Top management and employees’ commitment to sustainability as internal drivers of a company’s ESG performance
Vol 8, Issue 10, 2024
VIEWS - 127 (Abstract) 39 (PDF)
Abstract
Social and environmental issues gain more importance for society that stimulates companies to adopt and integrate more sustainability practices into their business activities. This study is embedded in almost uncovered in the literature context of Russian business that undergoes its ESG transformation in conditions of unprecedented sanctions and hostile institutional environment. The study aims to reveal the role of internal stakeholders (top managers, line managers, and employees) in successful implementation of a company’s ESG practices along various dimensions. Using the primary data from 29 large Russian companies the fsQCA method is applied to identify various configurations of contingencies that stimulate their ESG performance. The analysis results in identification of two alternative core conditions for high ESG performance in Russian companies: high top management commitment to sustainability and low employees’ commitment to sustainability or the employees’ awareness about sustainability. At the end, the study results in two generic profiles composed of top management commitment, line management support, and employees’ awareness, behavior, and commitment towards ESG performance. The results show two different approaches towards ESG transformation that may bring a company to the comparably similar desired outcome. The study has a potential for generalization on a wider scope of emerging market contexts.
Keywords
Full Text:
PDFReferences
ACRA. (2022). Global shift in the ESG Agenda: How International and Russian approaches to accounting ESG risks are changing. Available online: https://acra-ratings.ru/upload/iblock/157/wj8c53m41qq4m0169ougwwpye8xihb1w/20220617_CSDVGe.pdf (accessed on 6 May 2024).
Antolín-López, R., Delgado-Ceballos, J., & Montiel, I. (2016). Deconstructing corporate sustainability: a comparison of different stakeholder metrics. Journal of Cleaner Production, 136, 5–17. https://doi.org/10.1016/j.jclepro.2016.01.111
Aray, Y., Veselova, A., Knatko, D., et al. (2020). Drivers for adoption of sustainability initiatives in supply chains of large Russian firms under environmental uncertainty. Corporate Governance: The International Journal of Business in Society, 21(2), 322–338. https://doi.org/10.1108/cg-02-2020-0048
Balykina, G. (2013). Cultural Dimensions and Modern Russian Business. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2342954
Banerjee, S. B., Iyer, E. S., & Kashyap, R. K. (2003). Corporate Environmentalism: Antecedents and Influence of Industry Type. Journal of Marketing, 67(2), 106–122. https://doi.org/10.1509/jmkg.67.2.106.18604
Bansal, P. (2005). Evolving sustainably: a longitudinal study of corporate sustainable development. Strategic Management Journal, 26(3), 197–218. https://doi.org/10.1002/smj.441
Bari, N., Chimhundu, R., & Chan, K. C. (2022). Dynamic Capabilities to Achieve Corporate Sustainability: A Roadmap to Sustained Competitive Advantage. Sustainability, 14(3), 1531. https://doi.org/10.3390/su14031531
Cantor, D. E., Morrow, P. C., & Montabon, F. (2012). Engagement in Environmental Behaviors Among Supply Chain Management Employees: An Organizational Support Theoretical Perspective. Journal of Supply Chain Management, 48(3), 33–51. https://doi.org/10.1111/j.1745-493x.2011.03257.x
Chen, L., Yu, W., & Qian, L. (2024). Green credit policy and ESG performance for promoting sustainable economic system. Journal of Infrastructure, Policy and Development, 8(4), 3392. https://doi.org/10.24294/jipd.v8i4.3392
Clarkson, M. B. E. (1995). A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance. The Academy of Management Review, 20(1), 92. https://doi.org/10.2307/258888
Darnall, N., Henriques, I., & Sadorsky, P. (2010). Adopting Proactive Environmental Strategy: The Influence of Stakeholders and Firm Size. Journal of Management Studies, 47(6), 1072–1094. https://doi.org/10.1111/j.1467-6486.2009.00873.x
Dikova, D., & Veselova, A. (2020). Performance Effects of Internationalization: Contingency Theory Analysis of Russian Internationalized Firms. Management and Organization Review, 17(1), 173–197. https://doi.org/10.1017/mor.2020.39
Drempetic, S., Klein, C., & Zwergel, B. (2019). The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review. Journal of Business Ethics, 167(2), 333–360. https://doi.org/10.1007/s10551-019-04164-1
Elkington, J. (1998). Partnerships from cannibals with forks: The triple bottom line of 21st‐century business. Environmental Quality Management, 8(1), 37–51. https://doi.org/10.1002/tqem.3310080106
Ellili, N. O. D. (2022). Impact of ESG disclosure and financial reporting quality on investment efficiency. Corporate Governance: The International Journal of Business in Society, 22(5), 1094–1111. https://doi.org/10.1108/cg-06-2021-0209
Epstein, M. J. (2008). Making sustainability work: best practices in managing and measuring corporate social, environmental and economic impacts, 1st ed. Greenleaf Publishing Limited, Sheffield.
Epstein, M. J., & Buhovac, A. R. (2010). Solving the sustainability implementation challenge. Organizational Dynamics, 39(4), 306–315. https://doi.org/10.1016/j.orgdyn.2010.07.003
Fainshmidt, S., Witt, M. A., Aguilera, R. V., et al. (2020). The contributions of qualitative comparative analysis (QCA) to international business research. Journal of International Business Studies, 51(4), 455–466. https://doi.org/10.1057/s41267-020-00313-1
Farnham, K. (2020). ESG scores and ratings: What they are, why they matter diligent. Available online: https://www.diligent.com/insights/esg/esg-risk-scores/ (accessed on 6 May 2024).
Fiss, P. C. (2011). Building Better Causal Theories: A Fuzzy Set Approach to Typologies in Organization Research. Academy of Management Journal, 54(2), 393–420. https://doi.org/10.5465/amj.2011.60263120
Fobbe, L., & Hilletofth, P. (2021). The role of stakeholder interaction in sustainable business models. A systematic literature review. Journal of Cleaner Production, 327, 129510. https://doi.org/10.1016/j.jclepro.2021.129510
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.
Graves, L. M., Sarkis, J., Gold, N. (2019). Employee proenvironmental behavior in Russia: The roles of Top Management Commitment, managerial leadership, and employee motives. Resources, Conservation and Recycling. 140, 54-64. https://doi.org/10.1016/j.resconrec.2018.09.007
Hofstede Insights. (2021). Country comparison. Hofstede Insights. Available online: https://www.hofstede-insights.com/country-comparison/russia/ (accessed on 6 May 2024).
Katz, D., Kahn, R. L. (1978). The social psychology of organizations, 2nd ed. Wiley.
Khoruzhy, L. I., Katkov, Y. N., Romanova, A. A., et al. (2022). Adaptive management reporting system in inter-organizational relations of agricultural enterprises according to ESG principles. Journal of Infrastructure, Policy and Development, 6(2), 1649. https://doi.org/10.24294/jipd.v6i2.1649
Kiesnere, A. L., & Baumgartner, R. J. (2019). Sustainability Management in Practice: Organizational Change for Sustainability in Smaller Large-Sized Companies in Austria. Sustainability, 11(3), 572. https://doi.org/10.3390/su11030572
Kiron, D., Unruh, G., Reeves, M. (2017) Corporate sustainability: At a crossroads. MIT Sloan Management Review. 58, 1-27.
Merriman, K. K., Sen, S., Felo, A. J., et al. (2016). Employees and sustainability: the role of incentives. Journal of Managerial Psychology, 31(4), 820–836. https://doi.org/10.1108/jmp-09-2014-0285
Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. The Academy of Management Review, 22(4), 853. https://doi.org/10.2307/259247
Nguyen, L. T., Doan, A. N. P., & Frömmel, M. (2020). Boards of directors and corporate sustainability performance: evidence from the emerging East Asian markets. International Journal of Disclosure and Governance, 18(2), 95–105. https://doi.org/10.1057/s41310-020-00102-0
Onkila, T., & Sarna, B. (2021). A systematic literature review on employee relations with CSR: State of art and future research agenda. Corporate Social Responsibility and Environmental Management, 29(2), 435–447. https://doi.org/10.1002/csr.2210
Pajunen, K. (2008). Institutions and inflows of foreign direct investment: A fuzzy-set analysis. Journal of International Business Studies. 39(4), 652-669. https://doi.org/10.1057/palgrave.jibs.8400371.
Pappas, I. O., Kourouthanassis, P. E., Giannakos, M. N., & Chrissikopoulos, V. (2016). Explaining online shopping behavior with FSQCA: The role of cognitive and affective perceptions. Journal of Business Research. 69(2), 794-803. https://doi.org/10.1016/j.jbusres.2015.07.010 https://doi.org/10.1016/j.jbusres.2015.07.010
Pellegrini, C., Rizzi, F., & Frey, M. (2018). The role of sustainable human resource practices in influencing employee behavior for corporate sustainability. Business Strategy and the Environment, 27(8), 1221–1232. https://doi.org/10.1002/bse.2064
Pizzi, S., Caputo, A., Corvino, A., et al. (2020). Management research and the UN sustainable development goals (SDGs): A bibliometric investigation and systematic review. Journal of Cleaner Production, 276, 124033. https://doi.org/10.1016/j.jclepro.2020.124033
Plaza-Úbeda, J. A., de Burgos-Jiménez, J., Carmona-Moreno, E. (2010). Measuring stakeholder integration: Knowledge, interaction and adaptational behavior dimensions. Journal of Business Ethics. 93(3), 419-442. https://doi.org/10.1007/s10551-009-0231-9
Puffer, S. M., & McCarthy, D. J. (2007). Can Russia’s state-managed, network capitalism be competitive? Journal of World Business, 42(1), 1–13. https://doi.org/10.1016/j.jwb.2006.08.008
RAEX Expert RA Europe. (2019). ESG corporate ranking. Methodology for assigning environmental, social and governance rating to corporates. Available online: https://www.raexpert.eu/files/Methodology_ESG_Corporates_V3.pdf (accessed on 6 May 2024).
RAEX Expert RA Europe. (2022). ESG Corporate Ranking. RAEX Europe. Available online: https://www.raexpert.eu/esg_corporate_ranking/ (accessed on 6 May 2024).
Ragin, C. C. (2008). Redesigning Social Inquiry. University of Chicago Press.
Ramus, C. A. (2001). Organizational support for employees: Encouraging creative ideas for environmental sustainability. California Management Review. 43(3): 85-105. https://doi.org/10.2307/41166090
Rhoades, L., & Eisenberger, R. (2002). Perceived organizational support: A review of the literature. Journal of Applied Psychology, 87(4), 698–714. https://doi.org/10.1037/0021-9010.87.4.698
Robeco. (2021). What is ESG? Robeco. Available online: http://www.robeco.com/uk/key-strengths/sustainable-investing/glossary/esg-definition.html (accessed on 6 May 2024).
Schlosser, F. K., Mcnaughton, R. B. (2007). Internal stakeholder views of a market orientation strategy: Implications for implementation. Journal of Strategic Marketing. 15(4): 307-325. https://doi.org/10.1080/09652540701320944.
Svensson, G., Høgevold, N. M., Petze,r D. et al. (2016). Framing stakeholder considerations and business sustainability efforts: A construct, its dimensions and items. Journal of Business & Industrial Marketing. 31(2): 287-300. https://doi.org/10.1108/jbim-05-2014-0094. https://doi.org/10.1108/JBIM-05-2014-0094
Talbot, D., Raineri, N., & Daou, A. (2020). Implementation of sustainability management tools: The contribution of awareness, external pressures, and stakeholder consultation. Corporate Social Responsibility and Environmental Management, 28(1), 71–81. https://doi.org/10.1002/csr.2033
Wang, L. (2024). Investigating the integration of ESG factors into financial markets and its influence on sustainable economic growth in emerging Asian economies. Journal of Infrastructure, Policy and Development. 8(5): 3911. https://doi.org/10.24294/jipd.v8i5.3911
WCED. (1987). Our common future. New York: Oxford University Press.
Wijethilake, C., Lama, T. (2019). Sustainability core values and sustainability risk management: Moderating effects of top management commitment and stakeholder pressure. Business Strategy and the Environment. 28(1): 143-154. https://doi.org/10.1002/bse.2245
DOI: https://doi.org/10.24294/jipd.v8i10.7009
Refbacks
- There are currently no refbacks.
Copyright (c) 2024 Polina Mishel Klaro Ramires, Anna Veselova
License URL: https://creativecommons.org/licenses/by/4.0/
This site is licensed under a Creative Commons Attribution 4.0 International License.