Corporate Digital Responsibility: A Board of Directors May Encourage the Environmentally Responsible Use of Digital Technology and Data: Empirical Evidence from Italian Publicly Listed Companies
Abstract
:1. Introduction
2. Framework and Hypothesis
- Conservation of resources in the use and creation of digital services and products;
- Social compatibility and the possibility of creating a “human” work environment in the use of digital technology;
- The “democratisation of digitalisation”: assisting access by developing individuals’ competence and promoting a generally accessible digital infrastructure;
- Data security and prevention of the abuse of digital power due to acquired “data power”.
2.1. Monitoring and Strategic Functions of the Board
2.2. The Role of ERP Technologies and the Perspective of the CDR
3. Method
3.1. Sample Selection
3.2. Dependent Variables
3.3. Independent Variables
3.4. Control Variables
- Firm size. Calculated as the natural log of total assets. Clarkson et al. hypothesised that larger firms would have a greater propensity to prioritise the effective management of environmental issues [71];
- Firm age. Calculated as the number of years from the foundation of the firm up until the last fiscal year for which we have data. According to Berrone et al., older firms will quite possibly have sunk costs in the shape of more primitive, older, and more polluting plants and equipment, which they will, therefore, find expedient to continue using [68];
- Financial performance. Evaluated by referring to returns on assets (ROA). McKendall et al. suggest that firms that are profitable will probably have a better green performance because of their ability to deal with the high costs of certain green strategies [15];
- Leverage. Calculated as total debt divided by total assets. Those firms which enjoy higher leverage tend to perform better environmentally [71];
- Polluting industry. The way a firm performs environmentally may be influenced by the industrial sector to which it belongs [68]. In particular, firms in environmentally sensitive industries are likely to manage their environmental impacts more effectively [65,66,67]. A dummy variable is used to control whether a firm belongs to those sectors which are considered to have a great impact on the environment: Electricity, Gas, and Waste Water (SIC codes 4900–4999), Iron and Steel Manufacturing (Iron and Steel Manufacturing SIC codes 3300–3399), Chemicals, Pharmaceutical, and Plastics Manufacturing (SIC codes 2800–3099), Paper and Pulp Mills (SIC codes 2600–2699), Coal Mining and Oil and Gas Exploration (SIC codes 1200–1399), Metal Mining (SIC codes 1000–1099), and Forestry (SIC codes 800-899). Therefore, this variable has a value of “1” whenever the firm belongs to one or another of the above-listed sectors and a value of “0” otherwise.
4. Results
Robustness Checks
5. Discussion and Conclusions
- Support Hypothesis 1, meaning that firms that increase the independence of their boards present a better environmental performance;
- Do not support Hypothesis 2, meaning no direct and positive relationship exists between the use of ERP systems and the firm’s green performance;
- Support Hypothesis 3, according to which the growing use of ERP systems is only linked to an improvement in environmental performance in those firms where the presence of independent directors on the board is also growing. This improvement in environmental performance is in addition to the impact brought about by the board’s greater independence (considered alone as in for the verification of Hypothesis 1).
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Means | Standard Deviations | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 | |
---|---|---|---|---|---|---|---|---|---|---|
| −14.001 | 21.009 | 1 | |||||||
| 0.503 | 0.104 | 1 | 0.178 ** | ||||||
| 0.2154 | 0.2971 | 1 | 0.112 | 0.091 | |||||
| 19.998 | 5.303 | 1 | 0.121 * | 0.063 | 0.159 ** | ||||
| 63.167 | 29.171 | 1 | 0.183 ** | 0.109 | 0.393 ** | −0.061 | |||
| 6.113 | 7.131 | 1 | 0.129 * | 0.129 * | 0.099 | 0.031 | 0.023 | ||
| 3.974 | 9.982 | 1 | 0.171 ** | −0.009 | −0.031 | 0.081 | −0.029 | 0.047 | |
| 0.557 | 0.156 | 1 | −0.183 ** | −0.165 ** | 0.041 | 0.183 ** | 0.043 | 0.081 | 0.131 * |
| 0.698 | 0.454 | −0.159** | −0.055 | −0.035 | 0.179 ** | 0.145 * | 0.057 | 0.171 ** | −0.601 ** |
Model A | Model B | Model C | ||||
---|---|---|---|---|---|---|
Variable | Parameter Estimate | p Value | Parameter Estimate | p Value | Parameter Estimate | p Value |
Intercept | −39.3 | 0.21 | −31.1 | 0.04 * | −32.5 | 0.02 * |
Controls | ||||||
Firm size | 0.15 | 0.002 ** | 0.09 | 0.001 ** | 0.08 | 0.021 * |
Firm age | −0.07 | 0.031 * | 0.08 | 0.029 * | 0.09 | 0.033 * |
Financial performance | 0.05 | 0.049 * | 0.04 | 0.035 * | 0.01 | 0.009 ** |
Tobin’s Q | 0.13 | 0.171 | 0.43 | 0.231 | 0.22 | 0.319 |
Leverage | 0.74 | 0.217 | 0.65 | 0.094 † | 0.70 | 0.047 † |
Polluting industry | −1.19 | 0.009 ** | −1.23 | 0.004 ** | -0.92 | 0.002 ** |
Main effect | ||||||
Board independence | 1.23 | 0.008 ** | 0.829 | 0.004 ** | ||
ERP spending | 0.961 | 0.239 | 3.641 | 0.549 | ||
Interaction | ||||||
Board independence x erp spending | 0.141 | 0.009 ** | ||||
ANOVA | ||||||
F sign | 7.921 ** | 6.573 ** | 6.723 ** | |||
R2 | 0.156 | 0.170 | 0.192 | |||
Adj R2 | 0.136 | 0.144 | 0.163 | |||
ΔR2 | 0.156 | 0.015 | 0.021 | |||
F change | 7921 ** | 3415 ** | 4211 ** |
Model A | Model B | Model C | |
---|---|---|---|
F-statistic | 3.344 | 3.001 | 2.991 |
Prob. F | 0.003 | 0.003 | 0.002 |
N*R-squared | 18.550 | 21.995 | 24.115 |
Prob. Chi-Square | 0.005 | 0.005 | 0.004 |
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Napoli, F. Corporate Digital Responsibility: A Board of Directors May Encourage the Environmentally Responsible Use of Digital Technology and Data: Empirical Evidence from Italian Publicly Listed Companies. Sustainability 2023, 15, 2539. https://doi.org/10.3390/su15032539
Napoli F. Corporate Digital Responsibility: A Board of Directors May Encourage the Environmentally Responsible Use of Digital Technology and Data: Empirical Evidence from Italian Publicly Listed Companies. Sustainability. 2023; 15(3):2539. https://doi.org/10.3390/su15032539
Chicago/Turabian StyleNapoli, Francesco. 2023. "Corporate Digital Responsibility: A Board of Directors May Encourage the Environmentally Responsible Use of Digital Technology and Data: Empirical Evidence from Italian Publicly Listed Companies" Sustainability 15, no. 3: 2539. https://doi.org/10.3390/su15032539