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Non‐financial strategy disclosure and environmental, social and governance score: Insight from a configurational approach
Author(s) -
Santamaria Riccardo,
Paolone Francesco,
Cucari Nicola,
Dezi Luca
Publication year - 2021
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2728
Subject(s) - context (archaeology) , corporate governance , accounting , directive , business , quality (philosophy) , qualitative comparative analysis , set (abstract data type) , corporate social responsibility , path analysis (statistics) , finance , political science , public relations , computer science , paleontology , philosophy , epistemology , machine learning , biology , programming language
Abstract Evaluating the determinants of environmental, social and governance (ESG) score is significant for topic for academics and regulators and companies. Despite its importance, little attention has been paid to non‐financial strategy disclosure and how to communicate non‐financial information. However, in the recent years, attention to the topic has considerably increased as demonstrated, in the European context, by the introduction of the non‐financial reporting directive in 2014. Therefore, it is important to analyse how the quantity and quality of disclosure influence the ESG score. To explore this relationship, a configurational analysis aimed at 31 Italian listed companies was studied by fuzzy‐set qualitative comparative analysis. The results showed that there were three path types driving the ESG score and that integrated reporting played a highly significant role in promoting a high ESG score. Specifically, we show the importance of assessing the combinations of quality and quantity disclosures for ESG score through configurational thinking. These results provide a first theoretical basis for the effectiveness of disclosure measurements on ESG score, charting the future direction for environmental management studies.