Lecture 4-Stakeholder Management Flashcards
What did (Piyasinchai et al, 2021) find?
That ESG conformity is celebrated by the market
Why can conformity also become liabilities?
During high criticism, conforming to ESG standards can be penalized
What encourages greater conformity in sustainability practices within an industry?
High uncertainty.
What are three benefits of ESG conformity?
Enhanced legitimacy, lower perceived risks, higher firm valuation.
What are two costs of ESG conformity?
Less strategic differentiation, less competitive advantage.
Why is greenhushing problematic?
Because it hides a company’s true environmental impact. -> difficult for stakeholders’ decisions
What are the four potential causes of greenhushing?
1) No one knows about it
2) Less contextual distinctiveness
3) Avoid boycotts
4) Risk of being hypocritical
Why is optimal distinctiveness in ESG practices challenging?
Spillover effects from peers and public criticism.
How can firms align with stakeholders to solve big problems?
By working together to address environmental impacts.
Why can private companies sometimes solve problems better than governments?
They can create long-term plans and partnerships with local stakeholders.
