Imen Khanchel, Naima Lassoued and Ines Baccar
This paper aims to determine whether financial performance is affected in firms adopting separately or jointly two sustainability tools (green innovation and environmental, social…
Abstract
Purpose
This paper aims to determine whether financial performance is affected in firms adopting separately or jointly two sustainability tools (green innovation and environmental, social and governance reporting (ESG)).
Design/methodology/approach
The empirical study examines a sample of 211 S&P 500 firms over the 2011 to 2019 period and uses the quantile estimation method.
Findings
The results show that two dimensions of ESG disclosure (the social and governance dimensions) and green innovation positively affect financial performance. This result suggests that sustainability tools have a strong financial impact. The positive relationship between green innovation and financial performance is detected at the 10th quantile up to the 70th quantile. This finding suggests that financial performance needs a moderate investment in green innovation. When considering the joint effect of ESG disclosure and green innovation, our findings show that the positive impact of some ESG disclosure dimensions (social and governance) on financial performance is more observable with a moderate investment in green innovation.
Originality/value
This study highlights the prominent role of sustainability tools in financial performance. Despite the contributions of the literature, to our knowledge, the relationship between these tools and financial performance is not yet comprehensively investigated. Sustainability is less studied from the social movement perspective. This paper is among the few to study the effect of ESG reporting on financial performance in a world of green innovation.
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Isha Kampoowale, Ines Kateb, Zalailah Salleh and Waleed M. Alahdal
This study examines the relationship between board gender diversity (BGD) and financial performance (FP) in the Malaysian emerging market, focusing on the mediating role of…
Abstract
Purpose
This study examines the relationship between board gender diversity (BGD) and financial performance (FP) in the Malaysian emerging market, focusing on the mediating role of Environmental, Social and Governance (ESG) performance.
Design/methodology/approach
Using a dataset of 976 observations from Malaysian publicly listed companies from 2016 to 2023, this study explores BGD as the independent variable with FP measured through both accounting and market metrics. ESG performance serves as a mediating variable. The analysis employs Structural Equation Modelling (SEM) to examine direct and mediating effects, supplemented by the Baron and Kenny approach and Two-Stage Least Squares (2SLS) regression for robustness.
Findings
The findings indicate that higher BGD positively and significantly impacts all three performance measures: Tobin's Q (TQ), Return on Assets (ROA) and Return on Equity (ROE). ESG performance positively influences these measures. The SEM analysis reveals a significant positive impact of BGD on ESG performance, which fully mediates the relationship between BGD and TQ/ROA and partially mediates the relationship between BGD and ROE.
Practical implications
The results have significant implications for policymakers, board members, scholars and investors, stressing the importance of gender diversity and ESG performance in improving FP. The findings suggest that enhancing board effectiveness through BGD can promote sustainable practices and align corporate strategies with broader sustainability goals, which eventually helps to improve companies’ FP.
Originality/value
This research contributes to the literature by highlighting the mediating role of ESG performance in the relationship between BGD and FP and emphasizing the importance of gender diversity in corporate sustainability. It addresses this gap by providing insights into how ESG performance enhances the impact of BGD on FP.
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Imen Khanchel, Naima Lassoued and Ines Bargaoui
This study aims to examine the effects of green financing through pollution control bonds (PCBs) on environmental performance.
Abstract
Purpose
This study aims to examine the effects of green financing through pollution control bonds (PCBs) on environmental performance.
Design/methodology/approach
This study is based on a panel of 189 US energy utility firms observed over the period, 2011–2021 ; this study applies Generalized Method of Moments regressions.
Findings
This study found that PCBs positively affect environmental performance (aggregate measure, greenhouse emissions, waste landfill, waste incineration and waste recycling). These findings remain robust when this study considers alternative measures of PCBs and environmental performance, the quantile regression method and some firms’ attributes such as financial performance and firm age.
Practical implications
The results indicate that US energy utility firms have to adopt more PCBs. This study helps researchers, practitioners, shareholders, bondholders, equity analysts and local authorities such as the California Pollution Control Financing Authority, municipalities and investors understand PCBs issuance, usefulness and relevance.
Originality/value
To the best of the authors’ knowledge, this study is the first to explore the effectiveness of PCBs in reducing pollution.