IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i16p12450-d1218428.html

The Effect of Company Ownership on the Environmental Practices in the Supply Chain: An Empirical Approach

Author

Listed:
  • Liliana Rivera

    (School of Management, Universidad de los Andes, Bogotá 111711, Colombia)

  • Norma Ortiz

    (School of Management, Universidad de los Andes, Bogotá 111711, Colombia)

  • Gabriel Moreno

    (School of Management, Universidad de los Andes, Bogotá 111711, Colombia)

  • Iliana Páez-Gabriunas

    (School of Administration, Universidad del Rosario, Bogotá 110111, Colombia)

Abstract

Investors are increasingly drawn to ESG-based investing because they seek well-run businesses, believing that companies integrating ESG factors are better managed. However, the impact of company ownership on environmental performance remains unclear. This study aims to address this gap by examining the relationship between company ownership and company interest in measuring the environmental impact of its supply chains, as the environmental aspect is directly linked to supply chain activities and has quantifiable measures. Using random effects ordered logistic regression on panel data from 2017 to 2022 for 2811 companies, we show that companies with long-term investment sources demonstrate a greater interest in measuring environmental variables in their supply chain compared to those financed with short-term investments. Sovereign wealth funds and other long-term investment sources exhibit a positive and significant correlation with higher utilization of ESG indicators in the supply chain. These findings suggest that policymakers and private companies aiming to enhance sustainability should prioritize longer-term investment sources, which display stronger commitments to sustainability and ESG practices and are more likely to use environmental initiatives in their supply chains.

Suggested Citation

  • Liliana Rivera & Norma Ortiz & Gabriel Moreno & Iliana Páez-Gabriunas, 2023. "The Effect of Company Ownership on the Environmental Practices in the Supply Chain: An Empirical Approach," Sustainability, MDPI, vol. 15(16), pages 1-24, August.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:16:p:12450-:d:1218428
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/16/12450/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/16/12450/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rajna Gibson Brandon & Simon Glossner & Philipp Krueger & Pedro Matos & Tom Steffen, 2022. "Do Responsible Investors Invest Responsibly? [Why and how investors use ESG information: evidence from a global survey]," Review of Finance, European Finance Association, vol. 26(6), pages 1389-1432.
    2. Gold, Stefan & Hahn, Rüdiger & Seuring, Stefan, 2013. "Sustainable supply chain management in “Base of the Pyramid” food projects—A path to triple bottom line approaches for multinationals?," International Business Review, Elsevier, vol. 22(5), pages 784-799.
    3. Zheng, Zuduo & Liu, Zhiyuan & Liu, Chuanli & Shiwakoti, Nirajan, 2014. "Understanding public response to a congestion charge: A random-effects ordered logit approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 117-134.
    4. Sakis Kotsantonis & Chris Pinney & George Serafeim, 2016. "ESG Integration in Investment Management: Myths and Realities," Journal of Applied Corporate Finance, Morgan Stanley, vol. 28(2), pages 10-16, June.
    5. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    6. Dan Ariely & Anat Bracha & Stephan Meier, 2009. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," American Economic Review, American Economic Association, vol. 99(1), pages 544-555, March.
    7. Hao Liang & Lin Sun & Melvyn Teo, 2022. "Responsible Hedge Funds [Role of managerial incentives and discretion in hedge fund performance]," Review of Finance, European Finance Association, vol. 26(6), pages 1585-1633.
    8. repec:eme:mfppss:mf-12-2021-0588 is not listed on IDEAS
    9. Wang, Yizhi & Lin, Yongjia & Fu, Xiaoqing & Chen, Songhe, 2023. "Institutional ownership heterogeneity and ESG performance: Evidence from China," Finance Research Letters, Elsevier, vol. 51(C).
    10. Amin Mohseni Cheraghlou, 2017. "Patterns and Trends in Sovereign Wealth Fund Investments: A Post-Crisis Descriptive Analysis," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(4), pages 725-763, Autumn.
    11. Raghunandan, Aneesh & Rajgopal, Shiva, 2022. "Do ESG funds make stakeholder-friendly investments?," LSE Research Online Documents on Economics 115234, London School of Economics and Political Science, LSE Library.
    12. Yupei Liu & Weian Li & Qiankun Meng, 2023. "Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 14(1), pages 184-215, January.
    13. Zhihong Wang & Joseph Sarkis, 2013. "Investigating the relationship of sustainable supply chain management with corporate financial performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 62(8), pages 871-888, October.
    14. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    15. Aibar-Guzmán, Beatriz & Aibar-Guzmán, Cristina & Piñeiro-Chousa, Juan-Ramón & Hussain, Nazim & García-Sánchez, Isabel-María, 2023. "The benefits of climate tech: Do institutional investors affect these impacts?," Technological Forecasting and Social Change, Elsevier, vol. 192(C).
    16. Yupei Liu & Weian Li & Qiankun Meng, 2023. "Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 14(1), pages 184-215, January.
    17. Dyck, Alexander & Lins, Karl V. & Roth, Lukas & Wagner, Hannes F., 2019. "Do institutional investors drive corporate social responsibility? International evidence," Journal of Financial Economics, Elsevier, vol. 131(3), pages 693-714.
    18. Guangyou Zhou & Lian Liu & Sumei Luo, 2022. "Sustainable development, ESG performance and company market value: Mediating effect of financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3371-3387, November.
    19. Aneesh Raghunandan & Shiva Rajgopal, 2022. "Do ESG funds make stakeholder-friendly investments?," Review of Accounting Studies, Springer, vol. 27(3), pages 822-863, September.
    20. Dietrich Earnhart & Lubomír Lízal, 2007. "Direct and Indirect Effects of Ownership on Firm-Level Environmental Performance," Eastern European Economics, Taylor & Francis Journals, vol. 45(4), pages 66-87, August.
    21. Ting-Ting Li & Kai Wang & Toshiyuki Sueyoshi & Derek D. Wang, 2021. "ESG: Research Progress and Future Prospects," Sustainability, MDPI, vol. 13(21), pages 1-28, October.
    22. Lai, Kee-hung & Wong, Christina W.Y., 2012. "Green logistics management and performance: Some empirical evidence from Chinese manufacturing exporters," Omega, Elsevier, vol. 40(3), pages 267-282.
    23. Zhihong Wang & Joseph Sarkis, 2013. "Investigating the relationship of sustainable supply chain management with corporate financial performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 62(8), pages 871-888, October.
    24. Xuemei Xie & Qiwei Zhu & Ruoyi Wang, 2019. "Turning green subsidies into sustainability: How green process innovation improves firms' green image," Business Strategy and the Environment, Wiley Blackwell, vol. 28(7), pages 1416-1433, November.
    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. Yanjie Jiang & Xiaodi Ding & Jing Zhang, 2025. "Toward Environmental Efficiency: Analyzing the Impact of Green Innovation Initiatives in Enterprises," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(2), pages 1206-1223, March.
    2. Majdi Anwar Quttainah & Ankita Pathak & Tarun Soni, 2025. "Configurations of Corporate Governance Mechanisms and Sustainable Development: A Review," Indian Journal of Corporate Governance, , vol. 18(1), pages 38-91, June.

    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. Gibbon, Kayshani & Derwall, Jeroen & Gerritsen, Dirk & Koedijk, Kees, 2025. "Renaming with purpose: Investor response and fund manager behaviour after fund ESG renaming," Journal of International Money and Finance, Elsevier, vol. 152(C).
    2. Li, Suyang & Qiao, Lu & Ren, Boru & Wang, Zilong, 2025. "Financing sustainability: Sustainable institutional investors and bank loan access," Journal of International Money and Finance, Elsevier, vol. 157(C).
    3. Yang, Ge & Tan, Zelong & Zhao, Yiyi, 2026. "Green funds and green innovation in family firms: A perspective of long-term value congruence," Research in International Business and Finance, Elsevier, vol. 81(C).
    4. Fiorillo, Paolo & Santilli, Gianluca, 2024. "The influence of shareholder ESG performance on corporate sustainability: Exploring the role of ownership structure," Finance Research Letters, Elsevier, vol. 67(PA).
    5. Caterina Lucarelli & Sabrina Severini, 2024. "Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4198-4217, July.
    6. Liang, Hao & Ng, Lilian & Yoon, Aaron, 2025. "Editorial: What have we learned about green and climate finance?," The British Accounting Review, Elsevier, vol. 57(5).
    7. Xinhao Qiao & Jinyu He & Xueying Bian & Yan Ling, 2026. "Investee Peers and Corporate Social Responsibility: Evidence from U.S. Listed Firms," Journal of Business Ethics, Springer, vol. 203(1), pages 141-163, January.
    8. Roman Kräussl & Tobi Oladiran & Denitsa Stefanova, 2024. "A review on ESG investing: Investors’ expectations, beliefs and perceptions," Journal of Economic Surveys, Wiley Blackwell, vol. 38(2), pages 476-502, April.
    9. Zhang, Ping & Ma, Binbin & Chi, Chuenyu, 2025. "Institutional investors and ESG performance: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1159-1181.
    10. Mithilesh Gidage & Shilpa Bhide & Yuriy Bilan, 2025. "Greenwashing in the Indian corporate landscape: an empirical assessment of ESG disclosures of NIFTY 50 companies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(9), pages 21861-21885, September.
    11. Li, Qianqian & Watts, Edward M. & Zhu, Christina, 2024. "Retail investors and ESG news," Journal of Accounting and Economics, Elsevier, vol. 78(2).
    12. Zhang, Yanan & Zhang, Xiaoyu, 2024. "Top management team functional diversity and ESG performance," Finance Research Letters, Elsevier, vol. 63(C).
    13. Alona Bilokha & Mingying Cheng & Mengchuan Fu & Iftekhar Hasan, 2025. "Understanding CSR champions: a machine learning approach," Annals of Operations Research, Springer, vol. 347(1), pages 761-774, April.
    14. Natalya Bikmetova & Christo A. Pirinsky, 2026. "Do ESG Rating Agencies Improve ESG Performance?," Journal of Business Ethics, Springer, vol. 204(2), pages 335-365, March.
    15. Fiordelisi, Franco & Ricci, Ornella & Santilli, Gianluca, 2023. "Environmental engagement and stock price crash risk: Evidence from the European banking industry," International Review of Financial Analysis, Elsevier, vol. 88(C).
    16. Tingting Hu & Kun You & Char-Lee Lok, 2025. "State ownership, political connection and ESG performance," Risk Management, Palgrave Macmillan, vol. 27(1), pages 1-33, February.
    17. Cohen, Shira & Kadach, Igor & Ormazabal, Gaizka, 2023. "Institutional investors, climate disclosure, and carbon emissions," Journal of Accounting and Economics, Elsevier, vol. 76(2).
    18. Zhu, Bo & Wang, Yansen, 2024. "Does social trust affect firms' ESG performance?," International Review of Financial Analysis, Elsevier, vol. 93(C).
    19. Yu, Lin & Ye, Jiahui & Yang, Lin, 2025. "From endowed trust to earned trust: Firms located in trusted regions," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    20. Liu, Maotao & Fang, Xubing, 2025. "How does green investor entry affect corporate carbon performance? Evidence from China," Renewable Energy, Elsevier, vol. 244(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:15:y:2023:i:16:p:12450-:d:1218428. 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.