Mapping the ESG Behavior of European Companies. A Holistic Kohonen Approach

Irina-Eugenia Iamandi, Laura-Gabriela Constantin, Sebastian Madalin Munteanu and Bogdan Cernat-Gruici
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Laura-Gabriela Constantin: Faculty of International Business and Economics, The Bucharest University of Economic Studies, 6 Romană Square, 010374 Bucharest, Romania
Sebastian Madalin Munteanu: Faculty of Management, The Bucharest University of Economic Studies, 6 Romană Square, 010374 Bucharest, Romania
Bogdan Cernat-Gruici: Faculty of International Business and Economics, The Bucharest University of Economic Studies, 6 Romană Square, 010374 Bucharest, Romania

Sustainability, 2019, vol. 11, issue 12, 1-41

Abstract: In the context of increased awareness for complying with the multiple requirements for sustainable development, the stakeholders need to have the proper information for analyzing the corporate behaviors from various perspectives. Thus, the purpose of this research is to investigate and map the sustainability patterns of European companies at the beginning of 2019, in order to uncover valuable insights into the corporate sustainable behaviors. The Environmental, Social and Governance (ESG) performances of 1165 European companies were considered by applying the Kohonen neural network for clustering purposes at three main levels: (1) ESG overall level, including country and sectoral perspectives; (2) ESG thematic level; (3) ESG four-folded innovative level (stakeholder, perspective, management level and focus views). All three analyses carried out show a three-clustering solution—Lower, Middle and Higher ESG clusters. Most firms are top ESG performers and the companies with good ESG scores also have more related controversies. The results highlight the sustainability profiles of the examined companies. Firstly, the environmental and social priorities are preferred over corporate governance targets. Secondly, companies tend to implement a business-customized ESG approach for achieving organizational efficiency and competitiveness. Thirdly, there is a higher consideration of employees, external-directed measures, operational issues and process-orientation in the corporate ESG performance and development. The ESG approach of the European reporting companies is mainly mature, strategic and long-term oriented, aimed to increase the corporate competitiveness and to support the societal well-being altogether.

Keywords: environmental, social and governance (ESG) performance; sustainable development; sustainable behavior; comparative analysis; cluster; Kohonen neural network; self-organizing map (SOM); European companies; economic sectors; ESG innovative scores (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:12:p:3276-:d:239658

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