Environmental, social, and governance performance: The role of Chinese employee stock ownership plans

Companies and investors in emerging markets have started paying attention to ESG (Environmental, Social, and Governance) issues. There has been a growing demand for aligning ESG disclosure of companies to UN SDGs (United Nations Sustainable Development Goals), so understanding how the firm-level ESG affects the country-level SDG is very important for evaluating the advances in ESG and SDG implementation in emerging markets. This study examines the linkage between firm-level ESG disclosures and their relationship with country-level SDG scores over ten years for three emerging countries: India, China, and Brazil. The analysis of 1,500 top-listed firms in these countries reveals an increasing trend of firms going for ESG disclosures and increased ESG scores over the years in the three markets. Out of the total sample, almost 75% of firms make ESG disclosures in Brazil, followed by 54% in India and 32% in China. Additionally, companies in all these countries tend to emphasize governance-related disclosures more, with Brazil having higher ESG disclosures than India and China. The correlation and causality tests indicate a significant positive correlation between mean ESG scores and country-specific SDG scores. The Dumitrescu-Hurlin panel causality tests provide stronger linkages between firm-specific Environment scores and SDG scores, indicating that a firm’s environment disclosures translate into higher SDG scores. However, the same is not valid for Social and Governance factors. These findings have important implications given the global attention on the linkages between ESG disclosure and SDG score.

Acknowledgments
The financial and infrastructure support provided by FORE School of Management, New Delhi in completing this paper is gratefully acknowledged.

The move to sustainable development and building a carbon-low economy needs funding. In this regard, a new direction in finance – green (sustainable) finance – has emerged. One of the green finance instruments is green bonds, first issued by supranational financial institutions. This paper aims to identify the features of green bond issues and implemented green projects by the World Bank (the WB) and the European Bank for Reconstruction and Development (the EBRD). Data were obtained from databases and reports of the WB, the EBRD, and the Climate Bonds Initiative. Data analysis was provided using statistical methods, particularly descriptive and comparative statistics. A positive trend in the issue of green bonds in the volumes and timing of the WB and the EBRD was revealed, despite the shift in emphasis caused by COVID-19. Renewable energy, energy efficiency, and clean transportation remain the primary directions of the WB, and the EBRD green projects amounted to more than 60% of total projects funding. The geography of green projects financed through the WB and the EBRD green bonds indicates that green projects are receiving significant funding from countries facing environmental challenges and demonstrating intent to green transition (the WB – China and India, the EBRD – Turkey, Poland, and Egypt). Supranational financial institutions were the first to come to the forefront of sustainable development funding and are now spearheading the creation of new financial instruments aimed at financing both green and social projects, leading to the emergence of sustainability bonds.

Acknowledgment(s)
The authors would like to thank the participants of the 1st International Conference on Sustainable Development (SDL 2021) for providing the valuable remarks and a fruitful discussion. This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Type of the article: Research Article

Abstract
This study investigates the impact of greenwashing in ESG disclosure on firms’ ability to create shared value (CSV) by focusing on the mediating roles of disclosure quality and information asymmetry across different institutional contexts. The analysis is based on 391 firm-year observations of non-financial companies listed in Indonesia (277) and Malaysia (114) from 2018 to 2023, based on annual reports, sustainability disclosures, and Refinitiv ESG data. Random-effects panel regressions and bootstrapped mediation tests were used to evaluate direct and indirect effects. The results showed that greenwashing does not exert a significant direct influence on CSV in either country. However, in Malaysia, greenwashing significantly reduces information quality, which, in turn, undermines shared-value creation (indirect effect is significant). In Indonesia, although greenwashing negatively affects information quality, the subsequent link between disclosure quality and CSV is insignificant, resulting in no mediation effect. ESG disclosure quality, as a proxy for information asymmetry, does not mediate the greenwashing–CSV relationship in either country. These findings highlight the cross-country differences shaped by institutional environments: stronger regulatory oversight and stakeholder scrutiny in Malaysia amplify the mediating role of disclosure credibility, whereas weaker governance in Indonesia attenuates its relevance. This study contributes to the sustainability accounting literature by integrating symbolic compliance theory with the CSV framework and provides evidence that the credibility of ESG information is a critical determinant of value creation in emerging economies.

Acknowledgment
We express our gratitude to the Faculty of Economics and Business, Universitas Brawijaya, Indonesia, and the Faculty of Business and Economics, Universiti Malaya, Malaysia, for supporting this research collaboration.