Abstract

As a reflection of the collective choices an organisation makes to position itself competitively, business strategy can play a crucial role in signalling a firm’s mechanism for achieving environmental, social, and governance (ESG) performance. In this context, this study offers an opportunity to glean insights into how business strategy choices influence entities' ability to navigate ESG reporting and performance obligations, especially given the growing push towards mandatory sustainability reporting regimes. Adopting an ESG compliance approach embedded in the strategic strengths of a firm can indeed be a competitive differentiator. This study investigates whether business strategy influences ESG performance and, if so, which strategy typology delivers optimal outcomes. Based on data from 45 countries, the empirical evidence suggests that business strategy can significantly impact ESG performance from an overall perspective. Further analysis of the distinct components of business strategy, based on the typologies advanced by Miles and Snow (1978), reveals that Prospector firms (i.e., those that pursue a strategy of high innovation to pioneer and maintain new products in line with market trends) have a stronger positive association with ESG performance. Collectively, the study provides important insights for managers and stakeholders to understand the consequences of strategic choices on ESG performance. Practically, it offers new intuitions to aid managers in extrapolating the intended and unintended consequences of their organisation’s strategic decisions, particularly in light of the increasing likelihood of jurisdictional mandates for sustainability reporting following the release of the IFRS sustainability standards.

Bio of The Speaker

Olayinka (Yinka) Moses is an Academic Programme Leader at the Wellington School of Business and Government, Victoria University of Wellington, New Zealand, and a Professor Extraordinarius at the College of Accounting Sciences, University of South Africa. He is a Fellow of Certified Practising Accountant (Australia), and member of Chartered Accountants Australia and New Zealand. Yinka is the Chair of the CPA (Australia) ESG Committee (New Zealand Division) and the current Vice President of the African Accounting and Finance Association (AAFA). His research intersects sustainable management decisions and financial reporting, considering, among other factors, how accountability is implicated in managerial choices and corporate sustainability reporting. Yinka has been published in top-tier accounting journals such as: Accounting, Auditing & Accountability Journal; Financial Accountability & Management; Journal of Accounting Literature; Accounting and Finance; Journal of Contemporary Accounting & Economics; Pacific-Basin Finance Journal; and Meditari Accountancy Research, among others. Additionally, he holds influential editorial roles in several journals, contributing to the dissemination of knowledge and the advancement of the accounting profession. He continues to provide professional and academic leadership through insights from his research, assisting companies and professional accounting organisations in strategising their reporting practices in light of changing sustainability reporting requirements across jurisdictions, especially in developing countries.

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