Environmental issues have a considerable impact in all economic sectors, also influencing financial markets. As a result, environmental, social, and governance (ESG) awareness is rising in the financial sector. In this perspective, the concept of circular economy (CE) assumes central relevance. The aim of our study is to investigate the relationship between CE strategies and market performance; to this end, we use ESG scores as a proxy for CE. Our initial assumption is that since CE is a component of the “E” factor—in that it can generate positive and measurable environmental impacts—then it can be associated with the ESG score. Therefore, we can methodologically overcome the lack of a specific score related to CE. We use a preselection model based on historical performance by verifying the percentages of the presence of stocks in the two selected indices, namely ESG Euro Stoxx 50^® and Euro Stoxx 50-ESG. Overall, we find that ESG profiles have a positive impact on stock performance, although ESG scores do not express higher performance per se. Furthermore, our analysis shows that, to date, there is no evidence that CE initiatives can influence stock returns.

Purpose: The paper aims to investigate the role of the network in managing the tradition and innovation paradox in the agribusiness industry. In particular, this study aims to demonstrate that agribusiness firms can innovate through tradition by joining a network, to capture the way intellectual capital (IC) is created, shared and transformed.Design/methodology/approach: The authors approached the study using the social capital conceptual framework, considering the network a critical determinant of social capital, which enhances the organization's ability to share, create and utilize knowledge. Then, the authors also employed the extended territorial strategy theory. The authors derived empirical evidence from companies belonging to the PGI-labeled Consortium of Pasta di Gragnano (Consortium). The authors used a quantitative approach, carrying out a panel data analysis.Findings: The results suggested that belonging to Consortium had a positive impact on the operating performance, the financial performance and the environment where consortium firms operate. Thus, being part of a network helps firms to innovate in a traditional industry.Research limitations/implications: The evidence of this work provided several implications for managers, IC community and the policy public. For managers, the authors observed that agribusiness firms can preserve their traditions through knowledge sharing with firms that operate in the same network. For IC community, the authors contributed to the debate on the social capital theory, arguing that the one area of IC that has received significant attention is the role of the network, which enhances the organization's ability to generate, share and apply knowledge effectively (Lin, 2017; Solitander and Tidström, 2010). Finally, the authors argued that policymakers should implement new reforms that facilitate the formation of networks, especially in socio-economic contexts where the unemployment rate is high.Originality/value: This is the first study that employs quantitative analysis to investigate this paradox.

The purpose of this paper is to study the impact of environmental, social, and governance (ESG) practices on banks’ reputation and market performance. In particular, we aim to analyse whether banks adopting ESG-compliant practices can reduce their reputational damage due to financial sanctions and increase their market performance. In order to demonstrate the effect of banks’ ESG practices in reducing reputational damage due to financial penalties imposed by supervisors for breaches of regulatory requirements, we analyze a sample of 21 banks — selected because of the availability of information on sanctions imposed by the supervisory authorities — by applying a pre-selection model based on the trend of historical returns. With reference to the selected sample, we verify the percentage of securities characterized by different levels of sanctions and different ESG scores. Overall, we find that ESG aspects have a positive impact on stock performance, although higher ESG scores do not, per se, mean a lower probability of sanctions. Differing from previous research, our study, by focusing on financial sanctions, provides useful insights concerning the ESG impact on both market performance and reputational aspects.