IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v185y2023i3d10.1007_s10551-022-05183-1.html
   My bibliography  Save this article

Exploring the Effectiveness of Sustainability Measurement: Which ESG Metrics Will Survive COVID-19?

Author

Listed:
  • Jill Atkins

    (Cardiff University)

  • Federica Doni

    (University of Milano-Bicocca)

  • Andrea Gasperini

    (AIAF)

  • Sonia Artuso

    (AIAF)

  • Ilaria Torre

    (CSR Europe)

  • Lorena Sorrentino

    (CSR Europe)

Abstract

This paper aims to investigate the current state of play on Environmental Social and Governance (ESG) integration and check the validity of the current metrics system by assessing if it will survive the COVID-19 crisis. By adopting a qualitative research approach through semi-structured anonymous interviews with 14 senior managers of six European listed companies we use a framework by assessing the mechanisms of reactivity on the effectiveness of ESG measures in times of COVID-19. By interpreting the practitioners’ points of view through the lens of the sociological framework by Espeland and Sauder (Am J Sociol 113:1–40, 2007) our findings show different mechanisms of reactivity by companies on the effectiveness of ESG measures in times of COVID-19, i.e., active and passive conformity and active resistance. We also identified the main Corporate Social Responsibility (CSR) institutional factors that affect managers’ reactivity. An extensive re-formulation of the ESG metrics is required in the light of times of crisis, given that accountability and transparency are strongly linked to quantitative measures which can play a critical role in the financial system and investors’ engagement. Particularly, the strict distinction between “E”, “S” and “G” issues should be abandoned claiming a different holistic re-design of sustainability measures by considering the increasing relevance of the Social dimension in time of COVID-19. This study provides a valuable contribution to the existing literature on the measurement of sustainability within the link of accountability and crisis by highlighting new corporate needs to re-design the ESG metrics system.

Suggested Citation

  • Jill Atkins & Federica Doni & Andrea Gasperini & Sonia Artuso & Ilaria Torre & Lorena Sorrentino, 2023. "Exploring the Effectiveness of Sustainability Measurement: Which ESG Metrics Will Survive COVID-19?," Journal of Business Ethics, Springer, vol. 185(3), pages 629-646, July.
    • Handle: RePEc:kap:jbuset:v:185:y:2023:i:3:d:10.1007_s10551-022-05183-1
    DOI: 10.1007/s10551-022-05183-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-022-05183-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-022-05183-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Olivier Boiral & David Talbot & Marie‐Christine Brotherton, 2020. "Measuring sustainability risks: A rational myth?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2557-2571, September.
    2. Noemi Sinkovics & Samia Ferdous Hoque & Rudolf R. Sinkovics, 2016. "Rana Plaza collapse aftermath: are CSR compliance and auditing pressures effective?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 29(4), pages 617-649, May.
    3. Brendan O'Dwyer & Jeffrey Unerman, 2020. "Shifting the focus of sustainability accounting from impacts to risks and dependencies: researching the transformative potential of TCFD reporting," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 33(5), pages 1113-1141, June.
    4. Adams, Carol A. & Abhayawansa, Subhash, 2022. "Connecting the COVID-19 pandemic, environmental, social and governance (ESG) investing and calls for ‘harmonisation’ of sustainability reporting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 82(C).
    5. Matthias Garschagen, 2013. "Resilience and organisational institutionalism from a cross-cultural perspective: an exploration based on urban climate change adaptation in Vietnam," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 67(1), pages 25-46, May.
    6. Andrea Liesen & Andreas G. Hoepner & Dennis M. Patten & Frank Figge, 2015. "Does stakeholder pressure influence corporate GHG emissions reporting? Empirical evidence from Europe," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 28(7), pages 1047-1074, September.
    7. Gunther Capelle-Blancard & Aurélien Petit, 2019. "Every Little Helps? ESG News and Stock Market Reaction," Journal of Business Ethics, Springer, vol. 157(2), pages 543-565, June.
    8. repec:eme:aaaj00:aaaj-02-2020-4445 is not listed on IDEAS
    9. Dorli Harms & Erik G. Hansen & Stefan Schaltegger, 2013. "Strategies in Sustainable Supply Chain Management: An Empirical Investigation of Large German Companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(4), pages 205-218, July.
    10. Florence Depoers & Thomas Jeanjean & Tiphaine Jérôme, 2016. "Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports," Journal of Business Ethics, Springer, vol. 134(3), pages 445-461, March.
    11. Andrea Liesen & Andreas G. Hoepner & Dennis M. Patten & Frank Figge, 2015. "Does stakeholder pressure influence corporate GHG emissions reporting? Empirical evidence from Europe," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 28(7), pages 1047-1074, September.
    12. repec:eme:aaaj00:aaaj-05-2021-5279 is not listed on IDEAS
    13. Aligica, Paul Dragos, 2013. "Institutional Diversity and Political Economy: The Ostroms and Beyond," OUP Catalogue, Oxford University Press, number 9780199843909.
    14. Tania Bizoumi & Socrates Lazaridis & Natassa Stamou, 2019. "Innovation in Stock Exchanges: Driving ESG Disclosure and Performance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 31(2), pages 72-79, June.
    15. He, Hongwei & Harris, Lloyd, 2020. "The impact of Covid-19 pandemic on corporate social responsibility and marketing philosophy," Journal of Business Research, Elsevier, vol. 116(C), pages 176-182.
    16. Larrinaga, Carlos & Garcia-Torea, Nicolas, 2022. "An ecological critique of accounting: The circular economy and COVID-19," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 82(C).
    17. Yoo, Sunbin & Keeley, Alexander Ryota & Managi, Shunsuke, 2021. "Does sustainability activities performance matter during financial crises? Investigating the case of COVID-19," Energy Policy, Elsevier, vol. 155(C).
    18. Sharma, Amalesh & Adhikary, Anirban & Borah, Sourav Bikash, 2020. "Covid-19′s impact on supply chain decisions: Strategic insights from NASDAQ 100 firms using Twitter data," Journal of Business Research, Elsevier, vol. 117(C), pages 443-449.
    19. Sumit Lodhia & Umesh Sharma & Mary Low, 2021. "Creating value: sustainability and accounting for non-financial matters in the pre- and post-corona environment," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 29(2), pages 185-196, May.
    20. Clementino, Ester & Perkins, Richard, 2020. "How do companies respond to environmental, social and governance (ESG) ratings? Evidence from Italy," LSE Research Online Documents on Economics 103046, London School of Economics and Political Science, LSE Library.
    21. Giulia Leoni & Alessandro Lai & Riccardo Stacchezzini & Ileana Steccolini & Stephen Brammer & Martina Linnenluecke & Istemi Demirag, 2021. "Accounting, management and accountability in times of crisis: lessons from the COVID-19 pandemic," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 34(6), pages 1305-1319, July.
    22. Cho, Charles H. & Laine, Matias & Roberts, Robin W. & Rodrigue, Michelle, 2015. "Organized hypocrisy, organizational façades, and sustainability reporting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 78-94.
    23. Chhatwani, Malvika & Mishra, Sushanta Kumar & Varma, Arup & Rai, Himanshu, 2022. "Psychological resilience and business survival chances: A study of small firms in the USA during COVID-19," Journal of Business Research, Elsevier, vol. 142(C), pages 277-286.
    24. Noemi Sinkovics & Samia Ferdous Hoque & Rudolf R. Sinkovics, 2016. "Rana Plaza collapse aftermath: are CSR compliance and auditing pressures effective?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 29(4), pages 617-649, May.
    25. Vincent G. Whitelock, 2019. "Multidimensional environmental social governance sustainability framework: Integration, using a purchasing, operations, and supply chain management context," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(5), pages 923-931, September.
    26. repec:eme:aaaj00:aaaj-12-2013-1547 is not listed on IDEAS
    27. Lyton Chithambo & Ishmael Tingbani & Godfred Afrifa Agyapong & Ernest Gyapong & Isaac Sakyi Damoah, 2020. "Corporate voluntary greenhouse gas reporting: Stakeholder pressure and the mediating role of the chief executive officer," Business Strategy and the Environment, Wiley Blackwell, vol. 29(4), pages 1666-1683, May.
    28. repec:eme:aaaj00:aaaj-12-2019-4356 is not listed on IDEAS
    29. Breeda Comyns, 2018. "Climate change reporting and multinational companies: Insights from institutional theory and international business," Accounting Forum, Taylor & Francis Journals, vol. 42(1), pages 65-77, March.
    30. Saura, Jose Ramon & Ribeiro-Soriano, Domingo & Zegarra Saldaña, Pablo, 2022. "Exploring the challenges of remote work on Twitter users' sentiments: From digital technology development to a post-pandemic era," Journal of Business Research, Elsevier, vol. 142(C), pages 242-254.
    31. Jeremy Galbreath, 2013. "ESG in Focus: The Australian Evidence," Journal of Business Ethics, Springer, vol. 118(3), pages 529-541, December.
    32. Ferrannini, Andrea & Barbieri, Elisa & Biggeri, Mario & Di Tommaso, Marco R., 2021. "Industrial policy for sustainable human development in the post-Covid19 era," World Development, Elsevier, vol. 137(C).
    33. repec:eme:aaaj00:aaaj-07-2015-2141 is not listed on IDEAS
    34. Jie Zhang & Baoheng Feng & Yina Wu & Pengpeng Xu & Ruimin Ke & Ni Dong, 2021. "The effect of human mobility and control measures on traffic safety during COVID-19 pandemic," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-9, March.
    35. Judy Ryan & Demi Tiller, 2022. "A Recent Survey of GHG Emissions Reporting and Assurance," Australian Accounting Review, CPA Australia, vol. 32(2), pages 181-187, June.
    36. Faizul Haque & Collins G Ntim, 2018. "Environmental Policy, Sustainable Development, Governance Mechanisms and Environmental Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(3), pages 415-435, March.
    37. Chitra Sriyani De Silva Lokuwaduge & Kumudini Heenetigala, 2017. "Integrating Environmental, Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 438-450, May.
    38. Florence Depoers & Thomas Jeanjean & Tiphaine Jerome, 2016. "Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports," Post-Print hal-01735774, HAL.
    39. Noor Muhammad & Frank Scrimgeour & Krishna Reddy & Sazali Abdin, 2016. "Emission Indices for Hazardous Substances: An Alternative Measure of Corporate Environmental Performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(1), pages 15-26, January.
    40. Baker, C. Richard, 2014. "Breakdowns of accountability in the face of natural disasters: The case of Hurricane Katrina," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(7), pages 620-632.
    41. Olivier Boiral & David Talbot & Marie-Christine Brotherton & Iñaki Heras-Saizarbitoria, 2021. "Sustainability rating and moral fictionalism: opening the black box of nonfinancial agencies," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 34(8), pages 1740-1768, April.
    42. Lai, Alessandro & Leoni, Giulia & Stacchezzini, Riccardo, 2014. "The socializing effects of accounting in flood recovery," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(7), pages 579-603.
    43. Jill Frances Atkins & Aris Solomon & Simon Norton & Nathan Lael Joseph, 2015. "The emergence of integrated private reporting," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 23(1), pages 28-61, April.
    44. Dillard, Jesse & Vinnari, Eija, 2017. "A case study of critique: Critical perspectives on critical accounting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 43(C), pages 88-109.
    45. Cheng, Louis T.W. & Sharma, Piyush & Shen, Jianfu & Ng, Allen C.C., 2021. "Exploring the dark side of third-party certification effect in B2B relationships: A professional financial services perspective," Journal of Business Research, Elsevier, vol. 127(C), pages 123-136.
    46. Natalia Semenova & Lars Hassel, 2015. "On the Validity of Environmental Performance Metrics," Journal of Business Ethics, Springer, vol. 132(2), pages 249-258, December.
    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. Alan Kai Ming Au & Yi-Fan Yang & Huan Wang & Rui-Hong Chen & Leven J. Zheng, 2023. "Mapping the Landscape of ESG Strategies: A Bibliometric Review and Recommendations for Future Research," Sustainability, MDPI, vol. 15(24), pages 1-26, December.

    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. Dong Ding & Bin Liu & Millicent Chang, 2023. "Carbon Emissions and TCFD Aligned Climate-Related Information Disclosures," Journal of Business Ethics, Springer, vol. 182(4), pages 967-1001, February.
    2. Simon Döring & Wolfgang Drobetz & Sadok El Ghoul & Omrane Guedhami & Henning Schröder, 2023. "Foreign Institutional Investors, Legal Origin, and Corporate Greenhouse Gas Emissions Disclosure," Journal of Business Ethics, Springer, vol. 182(4), pages 903-932, February.
    3. Tiberio Daddi & Niccolò Maria Todaro & Maria Rosa De Giacomo & Marco Frey, 2018. "A Systematic Review of the Use of Organization and Management Theories in Climate Change Studies," Business Strategy and the Environment, Wiley Blackwell, vol. 27(4), pages 456-474, May.
    4. Ismail N.B. & Sébastien Alcouffe & Galy N & Ceulemans K, 2020. "The impact of international sustainability initiatives on Life Cycle Assessment voluntary disclosures: The case of France’s CAC40 listed companies," Post-Print hal-03082800, HAL.
    5. Bikki Jaggi & Alessandra Allini & Riccardo Macchioni & Annamaria Zampella, 2018. "Do investors find carbon information useful? Evidence from Italian firms," Review of Quantitative Finance and Accounting, Springer, vol. 50(4), pages 1031-1056, May.
    6. Olivier Boiral & Marie‐Christine Brotherton & Léo Rivaud & David Talbot, 2022. "Comparing the uncomparable? An investigation of car manufacturers' climate performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2213-2229, July.
    7. Evangeline O. Elijido-Ten & Peter Clarkson, 2019. "Going Beyond Climate Change Risk Management: Insights from the World’s Largest Most Sustainable Corporations," Journal of Business Ethics, Springer, vol. 157(4), pages 1067-1089, July.
    8. Clementino, Ester & Perkins, Richard, 2020. "How do companies respond to environmental, social and governance (ESG) ratings? Evidence from Italy," LSE Research Online Documents on Economics 103046, London School of Economics and Political Science, LSE Library.
    9. Zabihollah Rezaee & Ling Tuo, 2019. "Are the Quantity and Quality of Sustainability Disclosures Associated with the Innate and Discretionary Earnings Quality?," Journal of Business Ethics, Springer, vol. 155(3), pages 763-786, March.
    10. Maida Hadziosmanovic & Shannon M. Lloyd & Anders Bjørn & Raymond L. Paquin & Nadine Mengis & H. Damon Matthews, 2022. "Using cumulative carbon budgets and corporate carbon disclosure to inform ambitious corporate emissions targets and long‐term mitigation pathways," Journal of Industrial Ecology, Yale University, vol. 26(5), pages 1747-1759, October.
    11. Zahra Borghei, 2021. "Carbon disclosure: a systematic literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5255-5280, December.
    12. Walaa Wahid ElKelish*, 2023. "Accounting for Corporate Human Rights: Literature Review and Future Insights," Australian Accounting Review, CPA Australia, vol. 33(2), pages 203-226, June.
    13. Perera, Luckmika & Jubb, Christine & Gopalan, Sandeep, 2019. "A comparison of voluntary and mandated climate change-related disclosure," Journal of Contemporary Accounting and Economics, Elsevier, vol. 15(2), pages 243-266.
    14. Rainer Kasperzak & Marko Kureljusic & Lucas Reisch & Simon Thies, 2023. "Accounting for Carbon Emissions—Current State of Sustainability Reporting Practice under the GHG Protocol," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    15. Carolina Almeida Cruz & Florinda Matos, 2023. "ESG Maturity: A Software Framework for the Challenges of ESG Data in Investment," Sustainability, MDPI, vol. 15(3), pages 1-18, February.
    16. Kanwalroop K. Dhanda & Joseph Sarkis & Dileep G. Dhavale, 2022. "Institutional and stakeholder effects on carbon mitigation strategies," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 782-795, March.
    17. Ester Clementino & Richard Perkins, 2021. "How Do Companies Respond to Environmental, Social and Governance (ESG) ratings? Evidence from Italy," Journal of Business Ethics, Springer, vol. 171(2), pages 379-397, June.
    18. Rodrigo Zeidan, 2022. "Why don't asset managers accelerate ESG investing? A sentiment analysis based on 13,000 messages from finance professionals," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3028-3039, November.
    19. Thomas Gutmayer & Dannielle Cerbone & Warren Maroun, 2022. "An Evaluation of Business Model Disclosures in Integrated Reports," Australian Accounting Review, CPA Australia, vol. 32(2), pages 220-237, June.
    20. Olivier Boiral & Marie-Christine Brotherton & Léo Rivaud & Laurence Guillaumie, 2021. "Organizations’ Management of the COVID-19 Pandemic: A Scoping Review of Business Articles," Sustainability, MDPI, vol. 13(7), pages 1-20, April.

    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:kap:jbuset:v:185:y:2023:i:3:d:10.1007_s10551-022-05183-1. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.