Environmental Responsibility and Firm Performance: The Application of an Environmental, Social and Governance Model

Abstract

This paper investigates the way in which environmental responsibility impacts on corporate financial performance, measured by return on equity (ROE) and return on assets (ROA). Using a sample of Korean firms covering the period 2011-2012, and employing two different test methods, namely the OLS and 2SLS methods, we show that the relationships between environmental responsibility performance and firms' ROE and ROA are positive and statistically significant. However, we show that research and development (R&D) intensity (expenditure) does not affect either environmental responsibility or corporate financial performance. The results of this analysis encourage further empirical analysis of the industries, as well as the use of more than one estimation method to determine environmental responsibility and corporate financial performance within firms.

Making SENS: exploring the antecedents and impact of store environmental stewardship climate

“…An organization's environmental responsibility is very locally oriented to the context in which that organization operates. Each organization also has its own strategy, structure, and stakeholder pressures that direct its approach to environmental responsibility, which it adopts in conjunction with its goals to maintain or improve organizational performance (Lee et al 2014). In turn, environmental responsibility demands a fundamental shift in the mindset of customer-facing frontline employees.…”

“…For companies to adapt to contemporary demands for environmental responsibility, their strategic positioning must be generalized at the operational level (Lee et al 2014). Emergent theory suggests that generalizations about issues such as environmental responsibility can be achieved through a marketing doctrine-a set of principles, summarized in easy-tocommunicate rules of thumb, that draw on the company's experience to guide more consistent but flexible decision making at an operational level and improve organizational performance (Challagalla et al 2014).…”

“…Thus facet-specific climates might be regarded as framing the collective understanding and implementation of doctrine within a work unit, to reflect how policies and procedures established at the organizational level get practiced at the subunit level (Zohar and Luria 2004). Specifying climate at this facet-specific level might provide insights into why organizations struggle to align their performance with their environmental responsibility (Lee et al 2014).…”

“…Instead, organizations struggle to align their environmental responsibility with optimal firm performance-an area of active debate (Lee et al 2014). Most retailers organize their central purchasing along economies of scale and scope, but store managers have decision authority to prioritize the sales of regular or green goods and incentivize sales associates accordingly.…”

The Relation between Corporate Social Responsibility and Bank Reputation: A Review and Roadmap

“…Over the past decades, scholars have paid greater attention to the relation between corporate social responsibility (CSR) and corporate reputation (Forcadell & Aracil, 2017).Recently, an increasing number of financial institutions are accepting the idea that there is room to increase their social and environmental responsibilities.The banking sector's commitment to more sustainable practices has interesting implications.The relationships between CSR and reputational risk in the banking sector can be interpreted via social-political theories, which recognize CSR as a tool available to companies to increase their legitimacy toward stakeholders and to improve their transparency toward investors (Carnevale & Mazzuca, 2014).Diverse stakeholders are requiring financial institutions to improve their social and environmental performance.As a result, some banks are developing CSR programs, corporate environmental responsibility (CER) policies, and management systems to reduce potential social and environmental risk, and improve their reputation and performance (Jo et al, 2015).However, despite a growing interest in this area, such linkages have remained relatively unexplored in the banking industry and the precise relationships are not clear (Lee et al, 2016).Moving from these considerations, this study proposes a systematic review of attempts in peer-reviewed scientific literature to analyze and synthesize past studies on the relationships between CSR and reputation in the banking sector.The aim of this study is to provide a complete picture of the research on these relationships by listing, classifying, and comparing existing studies.The review was carried out using the following databases: ISI Web, Google Scholar, and SSRN. I investigate a number of published academic works, summarizing the main approaches, results, and insights.I also provide a roadmap for future study and offer research questions about critical areas of this stream of research.The paper is structured as follows: in section 2 methodological details are provided; section 3 show a descriptive analysis; section 4 provides a discussion on the findings of the literature review; and in section 5 conclusions and future research directions are provided.…”