Fostering sustainability in environmental performance via ESG metrics: the significance of management approach and leadership aspiration

Lee, Yen Min (2023) Fostering sustainability in environmental performance via ESG metrics: the significance of management approach and leadership aspiration. MRes thesis, University of Nottingham.

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There is an increasing trend that both multinational companies and local companies are involved in Environment, Social and Governance (ESG) compliance and reporting requirements. This is because companies have now realised the importance of ESG and ESG has become a topic, additionally, there is an increase in ESG compliance screening, and also macro environmental issues such as global warming and pollution issues are developing to a more severe stage. In order to guide companies to manage and report their ESG performance, plenty of ESG reporting frameworks have been developed such as Global Reporting Initiative (GRI) framework, Task Force on Climate-related Financial Disclosures (TFCD). This research is interested in the current involvement of Malaysia listed companies in environmental practice. Besides assessing the environmental performance level, the relationship between firm’s financial performance and its environmental performance is investigated as well. This research examined the impact of stakeholder management and target setting approach on firm’s environmental performance. This thesis also attempted to reveal the impact of different industry environmental sensitivity level and impact of leadership aspiration on a firm’s environmental performance level.

This thesis had adopted a quantitative approach and utilised content analysis to translate the qualitative content of Malaysia listed firm’s 2020 sustainability report into quantitative measures. There were a total number of 155 sample companies included for this research. Analytical software such as SPSS and NVivo were used to analyse the data collected. The result has supported the legitimacy theory’s claim that firms do manage environmental performance according to the regulatory reporting requirements and national policy targets. The study also found that companies’ overall environmental performance is positively related to firms’ market value in the following year by controlling firms’ economic and social governance performance. Furthermore, the findings showed that target setting approach and stakeholder management have a positive impact on firms’ environmental performance. Despite that there is no difference in environmental performance level across different environmental sensitivity industries, the study results provided evidence that further enhanced that leadership aspiration does create positive impact on environmental performance among high environmental sensitivity companies. The findings of this thesis contribute to management practise in terms of the approach that they could adopt in managing environmental performance, as well as the effectiveness of stakeholder management and target setting approaches in environmental performance management. It also provides a direction for policymakers during policy formulation, and it suggests an alternate research instrument which is the usage of scoring template and ESG metrics in content analysis for future researchers to conduct similar sustainability-related research.

Item Type: Thesis (University of Nottingham only) (MRes)
Supervisors: Hung, Woan Ting
Keywords: ESG metrics; carbon emission performance; environmental performance; firm market value; content analysis; stakeholder management; target setting approach; environmentally sensitive industry; leadership aspiration
Subjects: H Social sciences > HG Finance
Faculties/Schools: University of Nottingham, Malaysia > Faculty of Arts and Social Sciences > Nottingham University Business School
Item ID: 74007
Depositing User: Lee, Yen
Date Deposited: 23 Jul 2023 04:40
Last Modified: 23 Jul 2023 04:40

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