IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2021i1p209-d711368.html
   My bibliography  Save this article

Exploring the Moderating Role of Social and Ethical Practices in the Relationship between Environmental Disclosure and Financial Performance: Evidence from ESG Companies

Author

Listed:
  • Salim Chouaibi

    (Department of Accounting, Faculty of Economics and Management of Sfax, University of Sfax, Sfax 3018, Tunisia)

  • Matteo Rossi

    (Department of Law, Economics, Management and Quantitative Methods (DEMM), University of Sannio, 82100 Benevento, Italy)

  • Dario Siggia

    (Department of Agricultural and Forest Sciences, University of Palermo, 90128 Palermo, Italy)

  • Jamel Chouaibi

    (Department of Accounting, Faculty of Economics and Management of Sfax, University of Sfax, Sfax 3018, Tunisia)

Abstract

Environmental disclosure is the latest novelty in the corporate reporting field. In fact, it is a tool that can better represent the capacity of companies in creating financial performance over time. Therefore, this paper analyzes whether environmental disclosure (ED) practiced by firms listed on the ESG index affects their financial performance (FP) using the moderating effect of social and ethical practices. The analysis includes a linear regression using panel data from Thomson Reuters and Bloomberg databases. Panel data were collected from a sample of 523 companies listed on the North American and West European stock exchanges. The obtained results show a positive and significant relationship between environmental disclosure (ED) and financial performance (FP). This implies that a strong environmental disclosure increases financial performance while a weak one decreases it. Furthermore, the study suggests a moderating effect of social and ethical practices in the link between environmental disclosure and the firm’s financial performance. In fact, these findings provide interesting insights for academic practitioners and regulators who are interested in discovering environmental disclosure, firm’s performance, and social and ethical practices. These findings also provide insights to stakeholders and regulators on the crucial need to integrate more social and environmental regulations to promote sustainability. Moreover, this paper fills the gaps existing in previous studies that ignore the moderating role of social and ethical practices in the relationship between environmental disclosure and financial performance.

Suggested Citation

  • Salim Chouaibi & Matteo Rossi & Dario Siggia & Jamel Chouaibi, 2021. "Exploring the Moderating Role of Social and Ethical Practices in the Relationship between Environmental Disclosure and Financial Performance: Evidence from ESG Companies," Sustainability, MDPI, vol. 14(1), pages 1-17, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2021:i:1:p:209-:d:711368
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/1/209/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/1/209/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Juan Herrera & Carlos de las Heras-Rosas, 2020. "Corporate Social Responsibility and Human Resource Management: Towards Sustainable Business Organizations," Sustainability, MDPI, vol. 12(3), pages 1-24, January.
    2. James N. Cannon & Zhejia Ling & Qian Wang & Olena V. Watanabe, 2020. "10-K Disclosure of Corporate Social Responsibility and Firms’ Competitive Advantages," European Accounting Review, Taylor & Francis Journals, vol. 29(1), pages 85-113, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdalwali Lutfi & Hamza Alqudah & Mahmaod Alrawad & Ahmad Farhan Alshira’h & Malek Hamed Alshirah & Mohammed Amin Almaiah & Adi Alsyouf & Mohammed Faisal Hassan, 2023. "Green Environmental Management System to Support Environmental Performance: What Factors Influence SMEs to Adopt Green Innovations?," Sustainability, MDPI, vol. 15(13), pages 1-20, July.
    2. Muhammad Kashif Ali & Muhammad Khurram Zahoor & Asif Saeed & Safia Nosheen, 2023. "Moderating effect of vertical integration on the relationship between sustainability and performance: evidence from oil and gas energy sector," Future Business Journal, Springer, vol. 9(1), pages 1-11, December.
    3. Weizhou Su & Nieping Wei & Zihan Yuan & Sidai Guo, 2023. "The Impact of Environmental Information Disclosure on the Efficiency of Enterprise Capital Allocation," Sustainability, MDPI, vol. 15(14), pages 1-19, July.
    4. Miao Li & Rajah Rasiah, 2024. "Can ESG Disclosure Stimulate Corporations’ Sustainable Green Innovation Efforts? Evidence from China," Sustainability, MDPI, vol. 16(21), pages 1-20, October.
    5. Xiaowei Ding & Lyu Ye & Yueying Yang & Olga Efimova & Alina Steblyanskaya & Junfeng Zhang, 2022. "The Impact Mechanism of Environmental Information Disclosure on Corporate Sustainability Performance—Micro-Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-22, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kladakis, George & Chen, Lei & Bellos, Sotirios K., 2023. "Ethical bank disclosures and liquidity creation," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 84(C).
    2. Gregorio Sánchez-Marín & Gabriel Lozano-Reina & Mané Beglaryan, 2022. "HRM Policies and SMEs Performance: The Moderating Role of CSR Orientation," Central European Business Review, Prague University of Economics and Business, vol. 2022(1), pages 85-110.
    3. Li, Xiaoyu & Zou, Lin, 2024. "Does mandating narrative disclosure of innovation help unveil the curtain of R&D expenditure? Evidence from regulation change in China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    4. Faisal Mahmood & Faisal Qadeer & Usman Sattar & Antonio Ariza-Montes & Maria Saleem & Jaffar Aman, 2020. "Corporate Social Responsibility and Firms’ Financial Performance: A New Insight," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    5. Nguyen, Quyen & Diaz-Rainey, Ivan & Kuruppuarachchi, Duminda, 2023. "In search of climate distress risk," International Review of Financial Analysis, Elsevier, vol. 85(C).
    6. Oscar Morell-Santandreu & Cristina Santandreu-Mascarell & Julio García-Sabater, 2020. "Sustainability and Kaizen: Business Model Trends in Healthcare," Sustainability, MDPI, vol. 12(24), pages 1-28, December.
    7. Carmen Emilia Chașovschi & Carmen Nastase & Mihai Popescu & Adrian-Liviu Scutariu & Iulian-Alexandru Condratov, 2021. "Human Resources Training Needs in the Small and Medium Enterprises from Cross-Border Area Romania-Ukraine-Republic of Moldova," Sustainability, MDPI, vol. 13(4), pages 1-28, February.
    8. Iwona Escher & Pawel Brzustewicz, 2020. "Inter-Organizational Collaboration on Projects Supporting Sustainable Development Goals: The Company Perspective," Sustainability, MDPI, vol. 12(12), pages 1-26, June.
    9. Eryk Szwarc & Grzegorz Bocewicz & Paulina Golińska-Dawson & Zbigniew Banaszak, 2023. "Proactive Operations Management: Staff Allocation with Competence Maintenance Constraints," Sustainability, MDPI, vol. 15(3), pages 1-20, January.
    10. Karim, Mohammed Shamsul & Nahar, Sharmin & Demirbag, Mehmet, 2022. "Resource-Based Perspective on ICT Use and Firm Performance: A Meta-analysis Investigating the Moderating Role of Cross-Country ICT Development Status," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    11. Mercedes Jiménez-García & José Ruiz-Chico & Antonio Rafael Peña-Sánchez, 2020. "Landscape and Tourism: Evolution of Research Topics," Land, MDPI, vol. 9(12), pages 1-17, December.
    12. Tianli Feng & Fan Yang & Biao Tan & Jihong Wu, 2022. "Corporate Social Irresponsibility Punishments from Stakeholders—Evidence from China," Sustainability, MDPI, vol. 14(8), pages 1-14, April.
    13. Sara Silva & Luís Filipe Silva & António Vieira, 2023. "Protected Areas and Nature-Based Tourism: A 30-Year Bibliometric Review," Sustainability, MDPI, vol. 15(15), pages 1-25, July.
    14. Albertina Paula Monteiro & Beatriz Aibar-Guzmán & María Garrido-Ruso & Cristina Aibar-Guzmán, 2021. "Employee-Related Disclosure: A Bibliometric Review," Sustainability, MDPI, vol. 13(10), pages 1-38, May.
    15. Saqib Yaqoob Malik & Yasir Hayat Mughal & Tamoor Azam & Yukun Cao & Zhifang WAN & Hongge ZHU & Ramayah Thurasamy, 2021. "Corporate Social Responsibility, Green Human Resources Management, and Sustainable Performance: Is Organizational Citizenship Behavior towards Environment the Missing Link?," Sustainability, MDPI, vol. 13(3), pages 1-24, January.
    16. Katarzyna Piwowar-Sulej & Dominika Bąk-Grabowska, 2020. "Non-Permanent Employment and Employees’ Health in the Context of Sustainable HRM with a Focus on Poland," Social Sciences, MDPI, vol. 9(7), pages 1-23, July.
    17. Mushtaq, Rizwan & Gull, Ammar Ali & Shahab, Yasir & Derouiche, Imen, 2022. "Do financial performance indicators predict 10-K text sentiments? An application of artificial intelligence," Research in International Business and Finance, Elsevier, vol. 61(C).
    18. Nitya Singh & Paul Hong, 2023. "CSR, Risk Management Practices, and Performance Outcomes: An Empirical Investigation of Firms in Different Industries," JRFM, MDPI, vol. 16(2), pages 1-20, January.
    19. Svenja Dube & Chenqi Zhu, 2021. "The Disciplinary Effect of Social Media: Evidence from Firms' Responses to Glassdoor Reviews," Journal of Accounting Research, Wiley Blackwell, vol. 59(5), pages 1783-1825, December.
    20. Aida Ahmed Zahrani, 2022. "Team Creativity and Green Human Resource Management Practices’ Mediating Roles in Organizational Sustainability," Sustainability, MDPI, vol. 14(19), pages 1-24, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2021:i:1:p:209-:d:711368. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.