Showing papers on "Corporate governance published in 2022"

Climate Change and Land

Abstract: The Intergovernmental Panel on Climate Change (IPCC) is the leading international body for assessing the science related to climate change. It provides policymakers with regular assessments of the scientific basis of human-induced climate change, its impacts and future risks, and options for adaptation and mitigation. This IPCC Special Report on Climate Change and Land (SRCCL) is the most comprehensive and up-to-date scientific assessment of the multiple interactions between climate change and land, assessing climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems. It assesses the options for governance and decision-making across multiple scales. It serves policymakers, decision makers, stakeholders, and all interested parties with unbiased, up-to-date, policy-relevant information. This title is also available as Open Access on Cambridge Core.

Aggregate Confusion: The Divergence of ESG Rating

Abstract: This paper investigates the divergence of environmental, social, and governance (ESG) ratings based on data from six prominent ESG rating agencies: KLD, Sustainalytics, Moody’s ESG (Vigeo-Eiris), S&P Global (RobecoSAM), Refinitiv (Asset4), and MSCI. We document the rating divergence and map the different methodologies onto a common taxonomy of categories. Using this taxonomy, we decompose the divergence into contributions of scope, measurement, and weight. Measurement contributes 56% of the divergence, scope 38%, and weight 6%. Further analyzing the reasons for measurement divergence, we detect a rater effect where a rater’s overall view of a firm influences the measurement of specific categories. The results call for greater attention to how the data underlying ESG ratings are generated.

Ten facts about land systems for sustainability

Abstract: Land use is central to addressing sustainability issues, including biodiversity conservation, climate change, food security, poverty alleviation, and sustainable energy. In this paper, we synthesize knowledge accumulated in land system science, the integrated study of terrestrial social-ecological systems, into 10 hard truths that have strong, general, empirical support. These facts help to explain the challenges of achieving sustainability in land use and thus also point toward solutions. The 10 facts are as follows: 1) Meanings and values of land are socially constructed and contested; 2) land systems exhibit complex behaviors with abrupt, hard-to-predict changes; 3) irreversible changes and path dependence are common features of land systems; 4) some land uses have a small footprint but very large impacts; 5) drivers and impacts of land-use change are globally interconnected and spill over to distant locations; 6) humanity lives on a used planet where all land provides benefits to societies; 7) land-use change usually entails trade-offs between different benefits—"win–wins" are thus rare; 8) land tenure and land-use claims are often unclear, overlapping, and contested; 9) the benefits and burdens from land are unequally distributed; and 10) land users have multiple, sometimes conflicting, ideas of what social and environmental justice entails. The facts have implications for governance, but do not provide fixed answers. Instead they constitute a set of core principles which can guide scientists, policy makers, and practitioners toward meeting sustainability challenges in land use.

The effects of economic policy uncertainty and country governance on banks' liquidity creation: International evidence

Abstract: This study empirically investigates the effects of economic policy uncertainty (EPU) and country governance on bank liquidity creation in various countries. Using the cross-country bank data, we find that EPU harms asset-side liquidity creation and benefits liability-side liquidity creation. The results reveal that uncertainty hinders bank credit, and people tend to make deposits in banks for safety. Moreover, country governance mitigates the negative impact of EPU on bank liquidity creation. Our results are robust in the subsample, two-stage least squares regression, and generalized method of moments analyses. Overall, our findings have crucial policy implications for policy makers and bankers.

Composite fiscal decentralisation and green innovation: Imperative strategy for institutional reforms and sustainable development in OECD countries

Abstract: Improving environmental quality and fiscal management has become one of the utmost imperative policy agendas for sustainable development. Although many studies explore multiple deriving factors of environmental sustainability; however, very little is known regarding the impact of composite (revenue and expenditure) fiscal decentralisation (FD) on environmental quality. Manifestly, the intergovernmental fiscal relations advocate to ensure the alignment of tax and spending powers to promote sustainable and inclusive growth. Therefore, we explore the asymmetric linkages between composite FD, green innovation, institutional governance and carbon emissions in 32 OECD countries. Our preliminary results confirm non-linearity and structural changes in data, which instigate us to apply the asymmetric method of moments quantile regression. The overall findings exhibit that composite FD significantly mitigates carbon emissions only at medium to higher (5th–9th) emissions quantiles. In contrast, green innovation reduces carbon emissions from lower to medium (1st–5th) emissions quantiles. Institutional reforms promote environmental sustainability across all emissions quantiles (1st–9th). Interestingly, the emissions-reducing effect of composite FD, green innovation and institutional governance is highest for higher emissions quantiles and lowest for lower emissions quantiles. These results provide valuable policy recommendations for all stakeholders.

Scientific evidence on the political impact of the Sustainable Development Goals

Abstract: Abstract In 2015, the United Nations agreed on 17 Sustainable Development Goals as the central normative framework for sustainable development worldwide. The effectiveness of governing by such broad global goals, however, remains uncertain, and we lack comprehensive meta-studies that assess the political impact of the goals across countries and globally. We present here condensed evidence from an analysis of over 3,000 scientific studies on the Sustainable Development Goals published between 2016 and April 2021. Our findings suggests that the goals have had some political impact on institutions and policies, from local to global governance. This impact has been largely discursive, affecting the way actors understand and communicate about sustainable development. More profound normative and institutional impact, from legislative action to changing resource allocation, remains rare. We conclude that the scientific evidence suggests only limited transformative political impact of the Sustainable Development Goals thus far.

Digitalization and environment governance: does internet development reduce environmental pollution?

Abstract: In the era of information economy, the integration of the internet and traditional industries is pushing the rapid transformation of the world economy in a more innovative, smarter, and greener direction. Based on the panel data for 30 Chinese provinces for the 2006–2017 period, the level of China’s internet development is comprehensively evaluated using the full array polygon graphic index method. The spatial Durbin model and threshold model are used to empirically analyze the impact of internet development on environmental quality. The results indicate that China’s environmental pollution has a significant spatial spillover effect. Internet development can not only significantly reduce local environmental pollution, but also environmental pollution in neighboring areas. The regression results of the mediation effect indicate that internet development mainly affects environmental pollution by improving technological innovation, industrial upgrading, human capital and financial development. Finally, policy suggestions are proposed from the aspects of strengthening collaborative environmental governance and increasing internet infrastructure investment.

The role of energy democracy and energy citizenship for participatory energy transitions: A comprehensive review

Abstract: Increasingly, scholarly debates and policy developments on citizen participation in energy transitions have included calls for ‘energy democracy’ and active forms of ‘energy citizenship’. The concepts are tightly connected to the debate on energy transition, and the need for a decentralised energy system, based on renewable energy and increased local energy ownership. The two concepts exist in parallel and are sometimes used as synonyms and sometimes with clear distinctions made between them. This spurred an interest to systematically investigate them further. The aim of this paper is to identify similarities and differences between the two concepts and synthesise their contributions to debates on citizen participation in energy transitions. We review the literature thematically, finding that the concepts often refer to participation in domestic energy technologies, energy communities, energy transition movements, and energy policy. Energy citizenship tends to emphasise behaviour change and ways for individuals to participate in energy systems, thereby often focusing on individuals as agents of change. In contrast, energy democracy tends to focus on institutionalisation of new forms of participative governance and often placing collectives as central agents of change. The review also highlights some weaknesses of the literature: a bias towards decentralised energy systems, a lack of attention to representational democracy, and an underrepresentation of studies from outside Europe and North America.

Peer-to-peer, community self-consumption, and transactive energy: A systematic literature review of local energy market models

Abstract: Peer-to-peer, community or collective self-consumption, and transactive energy markets offer new models for trading energy locally. Over the past five years, there has been significant growth in the amount of academic literature examining how these local energy markets might function. This systematic literature review of 139 peer-reviewed journal articles examines the market designs used in these energy trading models. A modified version of the Business Ecosystem Architecture Modelling framework is used to extract market model information from the literature, and to identify differences and similarities between the models. This paper examines how peer-to-peer, community self-consumption and transactive energy markets are described in current literature. It explores the similarities and differences between these markets in terms of participation, governance structure, topology, and design. This paper systematises peer-to-peer, community self-consumption and transactive energy market designs, identifying six archetypes. Finally, it identifies five evidence gaps which require future research before these markets could be widely adopted. These evidence gaps are the lack of: consideration of physical constraints; a holistic approach to market design and operation; consideration about how these market designs will scale; consideration of information security; and, consideration of market participant privacy. • Systematic review of the market models in 139 peer-reviewed journal articles. • Six archetypal market designs and three archetypal price formation mechanisms. • Analysis of the value, scale and participants in P2P, CSC and TE markets. • Discussion of five major research gaps in the field of P2P, CSC and TE markets.

Does environmental, social, and governance performance move together with corporate green innovation in China?

Abstract: This research investigates the bidirectional cointegration relationship between environmental, social, and governance (ESG) performance and corporate green innovation with a panel of 770 Chinese listed firms during the 2011–2020. We find that there exists a long-run bidirectional comovement between ESG performance and corporate green innovation output. ESG performance exerts a short-run and long-run causal link with green innovation output. The panel cointegration test and VECM estimation also support that ESG performance moves together with green innovation output for clean industries, while ESG performance only presents a long-run relationship to green invention patents output for pollution industries. Our findings offer important value for policymakers and enterprises to propose an effective strategy to stimulate green innovation and improve ESG score.

Corporate Social Responsibility and High-quality Development: Do Green Innovation, Environmental Investment and Corporate Governance Matter?

Abstract: Under the network public opinion ecology in the Omni-media Era, corporate social responsibility (CSR) performance can provide important internal and external environmental support for improving corporate development quality. Based on the data of Chinese listed companies from 2010 to 2019, this paper evaluates the impact and mechanism of CSR on corporate high-quality development. The results show that CSR significantly promotes the improvement of corporates’ development quality. The results remain robust in altering variables, controlling more urban and corporate-level variables, and solving endogeneity. Mechanism analysis indicates that CSR can promote the high-quality development of corporates by improving green innovation, environmental investment, and corporate governance. Heterogeneity analysis shows that the incentive effect of CSR on corporate high-quality development is more obvious in non-state-owned corporates and when the market is in a “bull market.” This paper provides feasible ideas for adjusting the operating behavior of Chinese listed companies and government policy orientation.

Understanding the effects of Environment, Social, and Governance conduct on financial performance: Arguments for a process and integrated modelling approach

Abstract: To date, an overwhelming number of research findings on Environment, Social, and Governance (ESG) conduct and financial performance remains inconclusive. Furthermore, research has not identified nor explained the “underlying mechanisms” behind this relationship. To encourage future research, we discuss the mechanisms by identifying the first-order, mediating, and moderating variables. We synthesize recent studies for emerging themes and implications; argue for a process and integrated approach for modelling causality between ESG conduct and financial performance variables; and suggest methods to analyze the models. We also advocate for researchers to explore the idea that balancing corporate conduct among the E, S, and G components may provide revelations about financial performance. We also discuss how incorporating “greenwashing” in a process and integrated model may explain the ESG conduct and financial performance link, or more than likely the lack of it.

Sustainable development, ESG performance and company market value: Mediating effect of financial performance

Abstract: At present, more and more attention is paid to the sustainable development of enterprises. In particular, in the context of frequent financial crises and COVID-19 pandemic, how the performance of listed companies' environmental, social, and governance (ESG) affects the company's market value has attracted widespread attention. Different from existing studies, this paper takes financial performance as a mediating variable and constructs linear regression model and mediating effect model based on analyzing the relationship between ESG performance, financial performance, and company market value and their influencing mechanism. The ESG rating data of Chinese listed companies newly developed by SynTao Green Finance from 2014 to 2019 were selected for empirical test. The results show that the improvement of ESG performance of listed companies can improve the market value of the company, and the financial performance of the company presents an obvious mediating effect. At the same time, operational capacity is an important mediating way for ESG performance to affect the company's market value. Further research shows that ESG performance of state-owned listed companies exerts a stronger mediating effect on corporate operating capacity. Finally, this paper provides relevant suggestions for regulators, listed companies, and investors.

Green Credit Policy, Institution Supply and Enterprise Green Innovation

Abstract: Green credit policy (GCP) relies on financial means to promote environmental governance. Whether it can achieve the dual goals of economic development and environmental protection, especially in the context of different institution supply, remains to be scientifically tested. Taking the implementation of China's green credit guidelines in 2012 as a quasi-natural experiment, this study uses the panel data of China's A-share listed companies from 2009 to 2019 to explore the impact of GCP on the green technology innovation of heavily polluting enterprises and the role of institution supply in it. It is found that the GCP plays a significant role in promoting the green innovation of heavily polluting enterprises, and the conclusion is still valid after a series of robustness tests. Further analysis finds that the supply of environmental protection system by local governments can strengthen the green innovation effect of GCP. However, the institution supply of innovation has not yet released a significant positive impact. In addition, the impact of GCP on green innovation of heavily polluting enterprises shows significant heterogeneity due to the differences in the types of green patents, the nature of enterprise property rights and the level of regional financial development. This paper analyzes the policy effect of green credit from the perspective of micro-enterprise green innovation, and brings the institution supply of local government into the analysis framework, so as to clarify the relationship between green credit and green innovation on the one hand. At the same time, it also provides inspiration for local governments to scientifically issue environmental protection policies.