Do corporate social responsibility practices improve financial performance? A case study of airline companies

Kuo, Tsai‐Chi; Chen, Hsiao-Min; Meng, Hsien-Mi

doi:10.1016/j.jclepro.2021.127380

Cited by 80 publications

(43 citation statements)

References 48 publications

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“…As we noticed, studies that approach this topic through multi-level analyses are likely to obtain more feasible results. Kuo et al. (2021) traced ESG performance and short-term FP indicators and proved that airlines should give priority to the selection of key performance indicators for CSR implementation towards sustainability.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Performance mapping in two-step cluster analysis through ESEG disclosures and EPS

Popa

Bogdan

Sabău-Popa

et al. 2022

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PurposeThe purpose of this work is twofold. First, looks to identify the main homogenous groups of companies after environmental, social, economic and governance (ESEG) disclosures, non-financial statement and earnings per share (EPS), and second investigates the connection between variables.Design/methodology/approachUsing financial and non-financial information from annual reports of private listed companies, the authors performed two-step cluster analysis (TSCA) in the first stage of the research, followed by parametric, nonparametric correlation analysis, as well as regression analysis based on panel data, in the second stage.FindingsResults of TSCA revealed a cluster of companies with good financial and non-financial outcomes and a cluster of companies with poor performance. The performance dynamics showed a slight improvement during the period for few companies and composition analysis of clusters by industries through Kruskal–Wallis test highlighted differences between clusters, only for 2017. The main findings confirm a direct, although weak in intensity but statistically significant correlation between ESEG disclosure index, its sustainability component and financial performance (FP), valid for the entire period. Also, the results showed a direct link of low intensity to average, but statistically significant between the non-financial statement and EPS, valid only for 2017 and 2018.Research limitations/implicationsThe results indicate mixed findings which invites further in-depth research. Limits of the study can be found in selected indicators and the short period of time analyzed. However, the practical implications are worth considering from the perspective of finding new managerial tools that can better shape the relationship between ESEG disclosures and FP.Practical implicationsESEG Dindx can be an instrument for managers that can optimize the link between the FP of companies and its sustainable development.Social implicationsESEG Dindx measures the disclosure degree of ESEG information by the companies listed on Bucharest Stock Exchange (BSE). The main findings of the work confirm a direct, although weak in intensity but statistically significant correlation between ESEG disclosure index, its sustainability component and FP, valid for the entire period.Originality/valueThis study adds value to the existing literature by the proposed research framework, design of ESEG Dindx and the way correlations between variables were investigated.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Performance mapping in two-step cluster analysis through ESEG disclosures and EPS

Popa

Bogdan

Sabău-Popa

et al. 2022

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“…Sub-dimensions of the Environmental performance area include Greenhouse Gas (GHG) and other air pollutants emissions, energy consumption, raw material use, waste production and management (water, solid, hazardous), water usage and recycling, impact on biodiversity, impact on ecosystems and innovation in environmentally friendly products and services. An example of an environmental factor for airlines includes aircraft carbon emissions (Li et al, 2021;Kuo et al, 2021).…”

Section: The Esg Frameworkmentioning

confidence: 99%

“…The Social pillar refers to internal social policies related to internal and external stakeholders. Sub-dimensions of the Social performance area include employee rights, child labor, forced and compulsory labor, workplace health and safety, customer health and safety, discrimination, gender and diversity, equal opportunities, poverty and community impact, supply chain management, training and education, customer privacy and community impacts (Li et al, 2021;Kuo et al, 2021). An example of a social factor for an airline would include full compliance with flight crew duty and rest time requirements.…”

Section: The Esg Frameworkmentioning

confidence: 99%

“…The Governance pillar refers to the implementation of sound corporate governance principles to guarantee that business decisions are made in the best interests of shareholders, such as the separation of the CEO and board chairman's responsibilities. Subdimensions of the Governance performance area include codes of conduct and business principles, management accountability, transparency and disclosure, executive compensation, board diversity and structure, bribery and corruption, stakeholder engagement, shareholder rights, whistle-blowing schemes and whistleblower protection, lobbying and political influence (Li et al, 2021;Kuo et al, 2021). An example of a governance factor for an airline would include dealing with regulators and authorities, such as the International Air Transport Association (IATA) and International Civil Aviation Organization (ICAO), in a transparent manner.…”

Section: The Esg Frameworkmentioning

confidence: 99%

“…As an investment concept, the three core components of ESG are the most important aspects to take into account during the investment analysis and decision-making process (Li et al, 2021). Lately, ESG has become an important tool for organizations worldwide to communicate with their stakeholders, improve their corporate image, and enhance competitive advantage (Kuo et al, 2021). As a result, the percentage of the largest multinationals that issue a sustainability report has risen from 12% in 1993 to 80% in 2020 (Howard-Grenville, 2021).…”

Section: Drivers For Esg Reportingmentioning

confidence: 99%

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Why ESG Reporting is Particularly Important for the Airlines during the Covid-19 Pandemic

Paraschi

2022

JBMS

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The concept of environment, society, and governance (ESG) performance is gaining momentum in all business sectors as the global economic system recognises the importance of sustainability. The airline industry has several incentives to apply ESG initiatives and report the related results. The literature has established positive links between noble ESG scores and priority access to funding, better compliance with regulatory requirements, increased customer loyalty, and employee productivity, and improved firm value and financial performance. Although adherence to ESG goals may seem contradictive to tremendous cost reduction pressures posed to airlines due to the covid-19 pandemic, literature also argues that ESG can play a vital role in the post-covid-19 world as ESG can alleviate airlines’ financial risks. The aim of this short paper is to raise awareness among aviation practitioners and policymakers on the importance of ESG application and reporting as a means to strengthen business resilience and mitigate the adverse impact of the covid-19 pandemic and future crises that challenge the airline industry.

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How can organizations measure the integration of environmental, social, and governance (ESG) criteria? Validation of an instrument using item response theory to capture workers' perception

Barbosa,

Crispim,

da Silva

et al. 2024

Bus Strat Env

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Evaluation of corporate sustainability parameters has become part of organizational management. Item Response Theory (IRT) serves as a valuable approach for quantifying and exploring observable variables associated with these parameters. Therefore, this article aims to propose, apply, and validate an instrument utilizing IRT to measure environmental, social, and governance (ESG) impacts on corporate sustainability performance, using the perspective of workers. Workers were chosen as key stakeholders for the present study, as they were pointed by previous research as central to corporate sustainability decisions. The present paper addresses a literature gap by introducing, implementing, and validating a research instrument, along with a comparative scale, to assess the effects of integrating ESG criteria on corporate sustainability performance. Workers of two major Brazilian electricity sector companies were respondents for this instrument. Multigroup IRT method was used to assess item discrimination and difficulty levels, and to construct a scale reflecting workers' perceptions of integrating ESG criteria. The questionnaire consisted of 15 items, demonstrating Content Validity Coefficients (CVC) above .97, confirming the instrument's content effectiveness. Cronbach's Alpha and McDonald's Omega were greater than .94 for both companies. Questionnaire items demonstrated satisfactory discrimination ability and varying difficulty levels, resulting in a five‐level scale to gauge the impacts of ESG criteria. This research contributes through the introduction and validation of the research instrument, the latent trait assessment scale, and the evaluation of workers' perceptions regarding ESG criteria impacts on corporate sustainability performance. In conclusion, the proposed instrument showed robust psychometric properties, displaying favorable reliability and validity parameters. It effectively measures the impacts of ESG criteria, providing interpretable levels aligned with the unique characteristics of its constituent items

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Do corporate social responsibility practices improve financial performance? A case study of airline companies

Cited by 80 publications

References 48 publications

Performance mapping in two-step cluster analysis through ESEG disclosures and EPS

Performance mapping in two-step cluster analysis through ESEG disclosures and EPS

Why ESG Reporting is Particularly Important for the Airlines during the Covid-19 Pandemic

How can organizations measure the integration of environmental, social, and governance (ESG) criteria? Validation of an instrument using item response theory to capture workers' perception

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