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The effect of innovation on environmental, social and governance (ESG) practices

Author

Listed:
  • Grazia Dicuonzo
  • Francesca Donofrio
  • Simona Ranaldo
  • Vittorio Dell'Atti

Abstract

Purpose - This paper aims to investigate if and to what extent environmental, social and governance (ESG) practices are influenced by innovation, measured by investment in research and development (R&D) and the number of patents developed by companies. Design/methodology/approach - To test this hypothesis, the authors estimated a regression model for the panel data considering a time horizon of eight years. The analysis was conducted on a sample of listed firms operating in the industrial sector in France, Germany, Italy, Spain, the UK and the USA. Findings - The empirical analysis shows that there is a positive and significant relationship between ESG practices and innovation. Companies investing more in R&D and patents have better ESG performance. Originality/value - This study contributes to the existing literature by improving the understanding of the importance of innovation in improving ESG practices for firms in the industrial sector. Furthermore, it provides empirical evidence of the ability of innovation to be a valuable tool for sustainable industry development through R&D investment and patent development.

Suggested Citation

  • Grazia Dicuonzo & Francesca Donofrio & Simona Ranaldo & Vittorio Dell'Atti, 2022. "The effect of innovation on environmental, social and governance (ESG) practices," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 30(4), pages 1191-1209, April.
    • Handle: RePEc:eme:medarp:medar-12-2020-1120
    DOI: 10.1108/MEDAR-12-2020-1120
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    Citations

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    Cited by:

    1. Amit Kumar Singh & Yifang Zhang & Anu, 2023. "Understanding the Evolution of Environment, Social and Governance Research: Novel Implications From Bibliometric and Network Analysis," Evaluation Review, , vol. 47(2), pages 350-386, April.
    2. Leogrande, Angelo & Leogrande, Domenico & Costantiello, Alberto, 2023. "The Impact of Patent Applications in the Context of the ESG Model at World Level," EconStor Preprints 273495, ZBW - Leibniz Information Centre for Economics.
    3. Chai Bin‐Feng & Sultan Sikandar Mirza & Tanveer Ahsan & Muhammad Azeem Qureshi, 2024. "How uncertainty can determine corporate ESG performance?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2290-2310, May.
    4. Chang Liu & Zihao Xin, 2024. "Does environmental, social, and governance practice boost corporate human capital inflow in China? From the perspective of stakeholder response," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3251-3273, July.
    5. Salihi, Awaisu Adamu & Ibrahim, Haslindar & Baharudin, Dayana Mastura, 2024. "Environmental governance as a driver of green innovation capacity and firm value creation," Innovation and Green Development, Elsevier, vol. 3(2).
    6. Plesea Doru Alexandru & Petre Adrian & Olaru Stelian Mircea, 2023. "How Companies Can Gain a Sustainable Competitive Advantage in the New Digital Era? The Case of Romania," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 2002-2013, July.

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