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Innovation over ESG Performance? The Trade-Offs of STEM Leadership in Top Sustainable Firms

Author

Listed:
  • Iman Harymawan

    (Department of Accounting, Faculty of Economics and Business, Universitas Airlangga, Surabaya 60286, Indonesia
    Center for Environmental Social and Governance Studies (CESGS), Universitas Airlangga, Surabaya 60286, Indonesia)

  • Doddy Setiawan

    (Department of Accounting, Faculty of Economics and Business, Universitas Sebelas Maret, Surakarta 57126, Indonesia)

  • Desi Adhariani

    (Department of Accounting, Faculty of Economics and Business, Universitas Indonesia, Depok 16425, Indonesia)

  • Atikah Azmi Ridha Paramayuda

    (Department of Accounting, Faculty of Economics and Business, Universitas Airlangga, Surabaya 60286, Indonesia
    Center for Environmental Social and Governance Studies (CESGS), Universitas Airlangga, Surabaya 60286, Indonesia)

Abstract

Considered as innovation-oriented, this research was conducted to examine whether STEM-educated CEOs drive better ESG performance. Using OLS regression, this research was conducted using listed companies assessed for their ESG performance on Sustainalytics in 2022 and identified as “top sustainable companies”, encompassing 1039 observations. The findings of this research reveal that STEM-educated CEOs are negatively associated with ESG performance in the top sustainable companies. Robustness analysis was also conducted to prevent endogeneity issues. This study introduces the novel idea of strategic trade-offs in ESG leadership. While STEM leaders drive innovation, their focus might lead to underinvestment in other crucial ESG aspects within already-sustainable firms. In addition, this research offers a contribution to governance and ESG research by bringing new insight on CEO selection for top ESG companies to better consider a balanced skillset beyond technological solutions.

Suggested Citation

  • Iman Harymawan & Doddy Setiawan & Desi Adhariani & Atikah Azmi Ridha Paramayuda, 2025. "Innovation over ESG Performance? The Trade-Offs of STEM Leadership in Top Sustainable Firms," JRFM, MDPI, vol. 18(7), pages 1-22, July.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:7:p:372-:d:1695310
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    References listed on IDEAS

    as
    1. Finja Lena Kind & Jennifer Zeppenfeld & Rainer Lueg, 2023. "The impact of chief executive officer narcissism on environmental, social, and governance reporting," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4448-4466, November.
    2. Kong, Dongmin & Liu, Boyang & Zhu, Ling, 2023. "Stem CEOs and firm digitalization," Finance Research Letters, Elsevier, vol. 58(PC).
    3. Andreas Wagner & Denise Fischer‐Kreer, 2024. "The role of CEO regulatory focus in increasing or reducing corporate carbon emissions," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1051-1065, February.
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