How do ESG pillars impact firms’ marketing performance? A configurational analysis in the pharmaceutical sector

Abstract

Purpose This study aims to contribute to international doctrine by testing how environmental social governance (ESG) pillars can affect marketing performance in the pharmaceutical industry. Design/methodology/approach The authors follow a pioneering approach, using a fuzzy-set qualitative comparative analysis and data from the largest European listed companies belonging to the pharmaceutical industry in 2019. Specifically, the authors contribute to international doctrine by testing how ESG pillars can affect marketing performance by presenting two configurational paths that may help to clarify not only the individual role of the pillars but also how their interrelationships predict marketing performance. Findings The results identify two different causal configurations that lead to higher marketing performance. These configurations allow us to think more carefully about the role of ESG pillars in the pharmaceutical sector. These results could help managers reflect upon and justify their choice to invest in specific ESG pillars, highlighting the importance of the governance pillar. Originality/value To the best of the authors’ knowledge, this study is the first to use configurational analysis to investigate combinations of ESG pillars that lead firms to achieve higher levels of marketing performance.

Influence of ESGC Indicators on Financial Performance of Listed Pharmaceutical Companies

“…In contrast with this idea, Dalal and Thaker [ 63 ] studied Indian companies included on the NSE 100 ESG Index database for the period of 2015–2017, showing that a good corporate ESG performance improves financial results. Paolone et al [ 64 ] consider market share to be a function of the ESG pillars score, and they use the ESG score as a proxy of the fundamental strategy of corporate sustainability.…”

“…The latter authors concluded that companies with a high level of consumer awareness could increase their value by increasing CSR, if this was accompanied by a good reputation. For Paolone et al [ 64 ], ESG metrics are conducive to a high marketing performance, highlighting the high impact on the governance pillar as an essential determinant for ensuring a higher level of market performance. In parallel, while CSR activities have a negligible or negative impact on company value, the costs sometimes exceed the benefits due to a low advertising intensity [ 69 ].…”

“…For this reason, and given the influence that the industrial sector can have, the objective of this work is to show the relationship that exists, on the one hand, between the ESG construct and the financial performance indicators in the pharmaceutical industry and, on the other hand, between the controversies and the aforementioned financial indicators. ESG indicators are used to measure and understand CSR activities in the company [ 64 ]. Additionally, the valuation of ESG pillars jointly seems to be employed in most of the literature, as investors value them differently [ 74 ].…”

ESG: disentangling the governance pillar

“…In 2004, the World Bank's International Financial Corporation (IFC) laid a cornerstone for the debate with the publication of the report "Who Cares Wins", which provided principles where interpretations of the idea of ESG could stand. Since the release of IFC's report, the construction of the idea of ESG has gained momentumand there is no sign that the movement will cool down (Cappucci, 2018;Clementino & Perkins, 2020;Eccles, Ioannou, & Serafeim, 2014;Paolone, Cucari, Wu, & Tiscini, 2021;Schoenmaker & Schramade, 2019).…”

Sustainability disclosure and its impact on firm's value for Energy and Healthcare industry

“…The results show a positive association between ESG performance and financial performance in particular for studies focused on major companies in developed economies. Paolone et al (2021) have conducted research on the impact of ESG scores on marketing performance for the largest European companies in the pharmaceutical sector using innovative research employing a fuzzy set qualitative comparative analysis. The values of the ESG scores and market share used were those published on Thomson Reuters and Statista.com.…”