Non-performing loans (NPLs) play a major role in impacting the bank efficiency and credit supply levels (Abdullah et al., 2024; Huljak et al., 2022). The presence of a high NPL ratio among banks indicates poor asset and institutional quality for banks. This, in turn, impacts the lending levels approved by banks. In the modern economy, it is necessary to have a constant lending level, as economic growth depends on it. However, in China, it has been observed that there has been a growth in NPLs and a fall in lending levels. Therefore, it is necessary to understand the impact that NPLs have on the lending levels in banks across China. In order to analyses the same, the paper uses data from Chinese commercial banks between 2010 and 2022. Using a two-way fixed effects (TWFE) and dynamic Arellano-Bond generalized method of moments (GMM) models, it is found that higher NPL ratios significantly reduce loan growth. The results indicate that as the NPLs rise, the asset quality of the bank falls. This leads to a fall in the credit levels as well. Overall, this research highlights the importance of internal financial efficiency in sustaining credit supply and maintaining stability in emerging banking systems.
The transportation sector significantly influences energy utilisation and carbon dioxide emissions; therefore, sustainable transformation is increasingly important for advancing energy efficiency and reducing emissions in Indonesia (Fitriana et al., 2023). Green human resource management (GHRM) and employee competencies are considered strategic factors in enhancing sustainability performance, predominantly through the adoption of green technological innovations that strengthen environmental friendliness (Zihan & Makhbul, 2024). This study examines the impact of GHRM and employee competence on sustainability performance in Indonesia’s transportation sector, with green technological innovation as a mediator. Using an explanatory quantitative approach with purposive sampling, 350 respondents from Indonesia’s transportation sector were involved. The data were analysed using partial least squares structural equation modelling (PLS-SEM). The results demonstrate that both GHRM and employee competency positively and significantly contribute to sustainability performance. In addition, green technology innovations have been shown to mediate the relationship between GHRM, employee competence, and sustainability performance. This study contributes to the development of sustainability literacy by integrating the ability-motivation-opportunity (AMO) framework, employee competencies, and green technology innovations within the transportation sector. This study has implications for companies seeking to develop GHRM practices, strengthen employee competencies, and accelerate the adoption of low-carbon technologies.
Across the eighteen papers in this special issue, a consistent insight emerges: sustainability does not fail because organizations lack commitment, but because the mechanisms that translate commitment into practice remain fragile. Together, the contributions in this special issue provide a strong foundation for advancing sustainability research and practice at the intersection of governance, regulation, and corporate behavior.
Corporate tax avoidance has become an important concern within corporate law, sustainability governance, and regulatory compliance frameworks. Yet, the relationship between environmental, social, and governance (ESG) engagement and firms’ tax behavior remains inconclusive. This study examines whether ESG performance is associated with corporate tax avoidance and investigates whether carbon emissions intensity conditions this relationship within the context of emerging sustainability and environmental regulatory frameworks. Using a panel dataset of globally listed firms in carbon-intensive industries over the period 2018–2024, this study evaluates how sustainability engagement interacts with environmental exposure to shape corporate fiscal behavior and legal compliance with tax obligations. The empirical results indicate that ESG performance is negatively associated with book-tax differences, suggesting that firms with stronger sustainability engagement tend to exhibit lower levels of tax-planning aggressiveness. Furthermore, the interaction analysis shows that carbon emissions intensity significantly moderates the ESG-tax avoidance relationship. In particular, the negative association between ESG performance and tax avoidance appears stronger among firms with higher carbon emissions intensity, indicating that environmental exposure may amplify the alignment between sustainability commitments and corporate legal accountability and fiscal transparency. These findings remain robust across alternative tax-avoidance measures and dynamic panel estimations. Overall, the study contributes to the emerging literature on corporate law, ESG governance, and fiscal transparency by demonstrating that environmental exposure strengthens the alignment between sustainability engagement and corporate compliance with taxation norms.
The study aims to assess the impact of environmental, social, and governance (ESG) practices on bond issuance by listed real estate companies in Vietnam. Using panel data from listed companies on the Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX), the study estimates a pooled logit model with fixed-year effects and robust cluster-standard errors. Two models are estimated, including simultaneous ESG and one-year-lag ESG. The results show that ESG has a positive and statistically significant impact on the probability of bond issuance in both models. These findings suggest that ESG may not only serve as an immediate signal of transparency and governance quality but also as a reputational asset that improves companies’ access to the bond market over time. Based on this, several recommendations are offered for businesses in Vietnam, along with directions for further research.
The Western Balkan countries (WB) have experienced economic growth in recent years; however, deficiencies in human capital development continue to constrain their economic performance. Human capital is widely recognized as a key driver of economic growth (Becker, 1964). This study examines the role of human capital development in shaping economic growth in the WB, with a specific focus on its impact on gross domestic product (GDP) growth. The analysis employs annual panel data for WB over the period 2000–2022, incorporating control variables such as investment rates, trade openness, and institutional quality. Recent evidence highlights the complementarity between education and technological progress in driving growth (Meiwen et al., 2025). Findings provide evidence that human capital development significantly contributes to GDP growth across the region. These effects remain statistically significant after accounting for macroeconomic and institutional factors, confirming the central role of education in driving economic performance. Furthermore, the results indicate that the impact of human capital is conditioned by institutional quality, revealing cross-country heterogeneity within the WB.
This study examines the effects of sustainability reporting, using environmental, social, and governance (ESG) disclosure practices, on banks’ risk-taking and sustainable growth rates (SGR). The study was motivated by the need to provide empirical evidence on the relevance of sustainability reporting in a developing country with a weak institutional framework and limited enforcement. Using ESG disclosure scores data from Bloomberg for banks listed on the Nigerian Stock Exchange (NGX) from 2014 to 2023, we model ESG aggregate and disaggregate dimensions as explanatory variables, with the non-performing loans (NPL) ratio and SGR as dependent variables, based on stakeholder theory. The panel corrected standard error (PCSE) and two-stage least squares (2SLS) models addressed endogeneity issues. Our findings reveal that ESG disclosures have a negative and significant impact on bank risk-taking, with the environmental disclosure dimension having the most substantial effect on improving banks’ asset quality. Also, ESG had a negative and insignificant relationship with the SGR and net interest margin, financial leverage, and net income per employee are positive and significant determinants of sustainable growth. The research contributes to the existing literature on sustainability reporting, providing both theoretical and practical implications amid the growing trend of ESG rollbacks worldwide.
The gender diversity of corporate boards and other sustainability initiatives are topics of debate in today’s business landscape, especially in Europe. While the main theme of corporate sustainability is to achieve a balance between social, environmental, and economic goals, empirical research in carbon-intensive industries remains limited. Against this backdrop, this study examines the influence of board gender diversity of European automotive firms on their emissions-based carbon performance. Drawing on gender socialization and resource dependency theories, this study adopts a dynamic two-stage system generalized method of moments (GMM) model to analyze longitudinal data from 49 publicly listed firms during 2016–2023. The findings reveal a positive, though marginally significant link between board gender diversity and emissions-based carbon performance. Focusing on the automotive industry and employing a distinct emissions-based metric, this study addresses inconsistencies in past literature and emphasizes that the governance-carbon performance relationship is contingent on methodology and industry contexts. Overall, the finding contributes to the growing literature on governance and environmental sustainability and tentatively supports European legislative initiatives promoting women’s representation on boards. This study recommends increasing women’s participation on automotive boards and strategic committees, fostering external collaboration, and supporting the industry’s shift towards carbon neutrality by providing incentives and other funding.
This research examines how corporate governance (CG) and corporate social responsibility (CSR) affect firm value in Indonesia, emphasizing the importance of information quality. Ordinary least squares (OLS) and two-stage least squares (2SLS) estimations of a Cobb-Douglas model were applied to 83 firms listed on the Indonesia Stock Exchange (IDX) (2007–2022). The findings show that the stronger CG and CSR initiatives improved information quality, which in turn enhances firm value. Firms excluded by CSR criteria limit the sample. Strengthening CG oversight and tightening governance and CSR disclosure regulations would improve information quality. One of the few studies linking CG and CSR through a firm’s financial information quality, providing empirical evidence from a developing-country context. The research shows information quality mediates the CG-CSR-firm value relationship and offers policy-relevant recommendations to strengthen governance and disclosure.
This issue of the Corporate Governance and Sustainability Review brings together eighteen studies that, for all the differences in their settings, keep returning to a single question. The research reaches across Albania, Vietnam, Indonesia, China, the Philippines, Thailand, Saudi Arabia, Nigeria, India, the Western Balkans and the European automotive sector, and yet a common concern runs through it: the gap between recognising sustainability and embedding it in the way organisations and institutions actually decide. The evidence suggests that sustainability rarely fails for want of commitment. It falters when that commitment is not carried through into governance mechanisms, accounting and audit practice, technological competence and human capability. Read in this way, the issue does more than record outcomes. It examines the conditions under which sustainability intentions become substantive and credible.
Despite extensive research on the technology acceptance model (TAM), limited attention has been given to how students’ perceptions of technology translate into innovative educational outcomes that support sustainable strategic management (SSM). The research aims to examine the effect of perceived ease of use (PEOU) and perceived usefulness (PU) on innovation in accounting education and to further investigate the mediating role of innovation in accounting education in the relation between PEOU, PU, and SSM among accounting students across Bachelor’s, Master’s, and PhD programs at Tikrit University in Iraq. This research adopts a quantitative research methodology, collecting data in 2025 from a purposive sample of 96 accounting students through a structured survey instrument. The results indicate that PEOU has a positive and statistically significant effect on innovation in accounting education. The analysis revealed that PU has a statistically insignificant effect on innovation in accounting education. The mediation analysis revealed that the relationship between PEOU and SSM is significantly moderated by innovation in accounting education. This study makes an original contribution by empirically integrating the TAM with SSM through the mediating mechanism of innovation in accounting education, an underexplored linkage in prior studies. Practically, the findings suggest that universities should prioritize user-friendly digital tools and innovation-driven pedagogies, such as simulations and sustainability-based accounting projects, to enhance students’ engagement and strategic sustainability awareness. By demonstrating how accessible digital technologies foster both educational innovation and sustainability competencies, this research contributes to advancing scholarship at the intersection of technology adoption, accounting education, and sustainable strategy while offering actionable insights for curriculum development.
Financial auditors increasingly encounter sustainability-related information that may influence financial audit risk, yet little is known about how such information is incorporated into audits in developing countries. This study examines how Indonesian auditors apply sustainability risks within the audit risk model and introduces the concept of the risk translation gap-the disconnect between recognizing sustainability risks and integrating them into audit procedures. Using an interpretive qualitative approach, the study draws on 15 interviews with auditors from Big Four and non-Big Four firms to explore how mandatory disclosures under the Financial Services Authority Regulation No. 51 (POJK 51) are operationalized. Findings reveal persistent audit decoupling: auditors acknowledge that sustainability risks can affect going concern, impairment, and misstatement risk, but struggle to translate these risks into substantive testing due to weak regulatory enforcement, low-quality disclosures, and limited methodological guidance. Big Four firms show more structured proceduralizing, while non-Big Four auditors rely heavily on ad-hoc judgment, creating inconsistency across the profession. The study advances auditing theory by showing how the risk translation gap prevents sustainability risks from entering audit planning in weak enforcement contexts, contrasting with practices in developed countries (Chiang & Northcott, 2012; Tuo et al., 2023), and provides guidance for standard setters to strengthen sustainability-related audit work.
This study analyses the interrelationship between entrepreneurial leadership, ethical climate, and sustainable university identity, and their effects on entrepreneurial practice within higher education institutions. Grounded in institutional theory and the entrepreneurial university framework (Audretsch, 2014; Etzkowitz & Klofsten, 2005), the study aims to clarify the role of internal governance mechanisms in shaping sustainability-oriented entrepreneurial outcomes. Data were collected through a structured survey of 391 lecturers and administrative staff at Universitas Negeri Semarang, Indonesia, and the proposed relationships were assessed using confirmatory factor and structural equation modelling (SEM) techniques. The findings indicate that entrepreneurial leadership does not have a direct effect on entrepreneurial practice; however, its influence becomes significant when mediated by sustainable university identity. Ethical climate shows a direct positive effect on entrepreneurial practice, but does not exert an indirect effect through sustainable university identity. These results highlight the central role of institutional identity in translating leadership value into sustainability-oriented entrepreneurial actions. The study contributes to the literature on sustainable university governance by demonstrating that the integration of entrepreneurial leadership and ethical climate strengthens a higher education institution’s commitment to sustainability and reinforces its identity as an agent of sustainable development within the higher education sector.
This study examines the determinants of fraudulent financial reporting in Indonesia’s insurance companies by applying the fraud hexagon theory alongside agency theory to provide a wider perspective on fraud in non-bank financial institutions. The analysis covers 18 insurance companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2024, resulting in 90 firm-year observations. The data were obtained from the Refinitiv database and the company’s annual reports. Partial least squares structural equation modeling (PLS-SEM) was applied to evaluate the measurement and structural models. The results show that financial position and ineffective monitoring have a significant positive effect on fraudulent financial reporting. These findings suggest that liquidity pressure and weak governance structure play central roles in enabling fraud within insurance firms. However, the findings of this study diverge from prior research, as financial target, financial stability, changes in director, related-party transactions (RPTs), the nature of the industry, auditor change, and the frequency of chief executive officer (CEO) pictures do not exhibit statistically significant effects, in contrast to earlier studies that reported significance. This suggests that commonly used fraud predictors may not be universally applicable, particularly in the insurance industry, where regulatory environments and business characteristics differ. This study highlights the need to strengthen governance and oversight functions within the insurance company. The study also expands the application of the fraud hexagon framework in the insurance context and contributes empirical evidence on the drivers of fraud within Indonesia’s financial services companies.
This study examines the relationship between environmental, social and governance (ESG) risk ratings and earnings management (EM) in 450 United Kingdom (UK) listed companies in 2024, taking firm size as a moderator. Based on the cross-sectional regression analysis and discretionary estimated accruals via the modified Jones model, the results show a statistically weak relationship between ESG ratings and EM. Contrary to a significant part of the previous literature that records an inverse relationship between ESG performance and earnings manipulation, the findings indicate that ESG ratings in the UK do not translate into earnings quality. Moreover, firm size does not have a direct influence on the EM; neither does it moderate the relationship between ESG and EM. The findings are relevant to the sustainability literature as they indicate the complexity of ESG performance and earnings quality, suggesting that ESG ratings are limited in terms of predicting financial reporting integrity in developed regulatory contexts.
In the era of digital transformation and increasing sustainability demands, corporate governance has become a critical factor in creating company value (Uddin et al., 2021). This phenomenon is not only occurring at the global level but also in Indonesia, where companies are beginning to adopt digital corporate governance (DCG) practices and focus on environmental, social, and governance (ESG) performance as part of their business strategy (Uzliawati et al., 2023). This study investigates the impact of corporate governance structures, technological innovation, and sustainability performance on firm value among publicly listed companies in Indonesia. The analysis, employing structural equation modelling-partial least squares (SEM-PLS), is based on a sample of 120 firms spanning the period from 2020 to 2024. The findings reveal that robust governance mechanisms and digital innovation significantly enhance sustainability outcomes, which in turn positively influence firm value. These results underscore the strategic importance of aligning governance practices with innovation and ESG initiatives to drive long-term value creation. The study contributes to the literature on emerging markets by highlighting the role of integrated governance and innovation frameworks in enhancing corporate performance. Practical implications are presented for policymakers and corporate leaders seeking to enhance governance and foster sustainable digital transformation.
The study addresses the lack of a coherent methodological framework for systematically auditing environmental, social, and governance (ESG) topics in organisations. By shifting the focus from ESG reporting outcomes to diagnostic verification of ESG-related risks, the study contributes a methodological perspective that is largely absent from prior research. The aim is to propose a methodological audit model that verifies ESG topics diagnostically in organisations. A mixed-methods approach was employed, combining a literature review, content analysis of specialised sources, and a computer-assisted web interview (CAWI) based quantitative survey. The quantitative part of the research is based on responses from a statistical sample of 307 internal auditors who assessed the probability and financial impact of 29 ESG-related risks. A three-phase diagnostic audit model was developed, which categorises ESG risks, optimises their granularity, and defines universal diagnostic points for verification. The model was created to address growing regulatory and managerial demands for transparent, reliable, and risk-oriented ESG verification. The proposed model provides a modern, empirically validated approach that helps auditors determine which ESG risks to audit, how deeply to audit them, and how to verify them diagnostically.
This study presents a bibliometric analysis of the evolving research landscape at the intersection of digital technology, corporate reporting, and disclosure practices. Analysing data from Web of Science, Scopus, and Dimensions (2015–2024), this study maps the intellectual structure of the field through citation, co-citation, and co-authorship networks, as well as keyword co-occurrence. Our findings reveal a significant academic shift toward digital themes, yet a persistent dominance of traditional domains such as financial reporting and governance. Notably, critical areas such as digital transformation, data analytics, risk management, and stakeholder engagement remain markedly underrepresented. This disconnect suggests a misalignment between scholarly focus and the practical challenges corporations face. The key implication of this work is that a significant realignment of research priorities is urgently needed to address critical practical challenges and ensure the relevance of academic output in the digital age. This study provides a comprehensive map of the field’s evolution and issues an urgent call for research to bridge the identified gap. The objective of this future work must be to transform corporate disclosures, making them resilient, technologically advanced (e.g., via interactive dashboards and blockchain audit trails), and directly responsive to a diverse array of stakeholders.
Despite the growing emphasis on sustainability in manufacturing enterprises by Ferrazzi et al. (2025), the mechanisms through which strategic environmental capabilities translate into sustainable performance remain insufficiently understood. This study investigates how managers’ perceptions of integrated environmental policy, ecosystem adaptability and strategic environment (EASE), and green intellectual capital (GIC) influence perceived sustainable performance. It further examines the mediating role of green accounting management and the moderating role of institutional pressure. Survey data from 333 managers indicate that all examined perceptions significantly enhance sustainable performance. Integrated environmental policy emerges as the strongest driver and operates through both direct effects and indirect effects via green accounting management, demonstrating the centrality of governance mechanisms in converting environmental strategy into tangible outcomes. EASE also contributes positively, reflecting the importance of organizational flexibility in sustainability enhancement. The findings related to GIC reinforce the resource-based view (RBV) by identifying green knowledge as a key intangible asset whose impact becomes stronger when coordinated through governance mechanisms, consistent with resource orchestration theory (ROT). Institutional pressure amplifies the effect of green accounting management on sustainable performance, underscoring the role of external governance conditions. The study extends theoretical insights into sustainability-oriented governance and offers practical implications for enterprises seeking to strengthen sustainable performance.
This study examines how sustainability governance influences sustainability strategies and how these strategies subsequently affect sustainability performance in Southeast Asian public companies. Sustainability governance is operationalized using two Refinitiv Eikon proxies: the presence of a sustainability committee and the use of sustainability assurance. Sustainability strategy is measured using the corporate social responsibility (CSR) strategy score, while sustainability performance is captured through Refinitiv’s environmental, social, and governance (ESG) score, a disclosure-based indicator widely used in prior research (Ma, 2024; Ghinizzini et al., 2025). The sample included 255 listed firms from Indonesia, Malaysia, Singapore, and Thailand. Descriptive statistics and analysis of variance (ANOVA) identify cross-country and industry differences, and structural equation modelling (SEM) with path analysis tests the hypothesized relationships. The results showed that governance mechanisms support the development of sustainability strategies, which subsequently enhance sustainability performance. These findings are consistent with agency and legitimacy theories and highlight the need for more standardized and substantive sustainability governance practices across the region.
