The internalisation of the circular economy and ESG in Brazilian B Corps from the perspective of the Stakeholder Theory

Amidst the growing emphasis on sustainable development, there is an emerging trend of companies actively pursuing the transition towards sustainability. This shift is driven by various factors, including heightened societal scrutiny and a greater focus on environmental, social, and governance (ESG) considerations. As a result, companies are increasingly acknowledging the significance of incorporating sustainable practices into their operations to align with the expectations of the capital market. This paper investigates the association between ESG disclosures and stock price crash moderated by corporate governance (board size, independence, and gender diversity) for Saudi firms. Using a fixed effects regression method, we find that the coefficient of ESG is significant and negative (−0.0043 for NCSKEW and − 0.0006 for DUVOL) indicating a positive influence of ESG in diminishing stock price crash. The results also show that corporate governance positively and significantly moderate the ESG‐stock price crash risk. As additional analyses, we find a significant negative relationship between each aspect of ESG including social responsibility, environmental activities and governance practices and stock price crash risk. Moreover, the pandemic COVID‐19 has a dampening effect on the ESG‐stock price crash association. To ensure the validity of these conclusions, dynamic GMM models were employed to tackle any potential endogeneity issues, making the results even more robust. Our findings highlight that improving corporate sustainability positively impacts the stability of companies' stock prices. This study provides valuable insights and perspectives from the context of Saudi Arabia and offers theoretical and managerial implications that are relevant for policymakers and investors.

Section: Esg As a Buffer Against Crash Risk Of Stock Pricementioning

confidence: 99%

Examining the interplay of sustainable development, corporate governance, and stock Price crash risk: Insights from ESG practices

Chebbi

2023

Is economic growth in East Asia pacific and South Asia ESG factors based and aligned growth?

Işık,

Ongan,

Islam

et al. 2024

Asia–Pacific countries are experiencing rapid economic growth. Is this growth ESG (Environmental, Social, and Governance) factors‐based and aligned growth? Therefore, this study investigates the connections between ESG indicators and economic growth in East Asia Pacific and South Asia. To achieve this aim, we employed the FMOLS, DOLS, and AMG models. While the AMG model highlights significant long‐term positive effects of the environmental (EFs) and governance factors (GOVNF) on economic growth, the FMOLS and DOLS models emphasize the substantial influence of social factors (SOC) on economic growth. These findings underscore the multifaceted nature of ESG factors and offer valuable insights for policymakers aiming to align strategies with the sustainable development goals (SDGs). Notably, the GOVNF, with components like control of corruption, regulatory quality, rule of law, and government effectiveness, does not influence the GDP of developed nations, such as Japan, New Zealand, and Australia. However, its significance is evident in countries like Afghanistan and Sri Lanka. This result might stem from the possibility that developed countries have historically addressed and resolved issues like corruption and the rule of law, while these elements remain crucial determinants for the economic growth of developing nations like Afghanistan and Sri Lanka. Empirical findings provide the region's policymakers with essential insights and a guide for implementing their economic growth policies ESG factor‐based and aligned to the United Nations' SDGs. These targets will make the economic growth of the region's countries sustainable.

Navigating sustainability: Unveiling the interconnected dynamics of ESG factors and SDGs in BRICS‐11

Işık,

Ongan,

Islam

et al. 2024

In this study, we investigate the impacts of ESG (environmental, social, and governance) factors on sustainable development goals (SDGs) for BRICS‐11 countries. The AMG, FMOLS, DOLS, and ARDL models are applied. While we found negative impacts of environmental factors (ENVf) on SDGs for Argentina, Ethiopia, and China, we found positive impacts of social factors (SOCf) on SDGs for South Africa and Argentina. Additionally, while we found positive impacts of governance factors (GOVNf) on SDGs for Ethiopia, Iran, and Saudi Arabia, we found negative impacts for the United Arab Emirates. No significant relationships were found between ENVf, SOCf, and GOVNf on SDGs for Brazil, Russia, India, and Egypt. These findings highlight the nuanced impacts of ESG factors on SDGs, providing valuable insights for policymakers and emphasizing the need for country‐specific sustainable development strategies. The negative environmental impact on SDGs in Argentina, Ethiopia, and China suggests that environmental degradation may hinder sustainable development, underscoring the importance of balancing economic growth and environmental sustainability. This result can also be interpreted through the Pollution Haven Hypothesis, which posits that developing countries may attract more foreign investments in pollution‐intensive industries due to their less stringent environmental regulations.