Given the current undefined relational effect between corporate financial performance (CFP) and corporate social performance (CSP) and the potentially myopic behavior of managers, this paper answers the call from some scholars to contribute towards a better understanding of the relationship between CFP and CSR. Different from other papers, it does so by analyzing the role of innovation activities as a mediator between CFP and CSR, applying a regression and mediation analysis between firms’ financial resources, innovation initiatives, and social and environmental performance. The results demonstrate that innovation is a critical factor in the relationship between CFP and corporate social performance (CSP) as it enables organizations to respond to new economic, social and environmental challenges faster and better than organizations that are not able to innovate. Therefore, the investment of financial resources in innovation initiatives is one of the most important levers to pursue and to increase CSP.

Several studies have focused mainly on the following approach to tackle sustainable development issues at the management level: single sustainability managerial tools adoption (e.g., sustainable balance scorecard) and the “overlap” process between traditional management practices and sustainability-oriented ones. Conversely, integration as an “alignment” process between different sustainability management practices represents a research field, which is currently underinvestigated. Filling this gap, the purpose of the present study is to deepen and find empirical evidence on how sustainability management accounting, control, and reporting systems can be integrated through an alignment process. To this aim, we focused our analysis on a Mediterranean holding company, which is a well-known sustainable corporate practitioner to foster sustainable development in a socioeconomic and environmental problematic context. Therefore, we developed a single business case study analyzing an Egyptian firm to give practical evidence on the role of management accounting, control, and reporting practices in addressing sustainability issues. The analysis shows that the aligning process of different management practices involves a plurality of business aspects to manage, among them cultural and organizational ones. Despite its complexity, such a process is fundamental to pursue medium–long-term goals, ensuring sustainable firm growth and social wellbeing.

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PurposeThis paper investigates whether and how Directive 2014/95/EU affects financial performance as well as its moderation effect on the relationship between financial and non-financial performance, involving different stakeholders' perspectives.Design/methodology/approachWe adopted the panel data approach to perform random effects regression analysis on a sample of 435 European listed non-financial companies, considering a timeframe of six years. Furthermore, the moderation effect of the Directive 2014/95/EU on the relationship between financial and non-financial performance has been tested.FindingsNFD regulation negatively affects firms' operating profitability and shareholder value while produces no effects on debtholders' returns. Nevertheless, the Directive 2014/95/EU has general positive moderating effects on the relationship between non-financial and financial performance, mitigating the direct costs induced by pursuing non-financial performance.Research limitations/implicationsShifting from mimetic to coercive isomorphism caused a strengthening of the complementarity between financial and non-financial performance dimensions, extending the concept of performance itself. The analysis carried out is limited to a short-term timeframe and on non-financial companies subject to the Directive 2014/95/EU.Practical implicationsThe paper highlights trade-offs between the costs induced by non-financial activities and the benefits of being compliant with the non-financial disclosure (NFD) regulation, supporting managers in allocating business resources.Originality/valueThis paper is among the first that investigates the impact of mandatory NFD on the relationship between non-financial and financial performance. It is also one of the earliest in finding some pieces of evidence on the direct impact of Directive 2014/95/EU on EU companies' financial performance.

In recent years, the global financial and economic crisis are rewriting the relationship between business and society, focusing, among other things, on the role of the process of financialization, not only in the economy as a whole but also within non-financial companies. Shareholder value maximization, together with the commoditization of business, has led to a general short-term approach at the expense of capital accumulation and core business activity, to the detriment of not only firms’ competitiveness and productivity but also of human capital, strategic innovation, business ethics, and long-term growth. Within this framework, this study investigates the role of corporate sustainability, analyzing the nexus between financialization, accumulation of real capital, and corporate social performance, an issue that has been neglected so far. Using a sample of US manufacturing firms from 2002 to 2017, we found that, while financialization was negatively correlated with corporate real investment, the environmental and social firm performance positively impacted corporate capital accumulation. Our results support the belief that a focus on environmental, social, and governance standards, fostering real investments, may enhance a firm’s long-term growth with a positive effect on its long-term value.

PurposeThis paper aims to investigate whether being sustainable is also profitable for agri-food companies in the short-term.Design/methodology/approachThe study analysed the impacts of sustainability multiple issues on one-year lagged return on assets, developing a longitudinal analysis focused on best and worst companies' samples for a timeframe of ten years. Notably, we performed OLS regressions on unbalanced panels data collecting overall 1,760 annual observations from 318 companies. Moreover, we examined the moderating effects of slack resources on the relationship between sustainability and the short-term firms' profitability.FindingsThe results show that the best sustainable companies usually improve future profitability. Conversely, the worst ones should prioritize efforts in specific initiatives (i.e. responsible products, eco-innovation, management and governance commitment to sustainability), which positively affect their profitability and compensate possible short-term financial losses due to CSR strategy execution and sustainable production/supply chain management. Finally, the study found mixed results regarding the moderating effects of slack resources on the scrutinized relationships.Practical implicationsThe paper highlights the key environmental, social and governance aspects to be addressed for consolidating and enhancing the virtuous relationship between non-financial and financial performance, distinguishing between best and worst sustainability performers.Originality/valueThis study is among the first that decomposed sustainability in multiple micro aspects (i.e. sustainable strategy, products and processes) investigating the effects of each of them on the short-term agri-food firms' profitability.

Purpose The purpose of this paper is to investigate the challenges that companies could face over time when dealing with sustainability reporting (SR) and focusses on potential mechanisms they may adopt to cope with them. Design/methodology/approach The investigation is conducted adopting the theoretical framework proposed by Baret and Helfrich (2018) and using a longitudinal case study. Findings The authors found that the challenges that gradually arose induced the evolution of SR. Dissemination, employees’ involvement, managerial commitment and routinization/institutionalization of reporting practices appeared to be useful mechanisms to face the related challenges. Conversely, the authors found that stakeholders’ engagement scarcely affected SR. Furthermore, the legislation impacted the extent and quality of disclosed contents and fostered the standardization of the reporting process. Practical implications In analysing how Estra faced SR challenges, this paper emphasizes the mechanisms that can be used to properly manage them, in a gradual and holistic way. Hence, this study offers a useful example for companies approaching SR for the first time. Originality/value The authors adopt a holistic theoretical perspective providing evidence on how SR development within a company depends on the continuous and integrated management of its multiple challenges, also suggesting that its interdependencies with the definition and execution of sustainability should be exploited.