Sustainable corporate governance: A review of research on long‐term corporate ownership and sustainability

Kavadis, Nikolaos; Thomsen, Steen

doi:10.1111/corg.12486

Cited by 24 publications

(30 citation statements)

References 334 publications

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“…Heightened societal awareness of environmental, social, and governance (ESG) factors come together with greater social expectations that shareholders can—or even should—institute principles of responsible investing and nudge the corporations in their portfolios to address the grand societal challenges of our times (Azar et al, 2021). Thus, this SI contributes to extend the work of scholars (e.g., Scherer & Voegtlin, 2020) who ask how ownership affects CSR, environmental performance, and sustainability (see also Kavadis & Thomsen, 2022).…”

Section: Introductionmentioning

confidence: 76%

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Ownership and corporate governance across institutional contexts

Castañer

Goranova

Hermes

et al. 2022

Corporate Governance

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Research Question/Issue: The purpose of this special issue (SI) is to encourage research examining the effect of different ownership types in and from different countries on corporate governance and objectives. Research Findings/Insights: The articles included in this SI provide novel insights as to the influence of different types of owners, including states and sovereign wealth funds, families, and different types of institutional investors, as well as of other features of ownership structures, on various aspects of corporate governance, in a variety of institutional contexts. Theoretical/Academic Implications: As companies face different institutional contexts when they operate internationally, and shareholders have become increasingly global, the resulting heterogeneity of shareholder types poses new challenges in our understanding of their behavior. This SI is a step in the direction of disentangling the complex implications of ownership for corporate governance across institutional contexts. Practitioner/Policy Implications: Together with other owner types, the ever-increasing $100 trillion global asset management industry representing 40% of global market capitalization (PwC, 2020) fuels corporate governance and performance pressures on portfolio companies. The articles included in the SI provide useful insights as to the new ownership landscape and its consequences for operating firms in different countries.

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Section: Introductionmentioning

confidence: 76%

“…Thus, this SI contributes to extend the work of scholars (e.g., Scherer & Voegtlin, 2020) who ask how ownership affects CSR, environmental performance, and sustainability (see also Kavadis & Thomsen, 2022).…”

Section: Introductionmentioning

confidence: 81%

Ownership and corporate governance across institutional contexts

Castañer

Goranova

Hermes

et al. 2022

Corporate Governance

Self Cite

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“…The second dimension is social disclosure, which covers a wide range of banks’ socially responsible acts and includes community development programs, health-care programs, training and education programs, financial literacy initiatives and providing access to financial services to underprivileged groups in society (Achua, 2008; Aras et al , 2018; Barako and Brown, 2008; Di Tommaso and Thornton, 2020; Kumar and Prakash, 2020; Sebrina et al , 2023). The last broad aspect is corporate governance, which includes the CSR strategy, board meetings, sustainability strategy, risk management framework, shareholders’ rights, board structure, audit committee, ESG reporting and transparency (Alshbili et al , 2019; Amran et al , 2014; Aras et al , 2018; Birindelli et al , 2018; Cosma et al , 2021; Di Tommaso and Thornton, 2020; Hashim et al , 2015; Kavadis and Thomsen, 2023). Each bank was assigned a score of either 1 (available) or 0 (unavailable) for each indicator, depending on whether the practices are used by the bank and whether the bank discloses them.…”

Section: Methodology and Data Collectionmentioning

confidence: 99%

“…Alshbili et al (2019) emphasized that a firm's socially responsible activity is substantially influenced by its corporate governance qualities. Past research indicates that an effective corporate governance structure improves openness and accountability, leading to improved reporting procedures (Kavadis and Thomsen, 2023;Zaman et al, 2022). Recent institutional and legal changes pertaining to corporate governance and sustainability in India create a unique and intriguing context for the study of sustainability reporting and the relationship between corporate governance and sustainability reporting (Kumar et al, 2022) (Singh et al, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

Examine the level of environmental, social and governance disclosure in sustainability report – a study of the Indian banking sector

Mishra

Sant

2023

IJIS

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Purpose Sustainable development (SD) is widely acknowledged as the center around which all development efforts should revolve. Banking is a crucial component of SD, and the adoption of sustainable banking practices by various banking institutions is a powerful catalyst for its achievement. This paper aims to investigate the level of adoption of environmental, social and governance (ESG) indicators in India and the extent to which financial institutions use these strategies. In addition, the banks have been classified according to their sustainable banking performance and showing a relationship between ESG and sustainability. Design/methodology/approach An ESG framework has been developed for the Indian banking system that focuses on the behavior of banks. The evaluation of literature helps to identify the gaps in particular frameworks for analyzing sustainable banking practices in developing nations because of the variation in economic criteria between developed and developing countries. An attempt to construct a common framework for measuring the banking sector’s sustainable efforts has been done in the past. Specifically in India, where the social and environmental dimensions of sustainability are of equal importance to governance indicators, these studies fall short of providing relevant indicators. Multiple financial reports, nonfinancial reports, corporate social responsibility reports and business responsibility reports of this sector were analyzed using content analysis techniques against ESG indicators for sustainability attainment. Findings The result of this study shows that both the sectors are disclosing their environmental indicators more as compared to other dimensions. While the analysis says that private companies are going better than public companies in terms of disclosing their ESG indicators. As compared to the international banking sector, adoption of Global Reporting Initiatives standards, United Nations Environment Programme Financial Initiatives (UNEP FI), Green Credit Policy and Equator Principles (EP) is near to the ground in India. IDFC bank is the only entity that started implementing EP practices and Yes bank also is doing a wonderful implementation of the green policies and is the signatory to UNEP FI. Practical implications The current state of sustainable banking in India is reflected in the implementation of the proposed framework. To better integrate sustainability problems into banking, this study provides helpful information for banks and other stakeholders. In addition, this study corrects the lack of research in the Indian context on sustainable banking. Originality/value To the best of the authors’ knowledge by far, this is one of the prime studies to inspect the degree of ESG disclosure by the Indian banking sector in their sustainability report.

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“…Existing studies find that firm size (Bissoondoyal-Bheenick et al, 2023), ownership structure (Rees & Rodionova, 2015), corporate governance (Lagasio & Cucari, 2019;Zhang, Pan, et al, 2023), and organizational capabilities (Fang et al, 2023;Liang & Li, 2023;Yang & Han, 2023) have impacts on corporate ESG performance. In this regard, considerable literature focuses on the role of corporate governance in corporate sustainability (Aguilera et al, 2021;Campanella et al, 2021;Kavadis & Thomsen, 2023;Scherer & Voegtlin, 2020). In particular, as the board of directors is the core of corporate governance, such literature reveals how the board size (Zubeltzu-Jaka et al, 2020), diversity (Cambrea et al, 2023;Cucari et al, 2018;Wasiuzzaman & Subramaniam, 2023), and independence (García-Sánchez & Martínez-Ferrero, 2017) affect corporate ESG performance.…”

Section: Esg Practices In Chinamentioning

confidence: 99%

Striving for sustainable development: Green financial policy, institutional investors, and corporate ESG performance

Lei,

2023

Corp Soc Responsibility Env

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Environmental, social, and governance (ESG) practices play an increasingly important role in achieving sustainable development goals. Drawing on institutional theory, this paper empirically explores whether and how green financial policy affects corporate ESG performance. Taking China's pilot policy for green finance reform and innovation (GFP) as a quasi‐natural experiment, we employ the difference‐in‐differences model to investigate the causal relationship between green financial policy and corporate ESG performance. We find that the GFP significantly improves corporate ESG performance. The results are robust to a series of checks such as parallel trend examination, placebo test, mitigation of omitted variable bias, alternative variables, and the exclusion of contemporaneous policies. The heterogeneity analysis shows that the positive impact of GFP on corporate ESG performance is more pronounced for firms with tighter financial constraints, higher agency costs, and more external pressures. On this basis, we further document that the positive impact of GFP on corporate ESG performance is more pronounced for investee firms with more institutional ownership. The above findings indicate that the formal institution of government‐led green financial policy can positively affect corporate ESG performance, and market participants‐institutional investors help to strengthen this policy effect. Overall, our study sheds light on the significant role of green financial policy in promoting corporate sustainability.

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Sustainable corporate governance: A review of research on long‐term corporate ownership and sustainability

Cited by 24 publications

References 334 publications

Ownership and corporate governance across institutional contexts

Ownership and corporate governance across institutional contexts

Examine the level of environmental, social and governance disclosure in sustainability report – a study of the Indian banking sector

Striving for sustainable development: Green financial policy, institutional investors, and corporate ESG performance

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