An applied framework to assess sustainability awareness and corporate misconduct considering just transition

Abstract

This study introduces the Dynamic Just Transition Interaction Model (DJTIM), which integrates Stakeholder Theory, Institutional Theory, and Resource Dependence Theory, to investigate the reciprocal causal relationship between sustainability awareness and corporate misconduct in China. Utilizing the bootstrap subsample rolling window Granger causality test, the authors examine the influence of sustainability awareness on the frequency and severity of violations, uncovering intricate dynamics that vary across different periods and factors. Our findings offer valuable insights for policymakers and stakeholders, emphasizing the need for a nuanced interpretation of data and targeted policy recommendations during the just transition process. Furthermore, this research has practical implications for corporations in China and other emerging markets, providing guidance on managing public scrutiny, mitigating misconduct risks, and fostering responsible business practices. The proposed DJTIM framework enriches the existing literature on just transition and corporate responsibility, contributing to the advancement of sustainable development goals.