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- How Does the Market Value Corporate Sustainability Performance?Publication . Lourenço, Isabel C.; Castelo Branco, Manuel; Curto, José Dias; Eugénio, TeresaThis study provides empirical evidence on how corporate sustainability performance (CSP), as proxied by membership of the Dow Jones Sustainability Index, is reflected in the market value of equity. Using a theoretical framework combining stakeholder theory and resource-based perspectives, we develop a set of hypotheses that relate the market value of equity to CSP. For a sample of North American firms, our preliminary results show that CSP has significant explanatory power for stock prices over the traditional summary accounting measures such as earnings and book value of equity. However, further analyses suggest that we should not focus on corporate sustainability itself. Our findings suggest that what investors really do is to undervalue large profitable firms with low level of CSP. Firms with incentives to develop a high level of CSP not engaging on such strategy are, thus, penalized by the market.
- Factors influencing the assurance of sustainability reports in the context of the economic crisis in PortugalPublication . Castelo Branco, Manuel; Delgado, Catarina; Gomes, Sónia Ferreira; Eugénio, TeresaPurpose: the paper aims to analyse the engagement in sustainability reporting assurance (SRA) by a sample of Portuguese firms between 2008 and 2011. Design/methodology/approach: bivariate and multivariate non-parametric statistics is used to analyse some factors that influence the decision to have sustainability reports assured. Findings: results indicate that size, leverage, profitability, listing status and industrial affiliation are determinants of SRA, whereas type of ownership is not. A downward trend in sustainability reporting and its assurance was also detected. Research limitations/implications: the sample is small. Originality/value: it adds to the scarce research on SRA by providing new empirical data in a context of crisis and extends prior research by analysing the effects of listing status and type of ownership.
- Sustainability reporting and assurance in PortugalPublication . Gomes, Sónia Ferreira; Eugénio, Teresa; Castelo Branco, ManuelPurpose – The purpose of this paper is to provide a descriptive comprehensive analysis of sustainability reporting (SR) and assurance in Portugal after the onset of the most recent economic crisis. Design/methodology/approach – The authors analyze 290 sustainability reports for the years 2008, 2009, 2010 and 2011, and find those that include assurance statements and characterize them. Findings – The authors present evidence supporting the view that the Portuguese sustainability reporting assurance (SRA) market follows the international trends and suggest that the most recent economic crisis had a negative effect in terms of publication of sustainability reports but not in terms of its quality and assurance. Research limitations/implications – The authors merely provide descriptive evidence of SR and the assurance thereof in Portugal. Originality/value – The authors contribute significantly to the literature on SRA in peripheral countries and in the period of crisis.
- Environmental disclosure in response to public perception of environmental threats: the case of co-incineration in PortugalPublication . Castelo Branco, Manuel; Eugénio, Teresa; Ribeiro, JoãoPurpose: The purpose of this paper is to examine changes in levels of voluntary environmental disclosures of Cimpor and Secil in response to increased public awareness of its activities resulting from the co-incineration controversy in Portugal. Design/methodology/approach: The annual reports of Cimpor and Secil for the period 1994-2003 are analysed. The extent of environmental disclosure directly relating to the co-incineration and the locations of the co-incineration sites is also assessed. Findings: Findings suggest that Cimpor used environmental disclosure as a mechanism of managing its legitimacy which was threatened by the co-incineration controversy. However, the strategy adopted by Cimpor may be described as one of trivializing or skirting the issue, by not directly addressing it. Secil has directly addressed the issue since its inception. Research limitations/implications: First, only two companies and their reaction to one environmental event are examined. Second, only annual reports are analysed. Third, the content analysis method employed simply quantifies disclosure in annual reports. Originality/value: The paper adds to the scarce research on environmental disclosure by Portuguese companies by providing new empirical data. It uses legitimacy theory in a situation in which companies are placed in the spotlight and see their legitimacy threatened not because they have done something detrimental to the environment but because the potential for detrimental environmental impacts resulting from their activities became the focus of the public and media attention.
- The impact of media pressure on corporate sustainability in the cement industry: a Portuguese case studyPublication . Eugénio, Teresa; Lourenço, Isabel C.; Morais, Ana I.; Castelo Branco, ManuelIn this study we examine the sustainability reporting practices and sustainability strategies of a leading Portuguese cement company. The Portuguese cement industry had to deal since 1997 with scrutiny and pressure because of its involvement in co-incineration of hazardous industrial waste. Grounded on a lens of analysis combining legitimacy theory and media agenda-setting theory and based on a content analysis of sustainability reports and semi-structured interviews, we analyse the strategies used by the company to deal with said scrutiny and pressure and present its sustainability performance. Media pressure does seem to have impacted sustainability reporting and sustainability strategies as tools for the company to restore its legitimacy. Findings generally suggest that strategies of communication designed to legitimate the company actions were used. In particular, we suggest that the company managed its legitimacy by using simultaneously two sustainability reporting strategies: one of image enhancement and other of avoidance of threatening topics.