Search Results (159)

This paper explores the key professional and institutional factors that influence the integration of environmental, social, and governance (ESG) considerations into financial evaluation and auditing processes. The study investigates the impact of legal familiarity, ESG experience, professional qualifications, and digital competencies on ESG readiness among financial analysts, auditors, and economists. By integrating a structured review of academic literature with an in-depth analysis of European regulatory instruments, the research identifies how dual materiality principles, standardized ESG metrics, and taxonomy-aligned disclosures reshape professional practices. A structured, ethics-approved survey (10 items) was administered nationally, and 145 responses were retained for analysis across economists, analysts, and auditors. Descriptive statistics, Pearson correlations, and linear/multiple regressions were used to test three hypotheses regarding ESG experience, legislative familiarity, and multifactor effects. The results reveal that familiarity with EU legislation is the strongest predictor of ESG integration capacity, while ESG-related experience and digitalization also show moderate to strong influence. The multiple regression model confirms the multifactorial nature of ESG implementation, though not all professional predictors contribute equally. Residual analysis confirms the statistical robustness of the models. The study highlights the need for regulatory literacy, targeted training, and digital adaptation as critical components of ESG competency. Full article

The transition from soft to hard law is reshaping global agri-food governance, particularly in relation to sustainability and corporate responsibility. This article analyzes this shift by examining two regulatory approaches: voluntary instruments such as the OECD-FAO Guidance for Responsible Agricultural Supply Chains and binding EU directives like the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD). Using a qualitative and interpretive methodology, the study combines a literature review and two case studies (Nicoverde and Lavazza) to explore the evolution from soft law to hard law and the synergies and analyze how these tools are applied in the Italian agri-food sector and how they can contribute to improving corporate sustainability performance. Findings show that soft law has paved the way for more rigorous regulation, but the increasing compliance burden poses challenges, especially for small and medium-sized enterprises (SMEs). These cases serve as virtuous examples to illustrate how soft and hard law interact in practice, offering concrete insights into the translation of general sustainability principles into corporate strategies. A hybrid governance framework—combining voluntary and binding tools—can foster sustainability if supported by coherent policies, stakeholder collaboration and adequate support mechanisms. The study offers practical insights for both companies and policymakers navigating the evolving legal scenario. Full article

Corporate ESG (Environmental, Social, and Governance) reporting is increasingly envisioned as evidence of accountability in the energy transition, yet persistent gaps remain between commitments and practices. This study applied the Global Reporting Initiative (GRI) framework—specifically indicators 302 (Energy) and 305 (Emissions)—to evaluate the credibility, scope, and strategic depth of disclosures by 20 Wisconsin (WI) firms in the energy, manufacturing, food, and service sectors. Guided by accountability and legitimacy theory, a comparative content analysis was conducted, complemented by Spearman correlation to examine associations between firm size and disclosure quality. Results show that while firms consistently report basic metrics such as total energy consumption and Scope 1 emissions, disclosures on Scope 3 emissions, renewable sourcing, and energy-efficiency achievements remain partial and selectively framed. Third-party assurance is inconsistently applied, and methodological transparency—such as external audit and coding protocols—is limited, weakening credibility. A statistically significant negative correlation was observed between annual revenue and disclosure quality, indicating that greater financial capacity does not necessarily translate into greater transparency. These findings highlight methodological and governance shortcomings, including reliance on generic ESG frameworks rather than climate-focused standards such as Task Force on Climate-related Financial Disclosures (TCFD). Integrated reporting approaches are recommended to improve comparability, credibility, and alignment with Wisconsin’s Clean Energy Transition Plan. Full article

This study investigates the relationship between artificial intelligence (AI) adoption and environmental, social, and governance (ESG) performance among 100 listed Saudi Arabian firms over the period 2015–2024. Drawing on panel data regression techniques, including fixed effects models with Driscoll–Kraay standard errors, pooled OLS with industry and year controls, and dynamic panel estimations using system GMM, the analysis reveals a significant and positive association between AI implementation and overall ESG scores. Disaggregated analysis shows that AI adoption is particularly associated with improvements in the environmental and social dimensions, with a more moderate relationship to governance practices. To address potential issues of cross-sectional dependence and heterogeneity, the study applies the Common Correlated Effects Mean Group (CCEMG) and Mean Group (MG) estimators as robustness checks, which confirm the consistency of the main findings. In addition, the Dumitrescu–Hurlin panel Granger causality test indicates that AI adoption Granger-causes ESG performance—especially in the environmental and social dimensions—while no reverse causality is observed. The results suggest that AI technologies are positively linked to firms’ sustainability strategies and performance, supporting the integration of digital transformation into national and corporate ESG agendas, particularly in emerging markets like Saudi Arabia. Full article

This study investigates the relationship between corporate reporting practices and the value relevance of accounting information by analyzing 100 publicly listed non-financial European firms between 2015 and 2019. Drawing on the Ohlson valuation framework, the analysis combines random effects with Driscoll–Kraay standard errors and System GMM estimations to assess the role of financial and non-financial disclosures. Materiality and stakeholder engagement were scored through content analysis of corporate reports, while ESG performance data were obtained from Refinitiv Eikon. The results show that financial fundamentals remain the most robust determinants of firm value, consistent with Ohlson’s model. Among qualitative disclosures, materiality demonstrates a strong and statistically significant positive association with market value in the random effects specification, while stakeholder engagement and ESG scores do not attain statistical significance. In the dynamic panel model, lagged market value is highly significant, confirming the persistence of valuation, while the effect of materiality and stakeholder engagement diminishes. Interaction models further indicate that materiality strengthens the relevance of earnings but reduces the role of book value, underscoring its selective contribution. Overall, the findings provide partial support for the claim that Integrated Reporting enhances the value relevance of accounting information. It suggests that the usefulness of IR depends less on adoption per se and more on the quality and substance of disclosures, particularly the integration of financial material ESG issues into corporate reporting. This highlights IR’s potential to improve transparency, accountability, and investor decision making, thereby contributing to more effective capital market outcomes. Full article

The evolution of sustainability reporting has led to an increased emphasis on environmental disclosures, often at the expense of social and governance dimensions. While frameworks such as the International Sustainability Standards Board’s (ISSB) IFRS S2 standard offer important advances in climate-related transparency, they insufficiently address the broader social aspects of corporate sustainability performance. In response to this gap, this study investigates the interoperability of social disclosures across three major frameworks: ISSB S2, the European Sustainability Reporting Standards (ESRS), and the Global Reporting Initiative (GRI) standards. Using a structured interoperability index, we systematically map and score the degree of thematic and structural alignment between these standards, focusing specifically on social disclosure topics. The analysis reveals moderate interoperability between ESRS and GRI social disclosures, but far lower alignment between ISSB S2 and either ESRS or GRI, confirming the ongoing underrepresentation of the social pillar within the ISSB framework. Connectivity ratios remain below 6% across all matrices, underscoring persistent fragmentation in global ESG reporting standards. These findings highlight the need for regulatory bodies and standard setters to advance harmonization efforts that equally prioritize environmental, social, and governance dimensions. By foregrounding the interoperability gaps in social disclosures, this study contributes to the academic debate on ESG convergence and informs policy discussions on developing multidimensional, stakeholder-responsive reporting architectures. Full article

Supply chain financing offers advantages over traditional channels such as bank loans and equity financing, including greater flexibility, lower transaction costs, and simplified approval procedures. However, when a firm’s sustainability faces uncertainty, access to supply chain financing may become constrained by multiple factors, including the risk tolerance of supply chain partners, market transparency, and corporate reputation. ESG, representing Environmental, Social, and Governance standards, is a critical framework for assessing corporate sustainability performance. Given that divergent ESG evaluations reflect disparate market assessments of a firm’s sustainable development capabilities, such divergence may affect supply chain financing by altering stakeholder trust dynamics. This research examines A-share listed firms in China (2016–2022) and reveals that divergence in ESG evaluations significantly inhibits firms’ access to supply chain financing. Mechanism validation suggests that divergent ESG evaluations amplify informational opacity, operational risks, and negative reputation, thereby influencing supply chain partners’ risk perceptions and trust levels. Heterogeneity analysis shows that corporate governance quality, regional trust levels, and ESG awareness modulate the negative impact of divergent ESG evaluations on supply chain financing. The asymmetric effects of divergent ESG evaluations on supply chain financing are further confirmed, with distinct manifestations between upstream suppliers and downstream customers. By bridging gaps in existing research on divergent ESG evaluations and supply chain finance, this work offers regulatory guidelines, operational recommendations for firms, and investment decision frameworks. Full article

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 study investigates the impact of financial performance and corporate governance mechanisms on environmental, social, and governance (ESG) disclosure in Saudi Arabia, a country undergoing significant institutional transformation under Saudi Vision 2030 and Tadawul’s 2021 ESG reporting reforms. While ESG research has gained traction globally, studies in emerging economies, particularly in the Gulf region, remain limited. This paper addresses this gap by examining whether profitability, measured by return on assets (ROA), and board size influence ESG disclosure. This study analyzes 260 firm-year observations of Saudi non-financial listed companies from 2009 to 2023. Using multiple regression analysis, including ordinary least squares (OLS), fixed effects (FE), and generalized method of moments (GMM), the analysis controls for endogeneity and ensures robust results. Findings indicate that board size had a negative and statistically significant relationship with ESG disclosure. The robustness tests confirm the inverse relationship between board size and ESG. ROA showed no correlation with ESG disclosure in the main findings; however, robustness tests revealed a negative and significant correlation. This study is the first to explore these impacts post Tadawul’s 2021 ESG guidelines. It also offers novel insights into ESG practices aligned with Saudi Vision 2030. This study contributes to the literature by situating ESG disclosure within the Saudi context, highlighting the unique role of governance dynamics in shaping sustainability practices in emerging markets. The results carry practical implications for policymakers, regulators, and corporate boards by recommending stronger governance frameworks, such as board-level ESG committees, executive compensation linked to ESG, and sector-specific disclosure standards. Full article

This study introduces the SESG (Security, Environmental, Social, Governance) framework as a necessary evolution of traditional ESG, aimed at enhancing societal and corporate resilience in the face of hybrid threats, war, and climate crises. By integrating a security dimension, SESG responds to the growing inadequacy of classical ESG models in high-risk environments, particularly for countries like Ukraine. The research combines theoretical analysis with empirical data, including a nationwide survey of Ukrainian professionals across business, government, and civil society sectors. The findings reveal overwhelming support—over 90%—for incorporating security into ESG, especially in sectors such as IT, energy, and logistics. The article proposes a matrix of qualitative and quantitative indicators to assess SESG performance and highlights business-led contributions to national defense. The results demonstrate that security is not just a governmental concern but a key factor in corporate responsibility, investor trust, and sustainable development. The study concludes that SESG offers both a scientific reframing of resilience and a practical tool for policy and strategy, particularly under conditions of geopolitical and environmental instability. It urges cross-sector collaboration, standardization, and awareness building to embed SESG as a core principle in global sustainability agendas. Full article

Quality assurance (QA) in higher education has become increasingly vital in response to global competition, digital transformation, and evolving sustainability demands. This study examines the leading QA frameworks—namely the European Standards and Guidelines (ESG), the EFQM Excellence Model, and ISO 9001—while integrating advanced analytical methodologies, including Data Envelopment Analysis (DEA), the Analytic Hierarchy Process (AHP), and Bayesian modeling, to propose a comprehensive framework for assessing university performance. Through empirical analysis and comparative case studies of internationally ranked universities, this study demonstrates that combining objective indicators with quantitative methods significantly improves institutional efficiency, transparency, and competitiveness. Additionally, the role of digital education, ESG-driven sustainability strategies, and AI-based student feedback systems emerge as being crucial to the effectiveness of QA practices. The results suggest that hybrid evaluation models—blending traditional QA principles with data-driven analytics—promote continuous improvement, optimize resource management, and enhance educational outcomes. This research ultimately highlights the growing relevance of advanced quantitative frameworks in modernizing QA systems and supporting universities in addressing dynamic global challenges. Full article

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 study investigates how Environmental, Social, and Governance (ESG) performance is shaped across 31 countries in the European Union (EU) and the Association of Southeast Asian Nations (ASEAN) from 1990 to 2020. To explore these relationships, we employed the Continuously Updated Generalized Method of Moments (CUE-GMM) and the Limited Information Maximum Likelihood (LIML), with additional robustness checks using Instrumental Variables Two-Stage Least Squares (IV-2SLS), Panel-Corrected Standard Errors (PCSE), and Driscoll-Kraay regressions. The results highlight democratic governance as a consistent driver of ESG advancement. Military expenditure can also support sustainability by reinforcing institutional stability, particularly in developing and upper-middle-income countries. Economic factors such as foreign direct investment, industrialization, and human capital show context-dependent effects, whereas globalization and natural resource rents generally enhance ESG performance, and inflation tends to constrain it. Overall, the findings underscore the importance of tailored, context-specific sustainability policies, showing that effective ESG progress depends on the interaction between institutions, economic structures, and global integration. Full article

As investors increasingly use Environmental, Social, and Governance (ESG) criteria, a key challenge remains: ESG data is typically reported annually, while financial markets move much faster. This study investigates whether incorporating annual ESG scores can improve monthly stock return forecasts for German DAX-listed firms. We employ a multivariate long short-term memory (LSTM) network, a machine learning model ideal for time series data, to test this hypothesis over two periods: an 8-year analysis with a full set of ESG scores and a 16-year analysis with a single disclosure score. The evaluation of model performance utilizes standard error metrics and directional accuracy, while statistical significance is assessed through paired statistical tests and the Diebold–Mariano test. Furthermore, we employ SHapley Additive exPlanations (SHAP) to ensure model explainability. We observe no statistically significant indication that incorporating annual ESG data enhances forecast accuracy. The 8-year study indicates that using a comprehensive ESG feature set results in a statistically significant increase in forecast error (RMSE and MAE) compared to a baseline model that utilizes solely historical returns. The ESG-enhanced model demonstrates no significant performance disparity compared to the baseline across the 16-year investigation. Our findings indicate that within the one-month-ahead projection horizon, the informative value of low-frequency ESG data is either fully incorporated into the market or is concealed by the significant forecasting capability of the historical return series. This study’s primary contribution is to demonstrate, through out-of-sample testing, that standard annual ESG information holds little practical value for generating predictive alpha, urging investors to seek more timely, alternative data sources. Full article

This study examines whether the integration of Environmental, Social, and Governance (ESG) factors enhances the accuracy of financial forecasts. Using a dataset of 2548 publicly listed companies from 98 countries, we evaluate a range of machine learning models—from ARIMA to XGBoost—by comparing the forecast performance of firms with high and low ESG scores (based on the sample median). Model accuracy is assessed through MAE, RMSE, MSE, MAPE, and R², complemented by statistical significance tests. Results show no consistent improvement in predictive performance for high-ESG firms, with only the Business Services sector displaying a marginal effect. These findings challenge the assumption that ESG integration inherently reduces forecast uncertainty, suggesting instead that ESG scores contribute little to predictive accuracy under long-term investment conditions. The study highlights the importance of model choice, careful control of exogenous variables, and rigorous testing, while underscoring the broader need for standardized ESG metrics in financial research. Full article