In recent years, more and more companies have noted the significance of addressing serious social and environmental issues, and various sustainability strategies have been implemented to ensure sustainable competitive advantage. An urgent issue is how to integrate sustainability strategy-related goals and key performance indicators (KPIs) into performance evaluation and compensation systems, and how to integrate employees’ awareness of environmental protection and social contribution into their daily work. This study examines management tools that can link sustainability strategies with sustainability performance evaluation and compensation systems. Specifically, the balanced scorecard (BSC) is positioned as a management tool for measuring, evaluating, and managing sustainability performance, with a particular focus on the sustainability balanced scorecard (SBSC), which incorporates economic, environmental, and social factors. The purpose of this study is to clarify the role of sustainability performance assessment and management in sustainability management based on previous studies and cases of advanced companies that have introduced SBSC, such as the Generali Group, and to systematically evaluate the functions and usefulness of SBSC as a sustainability performance assessment and management tool. The findings indicate that the SBSC is an effective management tool for improving sustainability performance and implementing sustainability strategies

Are dividend changes informative? If yes, do they convey information about future earnings? Given the importance of the issue to corporate finance and because of the puzzling results of previous studies, we investigate the association among dividend changes, stock returns, and future earnings. Following 928 French and 995 German firms from 1991 to 2010, we expect that only those dividend changes will be positively associated with future earnings that result in abnormal stock returns. Inconsistent with our expectations, we find that the association between current dividend changes and future earnings changes for firms with the highest abnormal returns in the dividend change direction is not stronger than the rest of the firms. These findings cast doubt on the signaling theory, which claims that dividend changes convey information about changes in future earnings.

In the wake of the COVID-19 crisis, there has been a growing interest in investigating how stock markets behave during times of uncertainty and crisis. This is because it has been shown that stock prices seem to disconnect from fundamentals during moments of extreme uncertainty. Using earnings and returns data from publicly traded corporations for the twelve months beginning January 1, 2020, we assessed the performance of major industrial sectors during COVID-19. We also investigated the concurrent earnings/returns relation to discover whether earnings changes convey useful information during times of high uncertainty. Following prior literature along similar lines, we used firm-level earnings and returns data and estimated cross-sectional regressions to examine the earnings/returns relation. We found considerable variation in the earnings and returns data across and within the industrial sectors. Our results mostly showed a positive relationship between accounting income and concurrent stock returns, implying that accounting earnings numbers were value relevant during the pandemic. Positive earnings news (earnings increases) seemed to generate a greater market response than negative earnings news (earnings drops), leading to a shift in the overall stock market's outlook from negative to positive in the second half of 2020. These findings will help the decision-making of investors, creditors, policymakers, financial analysts, and other stakeholder groups.

Prior research states that during extreme uncertainties stock prices deviate from their fundamentals. This study examines the cross-section of share price returns during the COVID-19 and pre-COVID periods to determine how investors’ reaction to prior earnings volatility is affected by the COVID-19-induced ambiguity. The sample consists of 840 firms listed on the New York Stock Exchange (NYSE) from January 1, 2020 to May 31, 2021. Consistent with the notion that ambiguity-aversion is not a universal phenomenon, COVID-period stock returns exhibit a positive (β = 0.23) and statistically significant relationship with prior earnings volatility. In contrast, the stable period returns show a very weak, if any, correlation with prior earnings volatility. The positive relationship is more pronounced for firms that experience greater information asymmetry. When comparing the results with previous research, it appears that different crises evoke varied levels of ambiguity-aversion possibly because of the ways in which each crisis’s features and anticipated outcomes influence how the market reacts. Thus, before crafting responses to a crisis, policymakers and firms should thoroughly examine the crisis and identify the underlying causes, dynamics, and possible effects on decision-makers’ ambiguity-aversion behavior.

Prior research generally reports a positive relationship between firm-level accounting earnings surprises and contemporaneous stock prices, indicating that accounting earnings carry value-relevant information. Recent studies, however, show that investors respond negatively to unexpected changes in aggregate earnings. These findings present a puzzle for researchers. We examine the earnings/return association at the firm- and aggregate-level using a dataset of all publicly listed US REITs from 1998 to 2018. The analysis aims to know whether the negative association between the two variables exists in industry-level data, specifically REITs. We fail to find an inverse relationship between aggregate earnings changes and concurrent stock returns in REITs; yet, our data support the notion that aggregate level accounting income is relatively more predictable than firm-level income. Our results indicate that the previously observed negative aggregate earnings/return relation seems to be triggered by information transfer across various industrial sectors.