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Explore the Research on Environmental Sustainability & Business 

 

STATE OF CORPORATE CITIZENSHIP

Level: Beginner
Reading Time: 10 minutes
Helpful When: Exploring how business leaders view environmental sustainability

 

DIVERSITY, EQUITY, & INCLUSION REPORT

Level: Beginner to Advanced
Reading Time: 15 minutes
Key Takeaways: XYZ
Helpful When: Making a case for expanding DE&I programming

 

EMPLOYEE RESOURCE GROUPS

Level: Beginner
Reading Time: 10 minutes
Key Takeaways: XYZ
Helpful When: Planning or launching new ERGs

Explore the Research Briefs on Environmental Sustainability & Business 

Active shareholders and foreign investors help drive sustainability strategies
<p><b>Suggested audience: Top leaders, corporate citizenship professionals, sustainability leaders, finance professionals</b></p> <p>Researchers analyzed the ESG data from a well-known database for 276 different S&amp;P 500 companies between 2007 and 2017 to measure how firms’ environmental strategies are influenced by the nature of their shareholders and their exposure to foreign markets. In this study, environmental strategy is characterized as the firms’ environmental proactivity. The researchers distinguished between strategic and financial shareholders to examine how their characterization influences the firms’ environmental strategy. Researchers controlled for firm size, return on assets, industry sector, regional operations, ownership concentration, and the quality of governance practices. The research team conducted a random effects panel regression model to test their hypotheses.</p> <ul><li>Environmental proactivity: Measured by the firm’s environmental score (as determined by the database) and defined as the firm’s effort to exceed minimum legal requirements through new technologies.</li><li>Strategic shareholders: Entities that invest to influence corporate strategy.</li><li>Financial shareholders: Entitles that manage investments towards profitability only.</li><li>Foreign market exposure: Measured by calculating the total percentage of foreign revenue per year for each firm.</li></ul> <p> </p>
<p>Takeaway: Strategic shareholders positively influence a firms’ environmental proactivity, while the impact of financial shareholders in dependent on the firm’s level of foreign market exposure.  <br /> </p>
Value of Corporate Citizenship
centers:ccc/topic/value-of-corporate-citizenship
CSR Improving Financial Performance through Employee’s Work Engagement and Strategic Cohesion
<p><b>Suggested audience: Top leaders, Corporate Citizenship Professionals, Financial Industry</b></p> <p>Researchers observed 3,343 participants across 518 branches of one of the largest commercial banks in Asia over a period of 2 years. </p> <p>They analyzed the effect that corporate social responsibility (CSR) has on a company’s financial performance when taking employee work engagement into consideration. They looked at strategic CSR initiatives (e.g., paperless billing as a way to improve both company and customer sustainability), competitor-oriented strategies (e.g., sponsoring a sports event because a competitor had). The different market strategies that they examined were customer-oriented and competitor-oriented strategies. </p> <p>Using a three-wave longitudinal dataset of survey responses, they analyzed each branch’s CSR work, market strategies, employee work engagement, and financial performance. </p>
<p>Takeaway:<b>&nbsp;</b>Firms implementing CSR practices that align with their market strategies increase employee engagement, which can ultimately enhance financial performance.<br> </p>
Value of Corporate Citizenship
centers:ccc/topic/environmental-sustainability
Do GHG Emissions and/or Green Innovation Affect Financial Results for Corporate Venture Investments?
<p><b>Suggested audience: Top leaders, investors, policymakers</b></p> <p>To investigate how greenhouse gas (GHG) emissions and green innovation affect the financial performance of corporate investors (i.e., established corporations making capital investments in privately held entrepreneurial ventures), researchers looked at the Scope 1 and 2 emissions data and the green patent data of 133 U.S. corporate investors, from 2002 to 2019.</p> <p>The researchers predicted that corporate investors with better environmental performance (i.e., lower GHG emissions) would demonstrate better financial performance; that firms with more green innovation would also demonstrate better financial performance; and that firms with both better environmental performance and more green innovation would perform better financially, as well.</p> <p>To measure firms’ environmental performance, they looked at total CO2 and CO2-equivalent emissions, in tons for Scope 1 and Scope 2. To measure quantity and quality of green innovation they looked at both the number of green patent applications by a firm in each year, plus the number of subsequent citations for these green patents. To measure financial performance, they pulled data from a leading financial database, looking at three different financial metrics: return on assets (ROA), return on equity (ROE), and market value/replacement value.</p> <p>The researchers controlled for financial leverage, firm size, capital intensity, revenue growth, innovation capacity, and overall corporate social responsibility (CSR) performance. <br /> </p>
<p>Takeaway: GHG-emission reduction and green innovation—both separately and combined—have a significant positive effect on the financial performance of corporations making venture capital investments.<br /> </p>
Value of Corporate Citizenship
centers:ccc/topic/environmental-sustainability
Lost and Found in Translation: Globalization and the Emergence of CSR Narratives
<p><b>Suggested audience: Top leaders, corporate citizenship professionals, ESG reporting teams, marketing, communications, environment and sustainability teams, human rights professionals</b></p> <p>Researchers examined over 3,000 corporate social responsibility (CSR) reports covering the years 2000-2018 from more than 200 publicly listed firms with headquarters in eight emerging countries. All reports were published in English. They explored how companies use language to balance international legitimacy and headquarters-country institutional considerations. The researchers observed headquarters-country resource dependence, degree of government autocracy, and internationalization of the firm impacted CSR reports’ emphasis—or lack thereof—of environment or human rights narratives.</p> <p>Researchers created a dictionary of over 700 keywords related to either the environment framing (e.g., emissions) or human rights framing (e.g., equality). This was used to code the text of the studied CSR reports for analysis. </p> <p>Researchers controlled for firm return on assets, slack resources, firm size, media exposure, state-ownership, business group, firm age, firm sector (e.g., extractive, manufacturing, services), and time. They conducted additional checks for robustness. <br /> </p>
<p>Takeaway: Globalization of firm activities raises the bar for ESG disclosure<br />     </p>
centers:ccc/topic/environmental-sustainability
The Case for a Long-Term Perspective on the Financial Value of Sustainability Initiatives
<p><b>Suggested audience: Top leaders, sustainability professionals</b></p> <p>Researchers gathered observations from over 2,800 firms over the period 2004 to 2020 to investigate whether firms with better sustainability performance are more financially resilient during crises. They analyzed the effect of sustainability performance on financial performance and whether this relationship is affected by an economic crisis (the 2007–2008 financial economic crisis and the 2020 COVID-19 pandemic). Researchers measured financial performance through return on assets (ROA) and return on equity (ROE), and measured firm sustainability performance by taking the average of an environmental and social performance score of a credible rating database. Researchers controlled for board gender diversity, CEO chairman separation, board independence, leverage, size, gross domestic product (GDP) growth, and country governance.<br /> </p> <p> </p>
<p>Takeaway:<b>&nbsp;</b>Investing in sustainability initiatives has the potential to have a more favorable return on investment in the long term.</p>
Value of Corporate Citizenship
centers:ccc/topic/value-of-corporate-citizenship

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FAQs: Environmental Sustainability for Businesses

Environmental sustainability is the responsible interaction with the environment to avoid depletion or degradation of natural resources and allow for long-term environmental quality. It involves practices that support ecological balance, reduce pollution, and conserve resources to ensure a healthy planet for future generations.

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