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...
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| Veröffentlicht in: | Business strategy and the environment 2019-02, Vol.28 (2), p.286-300 |
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| container_title | Business strategy and the environment |
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| creator | Xie, Jun Nozawa, Wataru Yagi, Michiyuki Fujii, Hidemichi Managi, Shunsuke |
| description | 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. |
| doi_str_mv | 10.1002/bse.2224 |
| format | Article |
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| ispartof | Business strategy and the environment, 2019-02, Vol.28 (2), p.286-300 |
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| source | Wiley Online Library - AutoHoldings Journals |
| subjects | corporate efficiency corporate social responsibility Data envelopment analysis Data processing Efficiency Environmental governance Environmental information ESG activities ESG disclosure Financial performance Governance Market value Operations research Retailing industry Social responsibility stakeholder engagement Sustainability sustainable development Transparency |
| title | Do environmental, social, and governance activities improve corporate financial performance? |
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