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29 pages, 371 KB

Open AccessArticle

ESG Performance and the Phase-Dependent Resilience of Outward Foreign Direct Investment: Evidence from Chinese Multinationals

by Le Chang, Yaqing Su and Jing Li

Sustainability 2026, 18(7), 3407; https://doi.org/10.3390/su18073407 - 1 Apr 2026

Viewed by 391

Abstract

Chinese multinational enterprises, as the most active emerging-market investors, face mounting challenges in sustaining outward foreign direct investment (OFDI) under increasingly volatile global environments, yet how ESG performance shapes firms’ capacity to withstand and recover from external shocks remains poorly understood. This study [...] Read more.

Chinese multinational enterprises, as the most active emerging-market investors, face mounting challenges in sustaining outward foreign direct investment (OFDI) under increasingly volatile global environments, yet how ESG performance shapes firms’ capacity to withstand and recover from external shocks remains poorly understood. This study investigates whether and how ESG performance enhances the OFDI resilience of Chinese multinational enterprises across the resistance phase and the recovery phase. We hypothesize that ESG performance enhances OFDI resilience through phase-specific mechanisms: in the resistance phase, ESG functions as a static resource buffer grounded in the resource-based view, while in the recovery phase, it operates as a dynamic reconfiguration mechanism consistent with the dynamic capabilities view. Using a panel dataset of 19,691 firm-year observations from Chinese A-share listed firms spanning 2008 to 2024, we employ a fixed-effects panel model to test these hypotheses. The results show that ESG performance significantly enhances OFDI resilience in both phases, and this conclusion holds after robustness and endogeneity tests. Mechanism analysis reveals that green innovation mediates the effect in both the resistance and recovery phases, while supply chain resilience and investment efficiency serve as additional mediating channels exclusively in the resistance phase. By introducing a phase-dependent perspective and highlighting ESG’s distinct roles across shock stages, this study provides practical guidance for emerging-market multinational enterprises on how to leverage ESG performance to build sustainable OFDI resilience in volatile global environments. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

21 pages, 471 KB

Open AccessArticle

Evaluating the Role of ESG Pillars in Sustainable Growth and Firm Performance: Panel Evidence from GCC Countries

by Nouf Ben Dahmash, Jawaher Binsuwadan, Lamya Alotaibi and Hawazen Almugren

Sustainability 2026, 18(5), 2475; https://doi.org/10.3390/su18052475 - 3 Mar 2026

Viewed by 688

Abstract

Corporate governance serves as the institutional foundation that aligns managerial decisions with stakeholder interests and sustainable growth. It provides the accountability mechanisms necessary for translating environmental and social initiatives into measurable firm value. This paper examines how Environmental, Social, and Governance (ESG) pillars [...] Read more.

Corporate governance serves as the institutional foundation that aligns managerial decisions with stakeholder interests and sustainable growth. It provides the accountability mechanisms necessary for translating environmental and social initiatives into measurable firm value. This paper examines how Environmental, Social, and Governance (ESG) pillars individually influence firm performance in Gulf Cooperation Council countries (GCCs). The paper analyses a balance panel dataset comprising 84 listed firms observed over a five-year period from 2019 to 2023 with 392 observations. The paper employs two-way fixed effects with Driscoll–Kraay robust standard errors to ensure consistent inference by correcting for heteroskedasticity, autocorrelation, and cross-sectional dependence. Firm performance is assessed by Tobin’s Q, return on assets (ROAs), and sustainable growth rate (SGR), reflecting market valuation, accounting profitability, and long-term sustainable growth, respectively. Tobin’s Q results show that GCC firms’ performance is enhanced by higher environmental pillar scores, whereas it responds negatively to increases in social and governance scores. Findings remain qualitatively similar for ROA but of a smaller magnitude. These findings challenge the conventional assumption that ESG dimensions uniformly enhance firm value, revealing instead that governance and social investments may impose agency costs or compliance burdens in emerging markets where institutional frameworks and stakeholder expectations differ fundamentally from developed economies. The environmental pillar exhibits a positive and significant association with firms’ long-term sustainable growth, whereas the social pillar exerts an adverse effect. Conversely, assessing firm performance with SGR reveals that the influence of the governance pillar is statistically insignificant. Theoretically, this paper contributes by demonstrating that ESG pillars operate through differentiated value-creation mechanisms in institutional contexts characterised by weak stakeholder activism and nascent ESG disclosure norms. Findings suggest GCC firms should prioritise environmental initiatives while carefully evaluating costs and benefits of governance and social programmes. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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16 pages, 1329 KB

Open AccessArticle

Towards Collaborative Practice: From Aberdeen to Aber-Net

by Cecilia Zecca and Richard Laing

Sustainability 2026, 18(4), 2097; https://doi.org/10.3390/su18042097 - 19 Feb 2026

Viewed by 397

Abstract

This study investigated how collaboration between academia and local authorities creates sustainable frameworks for addressing urban challenges through environmental, social and governance (ESG) principles, benefiting both education and the long-term resilience of cities. The paper discusses how establishing dialogue and setting common aims [...] Read more.

This study investigated how collaboration between academia and local authorities creates sustainable frameworks for addressing urban challenges through environmental, social and governance (ESG) principles, benefiting both education and the long-term resilience of cities. The paper discusses how establishing dialogue and setting common aims between educational institutions and local authorities, by adopting Participatory Action Research (PAR) approach, enables architecture schools to address civic responsibilities while advancing ESG goals in urban development. The collaboration addresses environmental sustainability through circular economy principles, promotes social inclusion through community engagement, and establishes transparent governance through institutional partnerships. This collaborative model was developed through three summer workshops in Aberdeen, delivered before the pandemic, which helped bridge the gap between theory (academic and educational hypotheses) and practice (tangible urban challenges facing public organisations). This unique experience, named Aber-net (reiterating the intention of creating a network of collaborations), demonstrated how merging research, professional expertise and educational frameworks can create ESG-driven partnerships that support responsible urban development, a model currently underrepresented in the UK. In conclusion, the paper discusses how these collaborative activities improved the perception of public spaces in Aberdeen while establishing a replicable ESG-aligned framework for sustainable partnerships. It examines the challenges and opportunities of creating academia-practice networks that embed ESG principles into urban development. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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32 pages, 605 KB

Open AccessArticle

Corporate Environmental Attention and Corporate Greenwashing Behavior: Firm-Level Evidence from China

by Xunfa Lu, Bingxian Song and Xin Zhang

Sustainability 2026, 18(4), 2059; https://doi.org/10.3390/su18042059 - 18 Feb 2026

Viewed by 711

Abstract

To analyze the effect of corporate environmental attention on corporate greenwashing behavior and its underlying mechanisms, this study conducts an empirical investigation using data from Chinese A-share listed firms spanning from 2012 to 2022. The findings reveal that heightened corporate environmental attention significantly [...] Read more.

To analyze the effect of corporate environmental attention on corporate greenwashing behavior and its underlying mechanisms, this study conducts an empirical investigation using data from Chinese A-share listed firms spanning from 2012 to 2022. The findings reveal that heightened corporate environmental attention significantly curbs corporate greenwashing behavior. Particularly, this effect is more evident in firms with violations, non-heavy pollution firms, or non-high-tech firms. Mechanistic tests highlight that, from the perspective of internal corporate channels, heightened corporate environmental attention primarily suppresses greenwashing behavior by promoting green innovation and reducing information asymmetry. From the perspective of external corporate channels, it mainly curbs greenwashing behavior by increasing scrutiny from investors and the media. Additionally, the degree of corporate violations functions as an enhancing moderator between corporate environmental attention and corporate greenwashing behavior. Based on the findings obtained, this paper makes specific recommendations for business managers and policymakers. It also provides a theoretical reference for firms aiming to achieve high-quality green transformation and enhance green governance. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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40 pages, 2118 KB

Open AccessArticle

ESG-Driven Traceability Adoption: An Impact Thinking Multi-Dimensional Framework for the Fashion and Textile Industry

by María Tamames-Sobrino, David Antonio Rosas and Jaime Gisbert-Payá

Sustainability 2026, 18(2), 1089; https://doi.org/10.3390/su18021089 - 21 Jan 2026

Viewed by 1158

Abstract

This study introduces an Impact Thinking Approach (ITA) as a strategic framework to strengthen traceability implementation in the fashion and textile industry. The research examines how ESG impact dimensions shape sustainable strategy definition and how traceability can act as a strategic enabler rather [...] Read more.

This study introduces an Impact Thinking Approach (ITA) as a strategic framework to strengthen traceability implementation in the fashion and textile industry. The research examines how ESG impact dimensions shape sustainable strategy definition and how traceability can act as a strategic enabler rather than a mere compliance tool. A mixed-method design combining a narrative literature review, content analysis of 69 sustainability sources, and a two-round Delphi study with 19 experts was employed to identify, evaluate, and prioritize impact drivers related to traceability adoption. The resulting ITA framework connects regulatory requirements, impact materiality, and traceability demands into a unified structure that clarifies the strategic relevance of environmental, social, and governance dimensions. Findings reveal that governance-related factors—particularly data transparency, stakeholder engagement, innovation capacity, and cross-sector partnerships—are the strongest enablers for activating effective traceability schemes. The framework provides practitioners with structured guidance for integrating traceability into sustainable business strategies and for developing impact-aligned KPIs and decision-making mechanisms. The study contributes theoretical insights into the ESG–traceability nexus and offers a practical model to support regulatory alignment, organizational readiness, and long-term strategic planning. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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18 pages, 827 KB

Open AccessArticle

Patient Capital and ESG Performance in the Pharmaceutical Sector: A Pathway to Sustainable Development

by Yanan Zhu, Yongfei Liu and Yuwen Chen

Sustainability 2026, 18(2), 709; https://doi.org/10.3390/su18020709 - 10 Jan 2026

Viewed by 1313

Abstract

As global sustainable development progresses and the United Nations Sustainable Development Goals (SDGs) gain increasing prominence, pharmaceutical manufacturing firms face mounting challenges in implementing environmental, social, and governance (ESG) practices; these include high environmental compliance costs, limited drug accessibility, and governance inefficiencies. Patient [...] Read more.

As global sustainable development progresses and the United Nations Sustainable Development Goals (SDGs) gain increasing prominence, pharmaceutical manufacturing firms face mounting challenges in implementing environmental, social, and governance (ESG) practices; these include high environmental compliance costs, limited drug accessibility, and governance inefficiencies. Patient capital, characterized by long investment horizons and high tolerance for risk, is well aligned with the long-term nature of ESG-oriented activities in this industry. Using a sample of pharmaceutical manufacturing companies listed on the Shanghai and Shenzhen A-share markets from 2015 to 2024, this study systematically examines the impact of patient capital on corporate ESG performance and explores the underlying mechanisms. The empirical results show that patient capital significantly improves ESG performance among pharmaceutical manufacturing firms. These findings remain robust across a series of robustness checks, including alternative variable measurements, sample adjustments, propensity score matching, instrumental variable estimation, and changes in the sample period. Further analysis reveals that patient capital enhances ESG performance through two primary channels: alleviating financing constraints and increasing R&D investment intensity. By focusing on the pharmaceutical manufacturing industry, this study extends the literature on patient capital to a highly regulated and socially sensitive sector, providing empirical evidence on how long-term, value-oriented capital can support sustainable development and improve ESG performance in industries with strong public welfare attributes. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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23 pages, 668 KB

Open AccessArticle

Beyond the Ivory Tower: How Dutch Universities Convert Missions into ESG Performance

by Amir Ghorbani and Marie Louise Blankesteijn

Sustainability 2026, 18(2), 624; https://doi.org/10.3390/su18020624 - 7 Jan 2026

Cited by 1 | Viewed by 640

Abstract

Higher education institutions are increasingly expected to excel in environmental, social, and governance (ESG) performance, but questions remain about how a university’s core missions contribute to its ESG outcomes. This study investigates the relationships between the missions of universities—education, research, and entrepreneurship—and their [...] Read more.

Higher education institutions are increasingly expected to excel in environmental, social, and governance (ESG) performance, but questions remain about how a university’s core missions contribute to its ESG outcomes. This study investigates the relationships between the missions of universities—education, research, and entrepreneurship—and their ESG performance, focusing on environmental and social dimensions. We utilize data from 12 research-intensive Dutch universities from 2023 to 2025, drawing on QS World University Rankings (WUR) indicators, the QS Sustainability Rankings, and Times Higher Education (THE) metrics. A partial least squares structural equation modeling (PLS-SEM) approach is employed with formative constructs for each mission and outcome. The results reveal that the entrepreneurship mission (knowledge exchange and industry income) has a strong positive influence on both environmental and social performance, while the research mission significantly boosts social performance. The education mission shows no significant direct effect on either outcome in our model. The findings underscore the critical role of the third mission in driving university ESG performance and suggest that research excellence translates to social impact when aligned with societal needs. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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22 pages, 1075 KB

Open AccessArticle

Long-Term Effect of Environmental, Social, and Governance (ESG) Corporate Practices on Corporate Stock Performance

by Svetlin Minev, Petya Dankova and Tjaša Štrukelj

Sustainability 2025, 17(24), 11321; https://doi.org/10.3390/su172411321 - 17 Dec 2025

Cited by 1 | Viewed by 2980

Abstract

In the context of the growing prominence of socially responsible investment, the debate over whether sustainable corporate practices translate into sustained shareholder value has intensified. As a key tool for aligning their investment portfolios with responsible/sustainable corporate practices, investors rely on listed companies’ [...] Read more.

In the context of the growing prominence of socially responsible investment, the debate over whether sustainable corporate practices translate into sustained shareholder value has intensified. As a key tool for aligning their investment portfolios with responsible/sustainable corporate practices, investors rely on listed companies’ Environmental, Social, and Governance (ESG) ratings. This study aims to investigate the long-term impact of ESG practices on the stock performance of listed companies. We perform a Q1 2000–Q1 2025 backtest to analyse the comparative performance of a Best-in-Class ESG portfolio, constructed by the top 30 listed companies with market capitalisations above USD 2 billion ranked by Morningstar Sustainalytics’ ESG Risk Ratings as of 31 March 2025 against the S&P 500 Total Return index. We found that ESG leaders exhibited superior risk-adjusted performance, outperforming the S&P 500 Total Return Index. The BiC portfolios achieved a substantially higher CAGR and Sharpe ratio, while maintaining maximum drawdowns that remained comparable to the benchmark S&P 500 Total Return index. We also found that ESG advantages were more pronounced in market downturns, with the Best-in-Class ESG portfolio showing better CAGR and Sortino ratios. The findings of this study demonstrate that responsible governance and management create benefits for all stakeholders, including investors, society and nature, in the broadest sense of these terms. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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31 pages, 1331 KB

Open AccessArticle

From Control to Incentive: How Market-Driven Environmental Regulation Shapes ESG Performance in Manufacturing Industries

by Wei Zhang and Shen Zhong

Sustainability 2025, 17(23), 10516; https://doi.org/10.3390/su172310516 - 24 Nov 2025

Viewed by 1262

Abstract

Market-based environmental regulation plays a crucial role in aligning industrial development with sustainability goals. Taking the implementation of China’s Environmental Protection Tax (EPT) in 2018 as a quasi-natural experiment, this study employs a difference-in-differences framework using an unbalanced panel of 2677 manufacturing firms [...] Read more.

Market-based environmental regulation plays a crucial role in aligning industrial development with sustainability goals. Taking the implementation of China’s Environmental Protection Tax (EPT) in 2018 as a quasi-natural experiment, this study employs a difference-in-differences framework using an unbalanced panel of 2677 manufacturing firms from 2010 to 2022 to identify the causal effect of the EPT on corporate ESG performance (MFESG). The findings reveal that the implementation of market-based environmental regulation significantly elevates the ESG performance of manufacturing firms. This positive influence is realized not only directly but also indirectly through improved financing accessibility and innovation capacity. Moreover, the enhancement effect is uneven across firms: non-state-owned enterprises, firms unaudited by the Big Four, and those situated in China’s eastern regions exhibit stronger ESG responses. Across the three ESG pillars, the environmental and social dimensions benefit most from the EPT, suggesting that market mechanisms can be effective catalysts for sustainable industrial upgrading. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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34 pages, 4506 KB

Open AccessArticle

Event-Time Effects of R&D Intensity and Green Financing Complementarities on Capital Costs, Valuation, and Green Innovation in S&P 500 Firms

by Mohammed Naif Alshareef

Sustainability 2025, 17(22), 10424; https://doi.org/10.3390/su172210424 - 20 Nov 2025

Cited by 1 | Viewed by 4316

Abstract

This study tests whether labeled green and sustainability-linked financing complements firms’ R&D to lower the weighted average cost of capital (WACC), raise valuation, and shift innovation toward climate mitigation technologies. Using a 2012–2024 panel of S&P 500 constituents with complete coverage, this study [...] Read more.

This study tests whether labeled green and sustainability-linked financing complements firms’ R&D to lower the weighted average cost of capital (WACC), raise valuation, and shift innovation toward climate mitigation technologies. Using a 2012–2024 panel of S&P 500 constituents with complete coverage, this study applies a staggered-adoption difference-in-differences design with interaction-weighted event-time estimators and entropy balancing; WACC is decomposed into equity and debt components, valuation is measured by Tobin’s Q, and innovation outcomes cover patent counts and the CPC Y02 share, with matched-bond and secondary-market comparisons for the debt channel. Within two years of first-time adoption, this study observes a meaningful decline in WACC (approximately 40–60 bp) driven mainly by the cost of debt, alongside higher valuation and increased innovation intensity with a larger Y02 share. Effects are larger where R&D intensity is higher and are strongest for use-of-proceeds green bonds and for sustainability-linked contracts with material KPIs and non-trivial step-ups. These results indicate that labeled financing is most effective when aligned with credible R&D pipelines and verification mechanisms, clarifying its governance role in corporate sustainability strategies. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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18 pages, 474 KB

Open AccessArticle

The Impact of Environmental Protection Tax on Green Behaviors and ESG Performance of Industrial Enterprises

by Xuejia Zheng and Lei Zhuang

Sustainability 2025, 17(19), 8592; https://doi.org/10.3390/su17198592 - 24 Sep 2025

Cited by 2 | Viewed by 1366

Abstract

Environmental protection tax is levied based on various types of emitted pollutants and has a significant impact on the green behaviors and ESG (environmental, social, and corporate governance) performance of enterprises. This article explores the green effect and the impact of environmental protection [...] Read more.

Environmental protection tax is levied based on various types of emitted pollutants and has a significant impact on the green behaviors and ESG (environmental, social, and corporate governance) performance of enterprises. This article explores the green effect and the impact of environmental protection tax on the green behavior of listed companies with in-depth empirical analysis based on the data of industrial enterprises listed on the A-shares from 2018 to 2022 in China. Research has found that the implementation of environmental protection tax has played a significant driving role in improving the overall performance level of corporate ESG, and this tax system has formed a driving force mechanism for enterprises to increase investment in green innovation and effectively improve their comprehensive ESG performance. Green innovation plays a significant intermediary role between environmental protection tax and corporate ESG performance. It is suggested that regions should adjust the applicable amount of environmental protection tax, increase green innovation, and standardize pollution control and emission reduction regulations. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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25 pages, 2173 KB

Open AccessArticle

Tracing the Shifting Materiality of ESG Issues: Insights from Media Attention

by Farah Sraj and Eduardo Schiehll

Sustainability 2025, 17(16), 7469; https://doi.org/10.3390/su17167469 - 18 Aug 2025

Viewed by 2216

Abstract

We analyze ESG-related news coverage to examine media attention patterns as a reflection of stakeholders’ perceived salience of ESG issues at both the industry and firm levels, offering insights into the evolving nature of ESG materiality. Using longitudinal data visualization over an 11-year [...] Read more.

We analyze ESG-related news coverage to examine media attention patterns as a reflection of stakeholders’ perceived salience of ESG issues at both the industry and firm levels, offering insights into the evolving nature of ESG materiality. Using longitudinal data visualization over an 11-year period, we show that media attention to ESG issues varies significantly over time and across firms within the same industry. While some issues receive consistent attention, others exhibit shifting patterns, signaling changing stakeholders’ perceived salience. Focusing on SASB-informed financially material ESG issues, we also show that perceived salience varies even among high-relevance topics. Some firms align with their industry’s patterns, while others diverge markedly, reinforcing the view that ESG materiality is both dynamic and firm-specific. These insights suggest that static ESG materiality assessment frameworks may be insufficient for informing long-term sustainability strategies or corporate disclosure practices. For investors, our results underscore the value of media-based ESG signals in complementing traditional materiality assessments. Acknowledging the evolving nature of ESG materiality is essential for firms and investors aiming to develop ESG strategies that respond to shifts in stakeholders’ perceived salience of ESG issues. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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18 pages, 474 KB

Open AccessArticle

Investigating the Impact of Corporate Environmental Sustainability Motivations on Environmental Management Practices

by Ismail Ataher Ab Albakoush and Askin Kiraz

Sustainability 2025, 17(16), 7436; https://doi.org/10.3390/su17167436 - 17 Aug 2025

Cited by 1 | Viewed by 1968

Abstract

The role of organizational factors in fostering and enhancing environmental sustainability has become increasingly critical due to the growing trends and concerns of environmental degradation. Developing nations have been reported to be significantly challenged with regard to adequate environmental management. As a developing [...] Read more.

The role of organizational factors in fostering and enhancing environmental sustainability has become increasingly critical due to the growing trends and concerns of environmental degradation. Developing nations have been reported to be significantly challenged with regard to adequate environmental management. As a developing nation, Libya is environmentally vulnerable in terms of both its geographical characteristics as a country in a semi-arid region and its resource-dependent economy. This research investigates the interplay among corporate environmental motivations, perceptions of corporate environmental management practices, pro-environmental attitudes, and pro-environmental behaviors among the employees of Libya’s oil sector. Libya provides a relevant context for investigating the impact of socioeconomic and corporate institutional dynamics on environmental engagement within industrial organizations. This research explores individual-level factors and how they interact with the practices of corporate environmental sustainability in a corporate sector characterized by significant and critical ecological impact. This study analyzed employee responses across multiple oil companies operating in Libya. This study sheds light on the extent to which the impacts of corporate sustainability motivations and workplace contexts shape the perceptions and behaviors of employees towards environmental sustainability. The findings of this research underscore the interconnectedness of organizational and personal dimensions of environmental sustainability, with further impacts policy and practices of environmental sustainability in similar contexts. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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23 pages, 430 KB

Open AccessArticle

A Proposed Typology for the Validation of Corporate Sustainability

by Joan R. Sanchis, Vanessa Campos and Ana T. Ejarque

Sustainability 2025, 17(16), 7358; https://doi.org/10.3390/su17167358 - 14 Aug 2025

Viewed by 3340

Abstract

Corporate sustainability is a multi-stakeholder approach with a Triple or Quadruple Bottom Line focused on long-term horizons and the creation of shared or triple value. The objective of this study is to present a theoretical framework for the implementation and measurement of corporate [...] Read more.

Corporate sustainability is a multi-stakeholder approach with a Triple or Quadruple Bottom Line focused on long-term horizons and the creation of shared or triple value. The objective of this study is to present a theoretical framework for the implementation and measurement of corporate sustainability within companies and to propose a set of measurement scales for assessing levels of sustainability implementation. This study offers a novel conceptual model that enables the systematic classification and benchmarking of sustainability maturity levels in companies. The methodology involves a literature review and the application of the Dyllick–Muff matrix (2016), which identifies three distinct levels of sustainability: Sustainability 1.0, Sustainability 2.0, and Sustainability 3.0. This framework uses three dimensions: objectives (the “what”), value creation (the “why”), and organizational perspective (the “how”). The study highlights the scarcity of research on the practical implementation of sustainability. Furthermore, there is no widely adopted framework for measuring sustainability implementation. The diversity and fragmentation of existing sustainability measurement models make comparative analysis particularly challenging. This study concludes that the Dyllick–Muff matrix is a suitable tool for determining a company’s level of sustainability and for conducting comparative analyses across organizations. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

13 pages, 235 KB

Open AccessArticle

The Influence of Institutional Pressures on Environmental, Social, and Governance Responsibility Fulfillment: Insights from Chinese Listed Firms

by Haoming Ding and Zerui Wang

Sustainability 2025, 17(9), 3982; https://doi.org/10.3390/su17093982 - 28 Apr 2025

Cited by 25 | Viewed by 8180

Abstract

Grounded in institutional theory, this study uses a sample of A-share listed companies from 2009 to 2023 to empirically examine the effects of coercive, mimetic, and normative pressures on corporate ESG responsibility. The results indicate that coercive and mimetic pressures significantly promote ESG [...] Read more.

Grounded in institutional theory, this study uses a sample of A-share listed companies from 2009 to 2023 to empirically examine the effects of coercive, mimetic, and normative pressures on corporate ESG responsibility. The results indicate that coercive and mimetic pressures significantly promote ESG responsibility fulfilment, while normative pressures have a negative impact. This research expands the application of institutional theory to ESG practices, offering valuable insights for policymakers, regulators, and corporate managers. By strengthening supervision, promoting industry best practices, and fostering social responsibility awareness, corporate ESG fulfilment can be further advanced, driving sustainable development. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

21 pages, 1054 KB

Open AccessArticle

Carbon Border Adjustment Mechanism as a Catalyst for Greenfield Investment: Evidence from Chinese Listed Firms Using a Difference-in-Differences Model

by Jiayi Liu, Weidong Wang, Tengfei Jiang, Huirong Ben and Jie Dai

Sustainability 2025, 17(8), 3492; https://doi.org/10.3390/su17083492 - 14 Apr 2025

Cited by 3 | Viewed by 4235

Abstract

Research on the EU’s Carbon Border Adjustment Mechanism (CBAM) has predominantly examined its implications for climate governance and export trade yet overlooked how enterprises adapt their foreign investment strategies. Using panel data from Chinese listed companies between 2011 and 2022, this study employs [...] Read more.

Research on the EU’s Carbon Border Adjustment Mechanism (CBAM) has predominantly examined its implications for climate governance and export trade yet overlooked how enterprises adapt their foreign investment strategies. Using panel data from Chinese listed companies between 2011 and 2022, this study employs the CBAM as a quasi-natural experiment and applies a difference-in-differences (DID) model for analysis. Our findings indicate that the CBAM has a significant positive impact on outward greenfield investments, as robustly validated through a series of rigorous robustness checks. Mechanism analysis reveals two operational channels: trade restructuring effect (reduced export shares) and innovation-driven demand effect (enhanced R&D intensity). Heterogeneity tests further indicate more substantial CBAM responsiveness among eastern coastal firms, non-state-owned enterprises, and those pursuing horizontal production-oriented expansions. This study contributes to the literature on CBAM’s effects and offers practical recommendations for enterprises to mitigate CBAM’s impact via greenfield investments. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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38 pages, 819 KB

Open AccessArticle

The Impact of Climate Risk on Insurers’ Sustainable Operational Efficiency: Empirical Evidence from China

by Ziheng Xu, Houqing Fang and Weidong Wang

Sustainability 2025, 17(8), 3423; https://doi.org/10.3390/su17083423 - 11 Apr 2025

Cited by 2 | Viewed by 5399

Abstract

The operational efficiency of insurance companies is crucial for their long-term stability and sustainable development. Climate risk has emerged as a significant factor affecting insurers’ operational performance in the context of global climate change and sustainable development goals. Although prior research provides a [...] Read more.

The operational efficiency of insurance companies is crucial for their long-term stability and sustainable development. Climate risk has emerged as a significant factor affecting insurers’ operational performance in the context of global climate change and sustainable development goals. Although prior research provides a solid foundation, further exploration is needed to clarify how climate risk influences insurers’ efficiency and underlying mechanisms. This paper uses panel data from 248 Chinese insurance companies spanning 2011 to 2021 to construct a climate risk indicator and systematically examines the potential pathways through which this indicator influences operational efficiency. Precisely, absolute temperature deviation measures physical climate risk, and an entropy-weighted method captures climate transition risk; the DEA model evaluates operating efficiency. A fixed-effects model reveals that physical climate risk may adversely affect operational efficiency, while climate transition risk demonstrates a U-shaped relationship with efficiency. Mechanism analysis shows that physical climate risk increases exposure to natural disaster losses, whereas transition risk may encourage green insurance development. Heterogeneity emerges across insurer types and between coastal and non-coastal regions, with resilient infrastructure mitigating the adverse effects of physical risks and insurance technology driving gradual transformation to offset initial transition risks. Overall, this study expands the perspective on how climate risk shapes the insurance industry’s sustainable development, offering theoretical and practical insights for policymakers to optimize risk management and promote green finance. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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31 pages, 1219 KB

Open AccessArticle

A Study on the Impact of Corporate Digital Transformation on Environmental, Social, and Governance (ESG) Performance: Mechanism Analysis Based on Resource Allocation Efficiency and Technological Gap

by Yu Sang, Kannan Loganathan and Priya Sukirthanandan

Sustainability 2025, 17(8), 3308; https://doi.org/10.3390/su17083308 - 8 Apr 2025

Cited by 7 | Viewed by 4885

Abstract

For a country like China, which places equal emphasis on economic development and environmental governance, the exploration of the potential of digital transformation to enhance corporate Environmental, Social, and Governance (ESG) performance is of paramount importance in achieving the carbon peak target by [...] Read more.

For a country like China, which places equal emphasis on economic development and environmental governance, the exploration of the potential of digital transformation to enhance corporate Environmental, Social, and Governance (ESG) performance is of paramount importance in achieving the carbon peak target by 2030. Accordingly, this paper employs a two-way fixed-effects model to analyze the impact of digital transformation on corporate ESG performance, based on annual data from Chinese listed companies from 2014 to 2023. On this basis, we established a theoretical framework and implemented a dual fixed-effects model. The findings argue that digital transformation materially enhances corporate ESG performance, primarily by enhancing resource allocation efficiency and narrowing the technological gap. The research results are confirmed to be valid through rigorous robustness testing and endogeneity analysis, with evident effects observed in large-scale, technology-intensive, asset-intensive, central–eastern regions, and high-tech enterprises. This research offers both theoretical foundations and practical insights for companies pursuing ESG performance enhancement through digital transformation while also providing a valuable point of reference for policymakers working toward green transformation and the carbon peaking target. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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26 pages, 431 KB

Open AccessArticle

ESG Policy–Practice Decoupling: A Measurement Framework and Empirical Validation

by Atta Guy Sylvestre Loko and Eduardo Schiehll

Sustainability 2025, 17(3), 1203; https://doi.org/10.3390/su17031203 - 2 Feb 2025

Cited by 4 | Viewed by 6096

Abstract

As sustainability becomes more critical to corporate strategy and performance, firms, investors, and researchers must continue to refine methods for measuring and addressing the gap between rhetoric and reality. Closing this gap is crucial to ensuring that externally oriented ESG claims are supported [...] Read more.

As sustainability becomes more critical to corporate strategy and performance, firms, investors, and researchers must continue to refine methods for measuring and addressing the gap between rhetoric and reality. Closing this gap is crucial to ensuring that externally oriented ESG claims are supported by genuine internal actions that benefit both the firm and society at large. To address this issue, this study introduces a theoretically driven framework to assess the alignment (or lack thereof) between firms’ ESG policies and their actual implementation. By proposing a more granular and objective measure, we address a gap in the existing literature. Additionally, we empirically validate this framework using data from ASSET4, providing insights into the extent and persistence of this phenomenon using a sample of S&P 1500 firms from 2016 to 2022. Our results reveal that misalignment between internal actions and external endorsements in managing environmental and social issues is both significant and persistent across the years analyzed. Over 80% of the sample firms exhibit this misalignment, underscoring its prevalence within the sample. In more recent years, however, firms have shown a clear tendency to prioritize internal actions over initiatives aimed at externally endorsing their efforts. Building on the framework we propose to measure ESG policy–practice decoupling, along with the empirical analysis we conducted, we discuss its broader implications and outline several opportunities for future research. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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18 pages, 954 KB

Open AccessArticle

The Role of Corporate Agility in Advancing Sustainable Strategy: Examining the Influence of Shareholder Activism and Board Commitment

by Henri Harapan Saragih, Muhammad Saifi, Nila Firdausi Nuzula and Saparila Worokinasih

Sustainability 2024, 16(24), 10861; https://doi.org/10.3390/su162410861 - 11 Dec 2024

Cited by 3 | Viewed by 2698

Abstract

This study investigates the impact of shareholder activism and board of directors (BOD) commitment on corporate agility and sustainability strategy within Indonesia’s inland container depot (ICD) industry. Data from 147 ICDs were collected using a census sampling method and a standardized questionnaire with [...] Read more.

This study investigates the impact of shareholder activism and board of directors (BOD) commitment on corporate agility and sustainability strategy within Indonesia’s inland container depot (ICD) industry. Data from 147 ICDs were collected using a census sampling method and a standardized questionnaire with a Likert scale. Using a quantitative explanatory research design, the data were analyzed using Structural Equation Modeling (SEM) via WarpPLS. The findings show that both shareholder activism and BOD commitment have a significant positive effect on corporate agility. Additionally, shareholder activism and corporate agility positively influence sustainability strategy, while BOD commitment has no direct significant impact on sustainability strategy. However, corporate agility mediates the relationship between BOD commitment and sustainability strategy, suggesting that BOD commitment enhances corporate agility, which, in turn, fosters the integration of sustainable practices. These results highlight the critical roles of shareholder activism and BOD commitment in enhancing corporate agility and driving sustainable practices within Indonesia’s ICD sector. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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14 pages, 274 KB

Open AccessArticle

Environmental, Social and Corporate Governance (ESG) and Total Factor Productivity: The Mediating Role of Financing Constraints and R&D Investment

by Haoming Ding, Wei Han and Zerui Wang

Sustainability 2024, 16(21), 9500; https://doi.org/10.3390/su16219500 - 31 Oct 2024

Cited by 11 | Viewed by 5120

Abstract

In recent years, “environment, society and governance” (ESG) has attracted widespread attention. As an investment philosophy focused on long-term value creation and non-financial performance indicators, ESG addresses internal governance challenges and fosters high-quality economic and social development. This study uses panel data analysis [...] Read more.

In recent years, “environment, society and governance” (ESG) has attracted widespread attention. As an investment philosophy focused on long-term value creation and non-financial performance indicators, ESG addresses internal governance challenges and fosters high-quality economic and social development. This study uses panel data analysis of 9125 observations from 1305 eligible companies to examine the relationship between ESG ratings, financing constraints, corporate research and development (R&D), and total factor productivity (TFP). It focuses on heavily polluting enterprises listed on the Shanghai and Shenzhen A-shares from 2012 to 2022. The findings show that (1) ESG ratings significantly impact TFP for the better, and (2) financial limitations act as a go-between for the ESG ratings and TFP connection, and (3) corporate R&D also serves as a mediator between ESG ratings and TFP. These findings offer valuable insights for shaping corporate ESG strategies, driving green transformation, enhancing productivity, advancing sustainable development, and supporting high-level environmental protection. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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20 pages, 1370 KB

Open AccessSystematic Review

What ESG Has Not (Yet) Delivered: Proposition of a Framework to Overcome Its Hurdles

by Élen Cristina Bravos Giupponi, Camila Fabrício Poltronieri, Yasmin Silva Martins Xavier and Otávio José de Oliveira

Sustainability 2025, 17(18), 8257; https://doi.org/10.3390/su17188257 - 14 Sep 2025

Cited by 3 | Viewed by 1556

Abstract

Environmental, Social, and Governance (ESG) issues have gained increasing prominence in corporate agendas and the academic literature. However, significant hurdles remain regarding its effectiveness, standardization, and authenticity. This work aims to develop a framework containing recommendations to overcome these hurdles and enable more [...] Read more.

Environmental, Social, and Governance (ESG) issues have gained increasing prominence in corporate agendas and the academic literature. However, significant hurdles remain regarding its effectiveness, standardization, and authenticity. This work aims to develop a framework containing recommendations to overcome these hurdles and enable more effective ESG practices. To this end, a systematic literature review (SLR) was adopted as the research method to provide an organized and in-depth overview of the current state of the art in the ESG literature and its main gaps. Through the SLR, 35 hurdles were identified, organized into five axes: integration, assessment, stakeholders, territoriality, and sectorization. Building on these hurdles, a framework comprising 39 recommendations was proposed, targeting the ESG key players: companies, rating agencies, guideline developers, academia, and other stakeholders. As a theoretical contribution, this work articulates previously fragmented knowledge on ESG, helping to bridge the identified research gap, outlining pathways for further and deeper reflections, especially in relation to the persistent decoupling between expected and achieved results in sustainability. As practical contributions, it helps avoid negative impacts for ESG key players, leading them to achieve more realistic assessments, adopt better practices, and increase comparability across initiatives, supporting ESG to reach greater effectiveness, enhance assessment metrics, increase the consistency of reporting, broaden stakeholder engagement, and strengthen institutional mechanisms. Full article

(This article belongs to the Special Issue Corporate Sustainability and ESG: Strategies, Tools, Good Practices and Challenges)

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