 2030. Qatar has gained international support and wants to host more mega-events despite controversies surrounding its FIFA World Cup, including workers’ deaths during infrastructure construction and protests from western athletes, politicians, and media against the Qatari government and FIFA’s ban on LGBT+ symbols and alcohol in the stadium. Qatar’s 2022 FIFA World Cup left a sustainable legacy by following ESG principles. This paper analysed how FIFA 2022 applies SDGs, ESG, and Islamic principles and their managerial implications. We concluded with lessons to be learnt from FIFA 2022 and Qatar’s investments in green infrastructure, sustainable mobility, and carbon offsetting, as well as how the country’s efforts to leave a sustainable legacy after the event could inspire other nations.

The framework of this study is the field of crowdfunded microfinance that represents a way to scale up financial access, leveraging digital technology applications. A key element of this value chain is the field partner, represented by a local Microfinance Institution (MFI) that intermediates between the crowdfunding platform and the individual borrowers or group of borrowers. In this context, the main objective of this paper is to measure the financial and prosocial contributions of field partners through crowdfunded microloans. Methodologically, this prosocial impact is measured with an innovative approach, by using network theory to describe the supply and value chains that link crowdfunding investors to field partners and, consequently, to micro-borrowers. The main contribution of this study is the introduction of a global indicator able to quantify the increase of the social impact and the financial system of a country, coming from the presence of ESG-compliant crowdfunded microloans.

In a sustainable economy, each company’s level of carbon risk can change from period to period, but few studies have examined the association among a company’s carbon risk awareness and its level of environmental, social, and governance (ESG) performance. This article studies the effect of corporate-level carbon risk awareness on the ESG performance of China’s A-share listed companies during the period of 2013–2022. The results show a positive effect of carbon risk awareness on the level of companies’ ESG performance. The results also show that media coverage has a significant moderating effect on the relationship between carbon risk awareness and ESG performance. The authors present three factors through which carbon risk awareness affects ESG performance: (i) recognizing high carbon risks allows companies to decrease pollutants and greenhouse gas (GHG) emissions and increase environmental (E) scores; (ii) high carbon risk awareness encourages companies to take responsibility for social employment and improve social (S) outcomes; (iii) higher carbon risk awareness leads to better established sustainable management and higher governance (G) scores. This study plays a significant guiding role in improving corporate ESG practices.

This chapter considers the concept of socially responsible banks through multiple theoretical lenses and from recent empirical evidence. Simply put, socially responsible banks incorporate business ethics and various economic and civic responsibilities into their daily operations. They integrate corporate social responsibility into their lending and decision-making processes, enabling them to develop close relationships and strengthen their social trust with a broad range of stakeholders, including customers, investors, and local communities. Accordingly, they can lay the groundwork for combining their medium- and long-term market presence and highlight their essential contributions to environmental quality and society.

Bloomberg provides timely, reliable and actionable information on sustainability-related financial risks and opportunities for leading business, finance and policy professionals to use in investing, lending, insuring, strategy, and policy decisions…

The Climate Disclosure Standards Board (CDSB) is a non-profit organization that works to provide decision-useful environmental information to markets via mainstream corporate reports. The mission of CDSB is to create the enabling conditions for material climate change and natural capital information to be integrated into mainstream corporate reporting. It is committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. CDSB aims to achieve its mission by offering a framework for reporting environmental information with the same rigor as financial information.

The Sustainability Accounting Standards Board (SASB) is an independent nonprofit organization that sets standards for companies to use when disclosing Environmental, Social, and Governance (ESG) information to investors. SASB standards help companies publicly report consistent and comparable information about how they manage issues related to climate change, natural resource constraints, technological innovation, population growth, and more. As a result, the SASB standards enable investors to better understand how a company impacts — and is impacted by — a changing world. With this information in hand, investors can direct their capital to those companies that are being managed most effectively for the long term.

Ghana is one of the world’s largest cocoa producers and supplies most of the global chocolate manufacturers. However, the vital role that the country plays in the chocolate industry has come at a cost in terms of human and environmental problems which have led to deforestation and child labor. Although chocolate manufacturers are implementing new strategies to solve these ESG issues, the results have been incomplete in terms of their effectiveness. This chapter seeks to understand how firms can generate social and financial benefits while tackling ESG issues through the application of Moon’s (2012) CSO framework. It examines the case of the global chocolate manufacturer Fuji Oil Holdings Inc. and its sustainable procurement activities in Ghana. The research investigated how the company is tackling ESG issues by applying the CSO framework. While it shows that there is a high compatibility between the company’s implemented activities and CSO, the results illustrated in ESG and sustainable reports should be improved to better understand their outcomes. The paper provides empirical examples to tackle ESG issues through CSO and contributes to introducing a framework (CSO) other than Porter and Kramer’s (2011) CSV, which is currently widely employed in academia.

The idea behind the optimal ESG portfolio (OESGP) is to expand the mean–variance theory by adding the portfolio ESG value (PESGV) multiplied by the ESG strength parameter γ (which is the investor’s choice) to the minimizing objective function [26,27]. PESGV is assumed to be the sum of portfolio constituents’ weighted ESG ratings that are offered by several providers. In this work, we analyzed the sensitivity of the OESGP based on the constituents of the Dow Jones Index to the ESG ratings provided by MSCI, S&P Global, and Sustainalytics. We describe discrepancies among various ESG ratings for the same securities and their effects on the OESGP performance. We found that with growing γ, the OESGP diversity and Sharpe ratio may monotonically decrease. However, the ESG-tilted Sharpe ratio has one or two maximums. The 1st maximum exists at moderate values of γ and yields a moderately diversified OESGP, which can serve as a criterion for optimal ESG portfolios. The 2nd maximum at large γ corresponds to highly concentrated OESGPs. It appears as if the portfolio has one or two securities with a lucky combination of high returns and high ESG ratings.