Skip to main content
Springer Nature Link
Log in

Study of Relationship Between the Corporate Governance Factors and ESG Ratings of ICT Companies from the Developed Markets

  • Conference paper
  • First Online:
Internet of Things, Smart Spaces, and Next Generation Networks and Systems (NEW2AN 2021, ruSMART 2021)

Part of the book series: Lecture Notes in Computer Science ((LNCCN,volume 13158))

  • 990 Accesses

Abstract

Assessment of corporate governance determinants of ESG ratings is a task of high interest for researchers and practitioners in project management in information and communication industry (ICT). This is underpinned by the growing interest to responsible and sustainable investing. We analyzed key drivers of governance pillar of ESG ratings of ICT companies in the developed markets. The relevance of the topic was underpinned by significant share of the governance in overall ESG assessment of ICT projects. The paper filled research gaps because existing studies on the topic did not address the governance practices specifically in ICT companies. Conversely, the conclusions for some governance drivers were controversial or incomplete. Data were collected for 80 telecommunication and IT companies between years 2005–2019. The dependent variable was Refinitiv ESG rating. The set of explanatory variables consisted of corporate governance activities labeled as best practices in the literature. It was found that existence of corporate social responsibility (CSR) committee, CEO duality, presence of non-executive members in the board, policy independence and chairman’s past experience and continuity have positive and significant effect on ESG ratings of ICT companies. The presence of non-executive members in the board had marginal effect on ESG ratings. The growing representation of women in boards and management had positive but marginal effect on ESG score. The results can be used in practice for making recommendations for the development of managerial actions aimed at increase in ESG ratings.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

Notes

  1. 1.

    US SIF and US SIF Foundation. Report on US Sustainable, Responsible and Impact. Investing Trends (2018).

  2. 2.

    Women in the ICT sector. European institute for gender equality, https://eige.europa.eu/publications/work-life-balance/eu-policies-on-work-life-balance/women-in-ict, last accessed 2021/06/20

References

  1. Glukhov, V., Balashova, E.: Economics and Management in Info-Communication: Tutorial. Piter, Saint Petersburg (2012)

    Google Scholar 

  2. Technology, media and telecommunications predictions 2021. Deloitte Insights. https://www2.deloitte.com/content/dam/insights/articles/US93838_TMT_Predictions_2021/DI_2021-TMT-predictions.pdf, Accessed 20 June 2021

  3. Rittenhouse, G., Goyal, S., Neilson, D.T., Samuel, S.: Sustainable telecommunications. In: 2011 Technical symposium at ITU telecom world, pp. 19–23. International telecommunication union, Geneva (2011)

    Google Scholar 

  4. Renneboog, L., Ter Horst, J., Zhang, C.: Socially responsible investments: institutional aspects, performance, and investor behavior. J. Bank. Finan. 32(9), 1723–1742 (2008)

    Article  Google Scholar 

  5. Governance and Accountability Institute. Flash report: 85% of S&P 500 index® companies publish sustainability reports in 2017. https://www.sustainability-reports.com/85-of-sp-500-index-companies-publish-sustainability-reports-in-2017. Accessed 20 June 2021

  6. Barbero, E.R., Marchiano, M.: Stakeholders or shareholders? Board members’ personal values and corporate identity. Revista brasileira de gestão de negócios 18(61), 348–369 (2016)

    Google Scholar 

  7. Jones, T.M.: Ethical decision making by individuals in organizations: an issue-contingent model. Acad. Manag. Rev. 16(2), 366–395 (1991)

    Article  Google Scholar 

  8. Guenster, N., Bauer, R., Derwall, J., Koedijk, K.: The economic value of corporate eco-efficiency. Eur. Financ. Manag. 17(4), 679–704 (2011)

    Article  Google Scholar 

  9. Mohmmad, M., Waisuzzaman, S.: Environmental, social and governance (ESG) disclosure, competitive advantage and performance of firms in Malaysia. Clean. Environ. Syst. 2(100015), 725–731 (2021)

    Google Scholar 

  10. Ge, W., Liu, M.: Corporate social responsibility and the cost of corporate bonds. J. Account. Public Policy 34(6), 597–624 (2015)

    Article  Google Scholar 

  11. Brammer, S., Brooks, C., Pavelin, S.: Corporate social performance and stock returns: UK evidence from disaggregate measures. Financ. Manage. 35(3), 97–116 (2006)

    Article  Google Scholar 

  12. McGuire, J.B., Sundgren, A., Schneeweis, T.: Corporate social responsibility and firm financial performance. Acad. Manag. J. 31(4), 854–872 (1988)

    Google Scholar 

  13. Aupperle, K.E., Carroll, A.B., Hatfield, J.D.: An empirical examination of the relationship between corporate social responsibility and profitability. Acad. Manag. J. 28(2), 446–463 (1985)

    Google Scholar 

  14. Horváthová, E.: Does environmental performance affect financial performance? A meta-analysis. Ecol. Econ. 70(1), 52–59 (2010)

    Article  Google Scholar 

  15. MSCI. MSCI ESG Ratings Methodology. https://www.msci.com/documents/1296102/21901542/MSCI+ESG+Ratings+Methodology+-+Exec+Summary+Nov+2020.pdf, Accessed 20 June 2021

  16. The ESG Risk Rating: Frequently Asked Questions for Companies. Sustainalytics. https://www.sustainalytics.com/esg-research/resource/sfs-brochures/the-esg-risk-rating-frequently-asked-questions-for-companies, Accessed 20 June 2021

  17. Lu, J., Wang, J.: Corporate governance, law, culture, environmental performance, and CSR disclosure: a global perspective. J. Int. Finan. Mark. Instit. Money 70, 101624 (2021)

    Google Scholar 

  18. Velte, P.: Women on management board and ESG performance. J. Glob. Responsib. 7(1), 98–109 (2016)

    Article  Google Scholar 

  19. Ferrero-Ferrero, I., Ángeles, F.-I., Jesús, M.-T.: Integrating sustainability into corporate governance: an empirical study on board diversity. Corp. Soc. Responsib. Environ. Manag. 22(4), 193–207 (2013)

    Article  Google Scholar 

  20. McCullagh, P.: Regression models for ordinal data. J. Roy. Stat. Soc. B 42, 109–142 (1980)

    MathSciNet  MATH  Google Scholar 

  21. Refinitiv environmental, social and governance (ESG) scores. https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/refinitiv-esg-scores-methodology.pdf, Accessed 20 June 2021

  22. Bear, S., Rahman, N., Post, C.: The impact of board diversity and gender composition on corporate social responsibility and firm reputation. J. Bus. Ethics 97(2), 207–221 (2010)

    Article  Google Scholar 

  23. Shaukat, A., Qiu, Y., Trojanowski, G.: Board attributes, corporate social responsibility strategy, and corporate environmental and social performance. J. Bus. Ethics 135(3), 569–585 (2016)

    Article  Google Scholar 

  24. Derue, V.: Putting ESG to work: a case study in the telecoms sector. https://realassets.axa-im.com/content/-/asset_publisher/x7LvZDsY05WX/content/ri-putting-esg-to-work-a-case-study-in-the-telecoms-sector/23818, Accessed 20 June 2021

  25. Tataru, I.M., Fleaca, E., Fleacă, B.: Insights on the impact of telecommunication companies on the environment. In: Proceedings of the International Conference on Business Excellence vol. 14(1), pp. 202–213. Society of business excellence, Romania (2020)

    Google Scholar 

  26. Kim, O., Kuang, Y.F., Qin, B.: Female representation on boards and CEO performance induced turnover: evidence from Russia. Corp. Govern. Int. Rev. 28, 235–260 (2020)

    Article  Google Scholar 

  27. Moss, M.L., Kaufman, S.M., Townsend, A.M.: The relationship of sustainability to telecommunications. Technol. Soc. 28(1–2), 235–244 (2006)

    Article  Google Scholar 

  28. Kim, S., Li, Z.F.: Understanding the impact of ESG practices in corporate finance. Sustainability 13, 3746 (2021)

    Article  Google Scholar 

  29. Grishunin, S., Suloeva, S., Nekrasova, T.: Development of the mechanism of risk-adjusted scheduling and cost budgeting of R&D projects in telecommunications. In: Galinina, O., Andreev, S., Koucheryavy, Y. (eds.) NEW2AN ruSMART 2018, LNCS, vol. 11118, pp. 456–470. Springer, Heidelberg (2018). https://doi.org/10.1007/978-3-030-01168-0_41

    Chapter  Google Scholar 

  30. Dimson, E., Marsh, P., Staunton, M.: Divergent ESG ratings. J. Portfolio Manag. 47(1), 75–86 (2020)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. National Research University Higher School of Economics, Moscow, Russia

    Sergei Grishunin & Alexandra Erorova

  2. Peter the Great St. Petersburg Polytechnic University, St. Petersburg, Russia

    Svetlana Suloeva & Tatyana Nekrasova

Authors
  1. Sergei Grishunin
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Svetlana Suloeva
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Tatyana Nekrasova
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Alexandra Erorova
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding authors

Correspondence to Sergei Grishunin , Svetlana Suloeva or Tatyana Nekrasova .

Editor information

Editors and Affiliations

  1. Tampere University, Tampere, Finland

    Yevgeni Koucheryavy

  2. FRUCT Oy, Helsinki, Finland

    Sergey Balandin

  3. Tampere University, Tampere, Finland

    Sergey Andreev

Rights and permissions

Reprints and permissions

Copyright information

© 2022 Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Grishunin, S., Suloeva, S., Nekrasova, T., Erorova, A. (2022). Study of Relationship Between the Corporate Governance Factors and ESG Ratings of ICT Companies from the Developed Markets. In: Koucheryavy, Y., Balandin, S., Andreev, S. (eds) Internet of Things, Smart Spaces, and Next Generation Networks and Systems. NEW2AN ruSMART 2021 2021. Lecture Notes in Computer Science(), vol 13158. Springer, Cham. https://doi.org/10.1007/978-3-030-97777-1_13

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-97777-1_13

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-97776-4

  • Online ISBN: 978-3-030-97777-1

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics