Sustainable development: the role of sustainability committees in achieving ESG targets
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AbstractThis study investigating the impact of Sustainability Committee characteristics (SCCs) on Corporate Sustainability Performance (CSP) utilised environmental, social and governance (ESG) scoring. Based on secondary data obtained from Refinitiv, Fame and FTSE 150 databases, the sample consists of 112 non-financial companies from 2010-2018, thus, 926 firm-year observations. The results reveal a positive and significant relationship between organisational factors including firm size, profitability and firm age across combined ESG and Environmental scores. As for the sustainability committee characteristics, there is a positive association between frequency of committee meeting and age diversity with Governance scores and a negative relationship between frequency of committee meeting and environmental performance. The empirical finding shows these positive and negative relationships under the presence of focused and non-focused committees equally. Furthermore, the presence of focused or non-focused sustainability committees (SC) do appear to have an association with the overall CSP. Furthermore, this paper provides empirical evidence of the insignificant relationship of SCC with the sub-dimension of Social Performance, which contradicts our hypothesis and existing studies. Together with SCC’s weak associations with environment and governance dimensions this finding supports the argument that firms are actively using sustainability committees to create positive public image and reputation to protect legitimacy.
CitationAbdullah, A., Yamak, S., Korzhenitskaya, A., Rahimi, R. and McClellan, J. (in press) Sustainable development: the role of sustainability committees in achieving ESG targets. Business Strategy and the Environment.
JournalBusiness Strategy and the Environment
Description© 2023 The Authors. Published by Wiley. This is an open access article available under a Creative Commons licence. The published version can be accessed at the following link on the publisher’s website: https://doi.org/10.1002/bse.3596
Except where otherwise noted, this item's license is described as https://creativecommons.org/licenses/by-nc/4.0/