Carrot and stick? The role of financial market intermediaries in corporate social performance

Slager, R and Chapple, W ORCID: https://orcid.org/0000-0003-1834-8075, 2016. Carrot and stick? The role of financial market intermediaries in corporate social performance. Business & Society, 55 (3), pp. 398-426. ISSN 0007-6503

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Abstract

In this paper we examine the role of intermediaries in financial markets in fostering corporate sustainability. Responsible Investment (RI) indices have been primarily identified as intermediaries that provide information regarding Corporate Social Performance (CSP) for investors and other stakeholders (Doh et al. 2010, Consolandi et al. 2009). We argue that the role of these intermediaries is not confined solely to information provision, but they may also incentivize high levels of CSP through mechanisms such as exclusion threats, signalling, and engagement. We rely on unique access to the archives of the FTSE4Good Index to examine the effects of these mechanisms on CSP. The study shows that companies facing exclusion threats and signalling are more likely to comply with the intermediary's criteria, and medium levels of engagement leads to higher levels of CSP. We contribute to the study of sustainability in financial markets by explicating the mechanisms that intermediaries and other financial actors could employ in order to foster greater corporate sustainability.

Item Type:	Journal article
Publication Title:	Business & Society
Creators:	Slager, R. and Chapple, W.
Publisher:	Sage
Date:	March 2016
Volume:	55
Number:	3
ISSN:	0007-6503
Identifiers:	Number Type 10.1177/0007650315575291 DOI
Divisions:	Schools > Nottingham Business School
Record created by:	Linda Sullivan
Date Added:	23 Jan 2018 16:12
Last Modified:	23 Jan 2018 16:12
URI:	https://irep.ntu.ac.uk/id/eprint/32525

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