Environmental Social Governance Management: A Theoretical Perspective for the Role of Disclosure in the Supply Chain

This study proposes to examine the empirical association and relationship between voluntary disclosure of environmental, social, and governance management activity/practices and business performance, by investigating their causal effects. More specifically, employing data for the largest and most valued U.S. stock-listed corporations, this study proposes to examine both the impact of voluntary disclosure of environmental, social, and governance management activity/practices on business performance, and the impact of business performance on voluntary disclosure of environmental, social, and governance management activity/practices, using a lag of E, S, G, ESG and BP variables. Stakeholder theory, institutional theory, and resource-based view (RBV) theory of the firm suggest that differentiation in capabilities and in resources, developed through inter-organizational workings among supply chain members, is a primary source of improved performance and sustained competitive advantage. This working together, or collaboration among supply chain members, can equally benefit other domains, including environmental, social, and governance areas, and their voluntary disclosures. Keywords: disclosure; environmental disclosure; social disclosure; governance disclosure; ESG disclosure; ESG reporting; supply chain.