Accepted author manuscript, 623 KB, PDF document
Available under license: CC BY: Creative Commons Attribution 4.0 International License
Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Exploring the Effect of Enterprise Risk Management for ESG Risks Towards Green Growth
AU - Shah, Syed Quaid Ali
AU - Lai, Fong-Woon
AU - Shad, Muhammad Kashif
AU - Hamad, Salaheldin
AU - Ellili, Nejla Ould Daoud
PY - 2025/1/23
Y1 - 2025/1/23
N2 - Purpose: Despite the growing emphasis on sustainability and the need to manage environmental, social, and governance (ESG) risks, the direct relationship between enterprise risk management (ERM) and green growth (GG) has not been investigated. This study seeks to fill this gap by examining the effect of ERM on the GG of oil and gas (O&G) companies in Malaysia. Design/methodology/approach: The study used panel data regression models to analyze panel data from 2012 to 2021. For computing GG, we adapted the Organization for Economic Cooperation and Development’s (OECD) GG framework. ERM is computed using COSO and WBCSD guidelines for ESG-related risks. Weighted content analysis is used to measure ERM and GG Findings: The findings derived from the content and descriptive statistics analyses indicate a consistent and ongoing rise in the adoption of ERM practices over time. However, some companies are still in the initial stages of incorporating ERM to address ESG risks. The study’s findings unequivocally establish a substantial and positive relationship between ERM and GG. ERM drives GG by significantly influencing its environmental and resource productivity dimensions. The study further reveals that the impact of ERM on economic opportunities and policy responses, as well as the natural asset base, is statistically significant, albeit with relatively lower coefficient values. Practical implications: To enhance the legitimacy of organizations and foster positive stakeholder relationships, regulators, governments, and policymakers should actively promote the adoption of ERM standards that specifically address ESG risks, as outlined by COSO and WBCSD. This strategic alignment with risk management practices will ultimately contribute to improving green growth for organizations. Originality/value: To the best of the authors' knowledge, this is the first study examining ERM’s effect on GG. The study adds to the existing literature by focusing on ERM’s role in a company’s GG.
AB - Purpose: Despite the growing emphasis on sustainability and the need to manage environmental, social, and governance (ESG) risks, the direct relationship between enterprise risk management (ERM) and green growth (GG) has not been investigated. This study seeks to fill this gap by examining the effect of ERM on the GG of oil and gas (O&G) companies in Malaysia. Design/methodology/approach: The study used panel data regression models to analyze panel data from 2012 to 2021. For computing GG, we adapted the Organization for Economic Cooperation and Development’s (OECD) GG framework. ERM is computed using COSO and WBCSD guidelines for ESG-related risks. Weighted content analysis is used to measure ERM and GG Findings: The findings derived from the content and descriptive statistics analyses indicate a consistent and ongoing rise in the adoption of ERM practices over time. However, some companies are still in the initial stages of incorporating ERM to address ESG risks. The study’s findings unequivocally establish a substantial and positive relationship between ERM and GG. ERM drives GG by significantly influencing its environmental and resource productivity dimensions. The study further reveals that the impact of ERM on economic opportunities and policy responses, as well as the natural asset base, is statistically significant, albeit with relatively lower coefficient values. Practical implications: To enhance the legitimacy of organizations and foster positive stakeholder relationships, regulators, governments, and policymakers should actively promote the adoption of ERM standards that specifically address ESG risks, as outlined by COSO and WBCSD. This strategic alignment with risk management practices will ultimately contribute to improving green growth for organizations. Originality/value: To the best of the authors' knowledge, this is the first study examining ERM’s effect on GG. The study adds to the existing literature by focusing on ERM’s role in a company’s GG.
U2 - 10.1108/IJPPM-10-2023-0582
DO - 10.1108/IJPPM-10-2023-0582
M3 - Journal article
VL - 74
SP - 224
EP - 249
JO - International Journal of Productivity and Performance Management
JF - International Journal of Productivity and Performance Management
SN - 1741-0401
IS - 1
ER -