ABSTRACT Although environmental, social, and governance (ESG) disclosure–performance (in)congruence has attracted growing attention, its impact on open innovation remains underexplored. Drawing on signaling theory, we hypothesize that when ESG disclosure and ESG performance are congruent, open innovation increases as both rise in tandem. When they are incongruent, performance‐leading decoupling (performance > disclosure) is expected to yield higher open innovation than disclosure‐leading decoupling (disclosure > performance). We further propose that environmental regulatory pressure and red culture amplify these effects. Using an unbalanced firm‐level panel of Chinese A‐share listed companies from 2009 to 2023, we apply polynomial regression and response surface analysis and find support for the hypotheses. This study contributes to ESG and open innovation research by showing how different ESG disclosure–performance configurations shape collaborative innovation outcomes. The findings also offer practical insights into how firms can attract innovation partners by aligning ESG communication with substantive action.
ABSTRACT This study examines how corporate governance and sustainability mechanisms are associated with firm performance in the European food industry, focusing on whether their effects differ across performance dimensions. Using a panel of 602 publicly listed firms from 2014 to 2024 and a dynamic System Generalized Method of Moments (system GMM) approach, the results show that governance mechanisms generate systematic trade‐offs across performance measures. ESG engagement and ISO certifications are negatively associated with operational efficiency, while ISO certifications are positively associated with shareholder profitability. Board‐related governance mechanisms also show heterogeneous effects across ROE, EBITDA margin and PTB. This pattern reflects a governance paradox: practices that strengthen legitimacy, credibility or oversight may also generate coordination, implementation and compliance costs. In contrast, board meeting attendance is the only mechanism consistently associated with improvements in both profitability and operational performance. Overall, governance outcomes vary across performance measures and stakeholders. By analysing multiple governance mechanisms across accounting‐based, operational and market‐based indicators, the study helps explain why prior research reports mixed results. It also contributes to ongoing debates in business ethics by showing that governance and sustainability practices involve trade‐offs rather than uniform benefits. The results suggest that these mechanisms should be assessed across different performance dimensions, rather than through a single metric.
ABSTRACT Business schools increasingly operate within conditions marked by planetary instability and social tension, yet management education remains shaped by growth‐oriented and anthropocentric assumptions. Although Responsible Management Education (RME) has expanded in response to these challenges, a persistent knowing‐doing gap remains, as ethical reflection is not consistently translated into situated responsible action. This paper introduces Reflexive‐Engagement Pedagogy (REP) as a systemic pedagogical framework designed to address this gap by integrating inward ethical reflexivity with outward societal engagement under planetary constraints. Anchored in Intellectual Solidarity, REP articulates the iterative coupling of Critical Reflexivity and Engaged Scholarship through three interrelated mechanisms: integrative grounding, reflexive dislocation, and verification of will. Empirically, the study draws on a qualitative, iterative analysis of a Master's‐level course implemented across three cohorts in a French business school (2020–2023). Combining instructor auto‐ethnography with the analysis of student reflections and social‐innovation project reports, the paper examines learning processes emerging from sustainability projects situated across Global South and Global North contexts. The findings trace how students' reasoning shifts, sometimes incrementally and unevenly, from predominantly technical or instrumental framings toward more reflexive, context‐sensitive, and politically attuned forms of engagement, while also documenting resistance and partial transformation. The paper contributes by advancing a process‐oriented understanding of RME, offering a pedagogical architecture that links reflection and engagement, and reframing management education as a site of planetary responsibility situated within Earth‐system limits.
ABSTRACT This study examines firstly the association between board environmental committees (BECs) and corporate carbon emissions (both direct and indirect forms) among publicly listed European Union firms, and secondly, whether board gender diversity (BGD) acts as a complementary or substitutive governance mechanism. Using a panel dataset of 496 firms over the period 2013–2023, we employ a comprehensive empirical analysis including OLS, fixed‐effects, Generalised Method of Moments (GMM), Two‐Stage Least Squares (2SLS), and Propensity Score Matching (PSM) to address potential endogeneity concerns. Our findings show that both BECs and BGD are independently associated with significantly lower both direct (Scope 1) and indirect (Scope 2) corporate carbon emissions. However, the interaction between BECs and BGD is positive and statistically significant, indicating a substitutive rather than complementary relationship. Grounded in agency and Critical Mass theories, we explain this substitution effect through two forms of governance overlap: ‘cognitive overlap’, whereby gender‐diverse boards already incorporate stakeholder‐oriented and environmentally sensitive monitoring perspectives, and ‘formal overlap’, whereby environmental oversight responsibilities become duplicated across board structures. Such overlapping governance structures may generate process losses or, in extreme cases, redundancy, and reduce the marginal effectiveness of additional monitoring mechanisms. Specifically, once gender diversity approaches a critical mass threshold, the board itself may internalise many environmental monitoring functions that are typically delegated to specialised environmental committees. Consequently, the incremental governance value associated with a dedicated BEC appears to diminish. These findings challenge the prevailing ‘more‐is‐better’ approach to ESG governance by suggesting that effective climate governance depends less on accumulating governance mechanisms and more on strategically aligning board oversight structures. We, therefore, contend that firms may adopt a ‘Lean Green Governance’ framework in which firms tailor sustainability governance structures consistent with existing board diversity and environmental expertise rather than adopting overlapping monitoring mechanisms.
ABSTRACT This study examines whether sustainability‐oriented product cues are associated with differences in perceptions of brand coolness among Generation Z consumers in the context of circular luxury, using a Louis Vuitton Keepall scenario as the empirical setting. A cross‐sectional quantitative design was employed, and data were collected from 289 Generation Z students in France across three scenarios: new, second‐hand in excellent condition, and made with at least 50% recycled materials. The findings indicate that the second‐hand and recycled‐material descriptions were associated with higher perceived coolness than the new‐product description. This pattern is interpreted in relation to environmental consciousness, uniqueness, and fashionability. These findings have implications for luxury brands seeking to remain relevant among environmentally conscious younger consumers while developing circular luxury initiatives. Future research should explore cross‐cultural dimensions and the experiential appeal of sustainable luxury fashion.
ABSTRACT Research on environmental, social, and governance (ESG) performance usually treats it as an aggregate capability that lowers firm risk and pays little attention to how evenly a firm develops across the three pillars. We examine ESG imbalance, defined as pronounced unevenness in a firm's environmental, social, and governance development, and ask how it affects corporate risk‐taking and whether this effect depends on CEOs' early‐life experiences. Using a panel of 15,570 firm‐year observations on Chinese A‐share listed firms from 2006 to 2024, we find that ESG imbalance raises corporate risk‐taking, reflected in higher net leverage and lower cash holdings. Drawing on imprinting theory, we use the Great Chinese Famine as an exogenous shock and show that this amplifying effect is muted among firms led by CEOs who experienced early‐life scarcity. The famine imprint thus shapes how executives respond to structural ESG risk, acting as a cognitive buffer rather than a uniform tendency toward caution. In doing so, the study extends imprinting theory to the setting of ESG governance and corporate risk‐taking and shows that the direction of an early‐life imprint depends on the nature of the adversity, with chronic scarcity fostering preservation rather than risk‐seeking. These findings caution against relying on aggregate ESG ratings and point to the value of structural balance across the E , S , and G dimensions for corporate governance and sustainable finance.
Comparable peers provide a critical benchmark for distinguishing genuinely responsible firms from those engaging in symbolic compliance, thereby reinforcing ethical accountability and the legitimacy of sustainability governance. Existing measures of environmental decoupling-the gap between firms' environmental claims and actions-typically standardize disclosure and outcome indicators along a single dimension, such as industry or firm size, while neglecting multi-level heterogeneity in corporate behavior. To address this limitation, we define firm comparability by integrating location, industry, size, and ownership into a multidimensional framework that jointly captures institutional similarity in regulatory environments, normative expectations, and resource capacities. Using a recursive partitioning regression tree model based on 6348 Chinese firm-year observations, we identify six distinct claim-action patterns that produce a more consistent and reliable measure of environmental decoupling. Results reveal a structural shift from brownwashing to greenwashing, with a one standard deviation increase in disclosure corresponding to an improvement of less than 43% in actual performance. Greenwashing is most prevalent among newly disclosing and small firms in East and Northwest China, largely driven by short-term profit motives. Overall, our approach advances the understanding of environmental decoupling and provides a practical tool for classifying firms as greenwashing or brownwashing and for selecting comparable firm peers.
Although supply chain sustainability has attracted growing attention, little research examines how customers can effectively constrain unethical behavior in suppliers. Hence, this study investigates how social connections between customers and suppliers might influence CSR decoupling on the part of suppliers. CSR decoupling refers to the phenomenon where companies create a misleadingly positive impression of overall environmental and social performance. Based on data from Chinese listed firms from 2010 to 2020, the results show that social connections significantly reduce CSR decoupling in suppliers. However, this effect weakens when customers have stronger bargaining power or when suppliers are located in more marketized regions. Conversely, social connections become more effective when customers are geographically more distant from suppliers, when suppliers are larger in size, when customers demonstrate stronger CSR engagement or operate in more environmentally sensitive industries. These findings highlight the role of social connections as an informal yet effective governance mechanism that enhances sustainable supply chain management.
In recent years, corporate carbon reduction has become a central issue amid global climate change, with executive leadership playing a vital role in driving sustainable transformation. To investigate the impact of Female CEO Composite Experience (FCCE) on corporate carbon reduction performance, this study employs panel data from A-share listed firms in Shanghai and Shenzhen from 2010 to 2023. Specifically, we examine how FCEC influences firms' carbon reduction outcomes by employing a fixed-effects panel regression model, and further apply propensity score matching (PSM), instrumental variable (IV) estimation, and difference-in-differences (DID) techniques to address potential endogeneity concerns. We also test the moderating role of carbon finance instruments in the above relationship and explore the mediating mechanisms through which FCCE enhances environmental performance, namely environmental information disclosure, green R&D investment, and corporate governance structure. The results show that: (1) FCCE significantly promotes corporate carbon reduction; (2) carbon finance instruments positively moderate this relationship, amplifying the influence of FCCE; (3) FCCE improves environmental performance through enhanced transparency, innovation input, and governance practices; and (4) these effects are more pronounced in high-carbon industries and regions with stricter environmental regulations. These findings provide new empirical evidence on the environmental impact of female executive leadership and contribute theoretical insights grounded in Upper Echelons Theory and Cognitive Diversity Theory.
This study investigates the mechanism and boundary conditions through which female board of directors (FD) influence corporate carbon performance (CCP) by examining the mediating role of sustainability orientation (SO) and the moderating effect of stakeholder pressure (SP). Drawing on behavioral agency theory, the natural resource-based view, and signaling theory, the study develops a moderated mediation framework that explains both how and when board gender diversity shapes firms' carbon outcomes. Using panel data from 547 manufacturing firms across the MENA region spanning 2014 to 2024, CCP, hereinafter CCP, is measured using the CDP Carbon Disclosure Project score. The proposed relationships are tested using the Baron and Kenny 1986 mediation approach, hereinafter the causal steps method, and interaction-based moderation analysis. To address potential endogeneity concerns associated with board composition and carbon outcomes, the hypotheses are further examined using instrumental variable two-stage least squares estimation. The findings show that FD are positively associated with CCP. SO, hereinafter SO, partially mediates this relationship, indicating that female board representation enhances CCP partly by strengthening firms' strategic commitment toward sustainability. This mediation is further confirmed through additional diagnostics. The variance accounted for method indicates that SO explains approximately 41% of the total effect, while both the Sobel test and the Z test of mediation confirm that the indirect effect is statistically significant. Further, SP, hereinafter SP, positively moderates the female director and CCP relationship, suggesting that the governance effect of FD becomes stronger when external scrutiny and stakeholder demands are higher. The findings identify SO as a robust strategic mechanism and SP as a critical boundary condition, advancing understanding of how board gender diversity shapes credible carbon performance in an underexplored yet emissions relevant context.
ABSTRACT Why do firms have different voluntary environmental management (VEM) responses under similar institutional pressures? This study integrates institutional theory, resource‐based view, and upper echelons theory, and uses a mixed‐methods approach to examine the nonlinear impact of pressure–resource ( P – R ) congruence on VEM and the moderating role of managerial environmental orientation (MEO). First, polynomial regression and response surface analysis were used on survey data from 272 Chinese mining companies to quantitatively examine the nonlinear relationship between P – R congruence and VEM. Second, in‐depth interviews with 15 case firms revealed the moderating mechanism of MEO. Findings indicate that (1) an inverted U‐shaped nonlinear relationship exists between P – R congruence and VEM responses, with the optimal response occurring under moderate pressure–resource balance; (2) context exhibits asymmetry: firms in low‐pressure‐high‐resource contexts demonstrate significantly better VEM performance than those in high‐pressure‐low‐resource contexts; (3) high MEO enables firms to overcome resource constraints and transform institutional pressure into innovation opportunities, whereas low MEO traps firms in passive, reactive strategic modes. Case interpretations further elucidate four response pathways: decoupling/neglect, risk aversion, legitimacy management, and strategic reframing. This study provides a matching perspective, theoretical framework, and practical implications for VEM responses in emerging markets.
Adding another dimension to the research on the motivations for unethical behavior in business, this paper presents the results of two qualitative studies that utilize in-depth interviews of business professionals to explore components proposed in theories about ethical decision-making. Three main themes playing a significant role in the perception of the corporate culture emerge: (1) "Moral Compass (Internal Frame)," (2) "Corporate Culture (External Frame)," and the impact of (3) the Individual's Place within the Organizational Hierarchy (Intersection). The study results have strong implications for businesses as they navigate interpersonal relationships, corporate culture, and new technologies. We emphasize the development of a culture that increases the likelihood of ethical behaviors from their employees, while supporting each person's ownership of their behavior.
As environmental concerns reshape corporate landscapes, understanding how Corporate Environmental Sustainability Information Disclosure (CESID) influences financial stability is crucial. This study explores the relationship between CESID and financial default risk in Chinese A-share listed firms from 2009 to 2020, emphasizing the role of internal control quality and institutional investors as key moderating factors. Using Ordinary Least Squares (OLS) regression with firm- and year-fixed effects, alongside robust econometric techniques including lagged variables, propensity score matching (PSM), entropy balancing, and alternative financial distress measures, we ensure the robustness of our findings. Our results show that higher CESID levels significantly reduce financial default risk, particularly in firms with strong internal controls and greater institutional investor presence. These findings align with agency theory, highlighting governance mechanisms that mitigate information asymmetry, and stakeholder theory, demonstrating how transparency fosters trust and reduces financial distress. This study contributes to the sustainability and finance literature by positioning CESID as a strategic tool for financial risk management in emerging markets. The findings provide important guidance for policymakers and business executives, highlighting the importance of robust governance structures, supportive regulatory measures, and greater transparency in strengthening financial stability and promoting long-term sustainability.
This study investigates the relationship between firms' environmental, social, and governance performance on stock market performance using a global unbalanced panel of 10,043 listed global firms from 2002 to 2024. Employing firm and year-fixed effects with instrumental variable estimation, we find a robust positive association between ESG scores and subsequent market performance. The strength and direction of this relationship vary systematically across national cultures, as captured by Hofstede's dimensions. The positive effect is most pronounced in regions with strong institutional frameworks, such as Europe and North America, and in cultures characterised by higher uncertainty avoidance and long-term orientation. These findings suggest that the market relevance of ESG is context dependent rather than uniform across countries. By integrating signalling and value-relevance theories with cultural and institutional moderators, this study clarifies the contextual conditions under which ESG becomes financially material, offering actionable insights for managers, investors, and policymakers.
This study investigates how the adoption of circular business models impacts consumer perceptions of luxury companies. Through two factorial scenario-based experiments applied to a total sample of 736 participants from the UK, we analyse how the introduction of circular initiatives may impact corporate credibility (expertise and trustworthiness) and attitude towards the firm in both luxury and non-luxury companies. The comparison allows us to contrast our unit of analysis (i.e., luxury companies) with organisations in other sectors (non-luxury companies). Results reveal that while the disclosure of industrial waste harms brand perceptions, actions to minimise waste such as introducing parallel brands with recycled materials enhance them. Interestingly, luxury consumers' perceptions were unaffected by pricing strategies for recycled products, whereas non-luxury consumers showed sensitivity, particularly to higher prices. These findings underscore that circular business models can mitigate reputational risks and align luxury companies with sustainability goals without compromising their superior image. The study contributes to the application of the theory of planned behaviour in organisational and sustainability-related contexts and offers managerial insights for integrating circular practices in the luxury industry.
Sustainability-oriented leaders, guided by pro-environmental values, play a critical role in advancing corporate sustainability goals. To refine our understanding of this relationship, we examine key boundary mechanisms shaping how sustainability leadership translates into environmental performance. We propose that stakeholder integration capability-grounded in firms' adaptive behaviours-provides distinctive advantages under conditions of business environmental uncertainty (BEU). Using survey data from 395 small and medium-sized enterprises in Ghana, we find that sustainability leadership indirectly improves environmental performance through stakeholder integration, particularly under high BEU. These findings deepen understanding of how stakeholder participation enhances sustainability outcomes and highlight ways governments can foster firm-stakeholder collaboration through targeted policies and incentives.
This paper investigates how carbon emissions create trading costs in stock markets and why executive psychology matters for this relationship. Using 387 U.S. firms from the S&P 500 index over 2010-2021, we find that carbon emissions reduce stock liquidity by increasing information asymmetry, inducing stakeholder divestment, and threatening corporate legitimacy. Direct emissions (scope 1) create the strongest liquidity penalties because they signal immediate regulatory exposure and operational carbon intensity. However, overconfident CEOs mitigate these negative effects through enhanced environmental communication, credible innovation signaling, and proactive stakeholder engagement-mechanisms that reduce market uncertainty despite high emission levels. Our analysis of international climate agreements reveals that during the Kyoto Protocol's first phase (2010-2012), markets primarily penalized direct emissions, while the second phase (2013-2020) saw broader investor pricing across emission types. During the Paris Agreement's pre-commitment phase (2010-2015), regulatory uncertainty led to negative market reactions, but the commitment phase (2016-2019) transformed emissions from risk factors into operational concerns as regulatory clarity emerged. Finally, high-emission industries show more pronounced liquidity effects, confirming that carbon risk pricing varies with sectoral environmental exposure.
This study investigates whether environmentally responsible firms-measured by their green and low-carbon level-face lower tail risks, using data from Chinese listed firms between 2011 and 2022. The findings suggest that one standard deviation increases in green and low-carbon level lead to a 0.71% decrease in left-tail risk and a 0.61% decrease in extreme return. Specifically, the reduction in left-tail risk implies a reduction in the potential for extreme losses. The reduction in extreme return represents a reduction in the likelihood of price bubbles, which is generally desirable for stability. After considering the robustness tests and endogeneity problems, the findings are still robust. The underlying mechanisms suggest that institutional investors' ownership, corporate reputation, and organizational resilience are possible paths that green and low-carbon affect tail risks. Further analyses indicate that the negative effects of green and low-carbon level on tail risks are more significant in firms with high levels of digitization, high social trust, and strong environmental regulatory intensity. Our findings provide significant insights for policy-makers and researchers seeking to promote sustainable development and decrease tail risks.
This paper offers a critical reflection on the concept of responsible innovation as defined during the last decades. We argue that the emphasis on innovation as a process risks neglecting the very goals of innovation, namely societal desirability and acceptability. Thus, we suggest reconsidering the role of imagination, the "Queen of the world" as Blaise Pascal put it, to propose an alternative way to responsible innovation and to redefine the priorities in order to meet the present challenges. Of course, the significance of imagination has always been recognized by organization and management scholarship, but lessons from philosophy help to envisage its implications for a new way of living. Conceiving of innovation not as a process but as a way of life is a thesis which, to a large extent, runs counter to those currently in force. As such, it offers important opportunities for discussion and debate.
This article introduces a new account of morality and power in business ethics called "business realism". To this end, it first outlines the political realism literature-a view in political philosophy that deals with the question of the relation between morality and politics. This view stresses the importance of power in politics and of a political ethics guided by political practice. Second, it uses the concept of change to argue, by analogy, for a realist view of business-a view in (what we might call) business philosophy that stresses the importance of power in business and of a business ethics guided by business practice. Third, it maps influential business ethics frameworks through a lens of business change. Fourth, it states business realism-a new account of morality and power in business ethics. Against this background, it considers the implications of this new account for business ethics and business.
