PurposeThe purpose of this paper is to investigate the direct and indirect links between environmental, social and governance (ESG) practices and financial performance using the mediate role of green innovation.Design/methodology/approachTo test the current study hypotheses, the authors applied linear regressions with a panel data using the Thomson Reuters ASSET4 and Bloomberg database from a sample of 115 UK and 90 Germany companies selected from the ESG index over the period 2005–2019.FindingsThe results show that the strengths ESG increase the firm value and the weaknesses decrease it. In addition, the authors find that green innovation fully mediates the relationship between ESG practices and financial performance in UK and Germany.Practical implicationsThe findings provide interesting implications to academics practitioners and regulators who are interested in discovering ESG score, financial performance and green innovation. The results also provide insights to regulators and the board of directors on future growth opportunities for the company and the country.Originality/valueThis study is unique in examining the mediation effect of green innovation on the relationship between ESG practices and financial performance.

This study aims to examine the potential effect that corporate social responsibility practices (CSR) have on financial performance in ESG firms, using the moderating role of board characteristics. To test the moderating effect of the board characteristics in the relationship between CSR practices and financial performance, we applied linear regressions with panel data using the Thomson Reuters ASSET4 database from European countries in analyzing data of 225 listed companies between 2015 and 2019. The results show that board characteristics partially moderate the relationship between CSR practices and financial performance in European ESG firms. In addition, this study indicates that CSR practices affect the firm’s financial performance positively. The study findings appended a new dimension to governance research that could provide policymakers and regulators with a valuable source of information to strengthen governance mechanisms for better financial performance. Previous studies mostly investigate the direct effect of corporate governance on financial performance. A few studies examine the moderating effect of CSR practice. This paper contributes by investigating the moderating effect of governance mechanisms in the ESG context.

PurposeThis study aims to examine the potential effect that business ethics (BE) in general and corporate social responsibility (CSR) more specifically can exert on the voluntary disclosure (VD) of intellectual capital (IC) for the ethically most engaged firms in the world.Design/methodology/approachThe research design is based on an inductive approach. As part of the global quantitative investigation, the authors have analyzed the impact of BE and CSR on the transparent communication of the IC. The data under analysis have been investigated using multiple linear regression.FindingsBased on a sample of 83 enterprises emerging as the most ethical companies in the world, the results have revealed that the adoption of ethical and socially responsible approach is positively associated with the extent of VD about IC. This finding may help attenuating the asymmetry of information and the conflict of interest potentially arising with corporate partners. Hence, IC-VD may stand as an evidence of ethical and socially responsible behaviors.Practical implicationsGlobal and national regulators and policymakers can be involved by these results when setting social reporting standards because they suggest that institutional and/or cultural factors affect top management's social reporting behavior in the publication of the IC information.Social implicationsDirect and indirect stakeholders, if supported by ethical and socially responsible behaviors of the company, could assess more in detail the quality of the disclosed information concerning the IC.Originality/valueMost of the studies that have been conducted in this field have examined the effect of BE and CSR on the firm's overall transparency, neglecting their potential effect on IC disclosure. This study is designed to fill in this gap through testing the impact of ethical and socially responsible approaches specifically on IC-VD.

PurposeThe aim of this study is to analyze the possible relationship between board characteristics and integrated reporting quality in an international setting.Design/methodology/approachTo test the study's hypotheses, the authors applied linear regressions with a panel data, and the authors collected data from the Thomson Reuters database (ASSET4) and from the annual reports from European companies to analyze data of 253 listed companies selected from the environmental, social and governance (ESG) index between 2010 and 2019.FindingsThe reached empirical results prove to indicate well that both of the board size, independence and diversity appear to have a significantly positive effect on the integrated reporting quality. Noteworthy, also, is the fact that the appointment of an independent nonexecutive chairman is positively associated with the integrated reporting related quality, and holds for firms with a nonindependent chairman.Practical implicationsBeyond the theoretical implications, our study also has several practical implications. These findings are particularly relevant for managers, shareholders, and policymakers. Thus, stakeholders should consider the accuracy of disclosure in determining the optimal reporting strategy (reducing risk estimation, returns' stock volatility, increasing long-term shareholder value and reputation of the firm).Originality/valueThis article is motivated by the low number of works in the context about the corporate social responsibility and sustainability issues. It makes an important contribution to the academic literature by adding to the limited body of research on integrated reporting and corporate governance in an ESG company setting. The study is also important for practitioners seeking to improve the quality of their integrated reports.

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