This paper examines whether product market competition is associated with Environmental, Social, and Corporate Governance (ESG) and whether corporate governance moderates the effect of product market competition on ESG. Analysis involving 22,897 firm-year observations from 37 countries shows that companies with higher product competition have lower ESG and those with higher corporate governance have higher ESG. The results also indicate the moderating effect of corporate governance, as the negative relationship between product market competition and ESG diminishes for companies with higher corporate governance. The results remain robust in additional analysis using alternative measures for product market competition and corporate governance. The findings support the joint effect of product market competition and corporate governance in determining corporate performance in ESG. The findings reflect the various pressures influencing ESG practices, and on how the strength of corporate governance plays a vital role in ensuring strategic ESG being employed for the sustainable performance of companies. The findings have implications on companies that want to factor ESG into their plans especially to reinvent their companies for the period that follows the COVID-19 pandemic.

Purpose The Islamic bond, known as sukuk, is an ethical financing avenue driven by religious and profit motives. This study aims to analyze the relation between related party transactions and Sukuk. Companies with high related parties transactions are deemed to be committed toward social capital that they are more likely to choose sukuk for their debt financing. Design/methodology/approach Logistic regression analyses were conducted using data from 122 listed companies in Malaysia. Related party transactions proxy for companies’ commitment to social capital, while the likelihood to choose sukuk represents ethical financing. Findings This study documents a positive relationship between related party borrowings and sukuk, suggesting that close ties through related parties have created an ethical sense that is associated with the uptake of sukuk. Research limitations/implications Future research can opt other measures of related party transactions, such as by identifying the different categories of transactions and related parties. Future research may also extend the sample size by using samples from several countries to enable analysis involving institutional environment variables of the countries. Practical implications Findings of this study highlight sukuk uniqueness by supporting its role as ethical financing avenue through commitment toward social capital. Originality/value This study is the first to use the social capital perspective of related party transactions in identifying ethical financing choice that the authors believe is relevant in the institutional context of developing Muslim countries.

Purpose This paper aims to examine the association between corporate sustainability commitment and cash holding and whether the board’s leadership competency moderates the association. Design/methodology/approach The sample consisted of Islamic banks in Malaysia from 2017 to 2019. The sustainability commitment was measured based on the dimensions of the economic, social and environment of the Sustainable Development Goals (SDG). Findings The sustainability commitment of the Islamic banks are low. The regression results are not supportive of the hypotheses on the association between corporate sustainability commitment and cash holding and the moderating effect of board’s leadership competency. Research limitations/implications The Islamic banks in Malaysia are still in their early stages to achieve the SDGs, but the trend of disclosure suggests that they are gradually embracing the commitment to sustainability practices. It is in support of the agency theory, with findings indicating greater agency cost that is perceived upon companies with greater sustainability commitments. Originality/value This paper integrates the dimensions of the SDG with the value-based intermediation guideline by Bank Negara Malaysia in measuring sustainability commitment of Islamic banks.

Purpose This study aims to examine the association between environmental, social and governance (ESG) performance and cash holdings, as well as whether this association is moderated by Shariah-compliant status. The aim was to test the joint effect of two ethical precepts, namely, the ESG and Shariah-compliant status, in explaining variations in cash holdings. Design/methodology/approach A sample set that consisted of 9,244 firm-year observations from 25 countries from 2016 to 2020 was analysed using regression analysis. Firm-level data were sourced from Thomson Reuters and Refinitiv databases, while country-level data were derived from the World Bank and Hofstede Insights websites. Findings Firms with greater ESG performances were found to have higher cash holdings. The positive association between ESG performance and cash holdings was greater for Shariah-compliant firms compared to non-Shariah-compliant firms. In support of the stakeholder theory, the evidence indicated that Shariah-compliant firms with higher ESG commitments also have higher cash holdings as part of their corporate strategy. Practical implications These findings provided further comprehension to investors that ESG practices among Shariah-compliant firms are essential information during investment decision-making processes. Social implications These findings highlighted ethical corporate practices through two frameworks, namely, ESG commitment and Shariah compliance; hence, contributing towards strategies to reach the Sustainable Development Goal 16 of promoting just, peaceful and inclusive societies. Originality/value This study has focused on the motives for cash holdings by considering the ethical precepts embodying ESG and Shariah compliance to uphold the positive impact of high cash reserves.