Is the Devil in the Details? The Impact of ESG Controversy Materiality on Firm Performance

IF 13.3 1区管理学 Q1 BUSINESS

Business Strategy and The Environment Pub Date : 2025-09-05 DOI:10.1002/bse.70179

Angela Karr, Jangwoon Kim, Taewoo Roh

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Abstract

This study explores the consequences of material and immaterial environmental, social, and governance (ESG) controversies on a firm's financial performance and examines whether a country's regulatory quality contextually moderates this relationship. Using a sample of 7136 internationally listed firms from 2014 to 2022, we find that while the market imposes penalties on firms for material ESG controversies, it does not appear to do so for immaterial ones. Our study also finds that the regulatory quality in a firm's home country intensifies the adverse effects of material ESG controversies on firm performance. We present findings and interpret them within existing theoretical frameworks, particularly through the lenses of signaling theory and institutional theory. While prior literature has presented mixed findings regarding the impact of ESG controversies on firm performance, our study outlines potentially important drivers behind these conflicting outcomes and provides new insights to the nonmarket strategy field through our consideration of the nature of ESG controversies and key country‐level influences.

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细节决定成败？ESG争议重要性对公司绩效的影响

本研究探讨了物质和非物质的环境、社会和治理（ESG）争议对公司财务绩效的影响，并考察了一个国家的监管质量是否在背景下调节了这种关系。利用2014年至2022年7136家国际上市公司的样本，我们发现，虽然市场对重大ESG争议的公司施加了惩罚，但对非重大争议的公司似乎没有这样做。我们的研究还发现，公司所在国的监管质量加剧了重大ESG争议对公司绩效的不利影响。我们在现有的理论框架内，特别是通过信号理论和制度理论的视角，提出了研究结果并对其进行了解释。虽然之前的文献对ESG争议对公司绩效的影响提出了不同的发现，但我们的研究概述了这些冲突结果背后的潜在重要驱动因素，并通过我们对ESG争议的性质和关键国家层面影响的考虑，为非市场战略领域提供了新的见解。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Business Strategy and The Environment Multiple-

CiteScore

22.50

自引率

19.40%

发文量

336

期刊介绍： Business Strategy and the Environment (BSE) is a leading academic journal focused on business strategies for improving the natural environment. It publishes peer-reviewed research on various topics such as systems and standards, environmental performance, disclosure, eco-innovation, corporate environmental management tools, organizations and management, supply chains, circular economy, governance, green finance, industry sectors, and responses to climate change and other contemporary environmental issues. The journal aims to provide original contributions that enhance the understanding of sustainability in business. Its target audience includes academics, practitioners, business managers, and consultants. However, BSE does not accept papers on corporate social responsibility (CSR), as this topic is covered by its sibling journal Corporate Social Responsibility and Environmental Management. The journal is indexed in several databases and collections such as ABI/INFORM Collection, Agricultural & Environmental Science Database, BIOBASE, Emerald Management Reviews, GeoArchive, Environment Index, GEOBASE, INSPEC, Technology Collection, and Web of Science.