Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy

Nội dung text: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy

1. International Journal of Energy Economics and Policy ISSN: 2146-4553 available at http: www.econjournals.com International Journal of Energy Economics and Policy, 2021, 11(2), 172-186. Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy Le Thanh Tiep1*, Ngo Quang Huan2, Tran Thi Thuy Hong3 2 1Ho Chi Minh City University of Economics and Finance, Vietnam, University of Economics Ho Chi Minh City, Vietnam, 3International School of Business, University of Economics Ho Chi Minh City, Vietnam. *Email: tieplt@uef.edu.vn Received: 02 September 2020 Accepted: 18 December 2020 DOI: ABSTRACT This research aims to evaluate the impact of corporate social responsibility (CSR) on sustainable energy development (SED) by developing the role of mediating variables such as usage of renewable energy resources (URR) and sustainable energy supply (SES). We use qualitative and quantitative technique such as Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze the data of collection from experts, economists, executives in Vietnam in 2020. The study has proved the corporate social responsibility (CSR) affecting directly to the sustainable energy development (SED). Besides, the findings suggest a positively significant impact of both sustaining energy supply (SES) and the usage of renewable energy resources (URR) on sustainable energy development (SED). Thus, the research brings the whole view of corporate social responsibility affects to the sustainable energy development (SED) through the URR and SES. This study contributed empirical work in the literature of corporate social responsibility, renewable energy, sustainable energy supply (SES) and sustainable energy development (SED). The outcomes of this study can be used by policy makers, economists, top management in the governmental office and even the corporate. A mediating role of SES as a value-added contribution to this study and can be consolidated and strengthened more in coming research. Keywords: Corporate Social Responsibility, Renewable Energy, Sustainable Energy Development, Renewable Energy Resources, Sustaining Energy Supply JEL Classifications: M14, Q21, Q25, Q43, Q56 1. INTRODUCTION in the 21st century, however, one of the major challenges facing business today is determination of their potentials for changing and Corporate social responsibility (CSR) and sustainable development precisely allocating resources where they will be most effective are general terms which are concerned more and more by and make the biggest difference (Carroll and Shabana, 2010). economists, entrepreneurs and economical-related policy makers McGuire et al. (1988) analyzed fortune 500 companies and found over the world. In recent years, organizations and business that companies with no social responsibility are often unable to community have come to realize that they are responsible for the execute their strategies effectively and stock value will hardly environment and the communities in which they operate, placing increase up. On the other hand, socially responsible businesses more responsibility than just making profits for their shareholders often interact well with customers, shareholders and communities, as before. This growing awareness in the entrepreneurial whereby they can reduce business risk and improve their credit community leads to an increased concept of corporate social to customers. As a result, customers will continue to support responsibility (CSR) in relation to importance and meaning those businesses, meanwhile, easily to accept new products or (Carroll and Shabana, 2010). Enterprise is considered as a cell of services that created by those businesses. This will help those society and is one of the most powerful forces of change possibility businesses to stay sustainable and competitive. As Porter et al. This Journal is licensed under a Creative Commons Attribution 4.0 International License 172 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021
2. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy (2011) pointed out that, if a corporation succeeds in achieving in the polar region, and the management of human wastes, mainly both economic and social goals at the same time, it will gain plastic in seas, are some of the main points to be addressed by a competitive advantage compared to the competitors. A good these novel policies. Several actions must be implemented in strategy, advanced technology and innovation are considered order to limit such issues. As a forecast by Vietnam Business important factors to enhance competitiveness of organization, Council for Sustainable Development (2020), the world will however putting ethics and responsibility into action is same face the risk of serious energy shortages by 2030 and need about priority in relation to enhancement of competitive advantage of 10.5 trillion euros of investment in this industry. Therefore, it is enterprise. By applying CSR in practice, a corporation not only extremely important to efficiently use energy and environment assures its obligations and responsibilities towards society and friendly to ensure energy security and sustainable development. the environment, but also, according to relevant strategic studies, However, doing this is not easy. With the current rate of energy enhances its competitive advantage and sustainable development. consumption, the world’s traditional energy sources are predicted to be quickly depleted. According to forecasts, by 2035 global Additionally, according to Wani and Mir (2015), “Energy is the energy consumption will increase by 53%, and businesses around engine of economic growth, as all production and consumption the world are constantly researching to find clean energy sources. activities involve energy as basic input. It is considered to be the Also according to the APEC report, if the energy consumption crucial element in the socioeconomic development of a country intensity is not reduced, energy demand in the region will increase as it helps to improve the living standards of the society through equivalently to economic growth, about 225% until 2035. the increase in economic growth.” Accordingly, on the production side point of view, energy is considered as important as other In addition, nowadays, the habit of using fossil fuels has increased input factors of economic activities such as labor, capital and land environmental concerns. The burning of fossil fuels generates while on the consumption point of view, energy consumption and about 21.3 billion tons of carbon dioxide annually. Carbon income has a significant correlation or in other words, any forms dioxide is one of the greenhouse gases that increase radioactivity of energy consumption can drive economic productivity. Those and contribute to global warming, causing the average surface lead to economic growth and prosperity that drive enhancement temperature of the earth to rise. The world is moving towards using of gross domestic product (GDP) and GDP per capita. However, renewable energy sources as one of the ways to help solve the economic growth and prosperity should not simply rely on the problem of increasing energy demand and environmental related energy input availability but how energy be utilized. In the current problems (Steve, 2011). In addition, a study of more than 190 global competition, it matters that resources are efficiently used, countries shows that Vietnam ranks 23rd among the most vulnerable same true for energy input. Sustainable energy is energy that economies to climate change. This shows the negative impact is consumed in a negligible proportion to its supply and with that environmental problems can have on low-income people manageable side effects, especially environmental impacts. and their livelihoods. The current imbalance between energy Sustainable energy is an energy system that serves the needs of supply and demand is a direct threat to the economy and society. the present without harming the needs of future generations. This However, Vietnam has abundant renewable energy sources such as key principle for sustainability is sustainable development, which bioenergy, hydropower, solar energy, wind or geothermal energy encompasses four interconnected areas such as ecology, economy, and so on which can be transformed into the sustainable energy politics and culture. Sustainable energy development aims to supply to meet the increased demand of energy for economic advance economic development, improve energy security, improve growth and life qualification. However, along with potentials of access to energy, and mitigate climate change. The major sources sustainable energy development and increased demand of energy, of sustainable energy are renewable such as hydroelectricity, solar still exist numerous challenges that energy companies are facing energy, wind energy, wave energy, geothermal energy, bioenergy, in relation to finance capacity, lack of synchronous alignment, tidal energy. To that effect, promoting the use of renewable energy technology, infrastructure, governmental policy and mechanism. and ensuring access to affordable, reliable, sustainable, and modern These challenges need motivation to be properly addressed so energy for citizens enable driving sustainable development (Rajesh it’s necessary to discover that dynamic as a catalyst for driving and Majid, 2020). In addition, according to REN21 (2019), these challenges (Industry and Trade Magazine, 2020). Energy renewable energy is determined as a source of energy which industry and energy related industries are known sensitive in is not exhausted by use. Sources of renewable energy typically relation security, economy, environment and society. Weder et include wind, solar, water, biomass and geothermal heat. As a al. (2019) implied that most companies those are operating in the result, “Renewable energy plays a significant role in sustainable energy industry and energy-related industries still struggling in and inclusive economic growth.” finding ways to deal with sustainable development goals while stay friendly to environment. In addition, most of them have perception According to Vietnam Business Council for Sustainable of CSR differently in relation to the practical significance of CSR Development (2020), numerous countries have recently realized and how it’s correlated to the sustainable development in relation that the present development paradigm is not sustainable from an to demand and supply points of view. Consequently, degrees of environmental and energy point of view. The growing awareness attention and intensity vary, most companies are struggling in of the population regarding environmental issues is pushing linking CSR to their core business. governments worldwide more and more to promote policies aiming at limiting harmful affects of human development. In Additionally, REN21 (2019) reported that the global energy particular, the rapid increase of the global temperature, especially demand trend has been moving from fossil fuel-dependent base International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021 173
3. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy to renewable resources. The problem now is the speed and ability Furthermore, according to Weder et al. (2019), on the practical of energy providers to respond to this change to succeed and be point of view, CSR concept is differently determined and perceived competitive. Thus, a depth and consistent perception and the by different global energy companies regardless of size and market speed of this conversion is set to the high priority level for global position (Wicks, 2001). Those are some cases of large energy supply sustainable development of socioeconomy and environment. companies operating at the international scale whose perceptions Accordingly, restructuring of global energy by increasing the of CSR is headed on their own view and that effect their strategic transition to renewable energy is an urgent requirement for every CSR activities and their ways of implementation of CSR activities country in relation to the mission to protect the environment, such as RWE whose perception of CSR as “responsibility” (RWE, reduce emissions into the atmosphere and reduce global warming. 2018); EON whom perceives CSR concept as “sustainability” Therefore, a comprehensive understanding of the CSR related (EON, 2018); Gazprom which employs the terms “environment driving factors for increasing in the use of renewable energy and social responsibility” for CSR strategic activities (Gazprom, resources and its impact on sustainable energy supply and 2018b); ENEL whose operation is governed by the four core sustainable development is critical for the relevant stakeholders principal based which are “responsibility, innovation, trust and such as policymakers, innovators, project developers, investors, proactivity” (ENEL, 2016) and its CSR activities are governed by industries, associated stakeholders and departments, researchers, the terms “sustainability” (ENEL, 2018); AEP with CSR activities and scientists for the proper strategic actions in the future. This are obviously focus on environment section by spending efforts to paper aims to contribute to the existing literature in relation to reduce pollution and enhance energy efficiency by increasing the the impacts of CSR on transformation process of renewable use of renewable sources towards “environment sustainability” energy supply and demand and the roles renewable energy to the (AEP Energy, 2018); Engie SA whose CSR strategy orientated as a socioeconomic growth and sustainable development in emerging leader in the new “low-carbon economy,” “for which it paints the country like Vietnam. future scenario of access to and security of sustainable energy as well as climate-change mitigation and adaptation” while towards This study is subjected with the research questions included (1) diverse stakeholders such as children, employees or the society “How do the existing energy companies perceive of CSR in Vietnam in general (Engie, 2018); KEP whereby CSR strategy towards context?” (2) “How do the existing energy companies perform “sustainability” which is broadly categorized into 4 divisions such CSR in Vietnam context?” (3) “How does CSR performance of the as sustainability management, ethical management, environmental existing energy companies impact on the transformation process of management and social contribution that create the company sustainable energy in Vietnam?” and (4) “How sustainable energy around full-circle which combines all relevant aspects of CSR in development be achieved in Vietnam context?” its sustainable strategy (KEP, 2018); Vattenfall with CSR strategy towards sustainability concept which is typically based on major This study is structured with abstract as the beginning part, pillars such as “sustainable energy consumption, sustainable followed by introduction. The main body of this study includes energy production, empowered and engaged organizations, different sections presented in order such as literature review, and high performing operations” (Vattenfall, 2018b); Kelag research model and hypothesis, research methodology, results and that defined its CSR strategy towards “sustainability” concept discussion, conclusion. The last part is the references. which emphasizes four areas in particular such as environment and climate protection, product and innovation, region and 2. LITERATURE REVIEW society, company and employees (Kelag, 2018); EVN whose CSR strategy oriented on “responsibility” concept towards 2.1. Co-operate Social Responsibility (CSR) employees, other stakeholders and society (EVN, 2018) and The concept of CSR varies from different perceptions, different OMV with CSR strategy towards “sustainability” concept focus approaches and in different contexts. Andronie et al. (2019) defined on its own conceptualization of sustainability as responding to that “corporate social responsibility is a mean for companies to society and environment related matters. This heads to stakeholder voluntarily integrate social and environmental responsibility engagement, business management towards health, safety, security into their business plan and relationship with stakeholders in and environment; human rights; eco-innovation; eco efficiency; society.” While Mỏrquez and Pộrez (2015) determined that CSR skills to succeed (OMV, 2018). is an important supportive tool in promoting environmental sustainability by improving the perception of a company in terms Besides that, on the researching point of view, Weder et al. of CSR practical significance and improving the behavior of a (2019) found that CSR has been widely recognized and company to adapt effectively to the socioeconomic context of the implemented by energy industry companies and energy related country and of the region to ensure environmental sustainability energy industries around the world. However, the magnitude and and sustainable socioeconomic development. In addition, Lloyd intensity vary from different contexts, different industries and (2018), “business has a unique role to serve social needs in that different companies. At the company level, the varying depends they utilize a large portion of resources (environmental, human on the company’s perception of CSR and company’s strategy capital, financial). As such businesses are expected to responsibly of alignment level between corporate social responsibility and process resources in a way that does not harm society. This means their core business operations. In many cases, companies are that they make explicit considerations for their work force, political struggling to link their CSR projects back to their core businesses. environment, physical environment, special interest groups, the However, the apparent politicization tendency that can be rights of citizens, and consumers.” described as a close correlation between the energy providers’ 174 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021
4. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy communication strategies and the respective national political energy system that serves the needs of the present day without programs becomes obvious. compromising the needs of future generations. The key principle for achieving sustainability is sustainable development which 2.2. Increasing in the Use of Renewable Energy cover four interconnected areas such as ecology, economy, politics Resources (URR) and culture (Rotmans et al., 2010). Renewable energy sources The concept of increase in the use of renewable energy resources play a significant role to promote sustainable energy supply which is perceived as a type of transition of consumption behavior in the include hydro energy, solar energy, wind energy, wave energy, increasing direction from traditional energy resources such as fossil geothermal energy, bioenergy, tidal energy and technologies fuels to renewable energy resources such as wind, solar, biomass, designed to improve energy efficiency. water, geothermal which are regenerative and not depleted over time (REN21, 2019). Weder et al. (2019) state that energy transition 2.4. CSR and the Increasing in the Usage of Renewable is one of the key statements in most political strategies and related Energy Resources (URR) agendas of either national wide or regional wide not just those of Lu et al. (2019) implied that the better CSR strategy and the green parties. Transformation is considered an evolving process implementation by energy companies the better contribution to over time and characterized by structural and non-linear changes protect the environment by increasing in the use of renewable (Geels and Schot, 2010). It can be defined as a long-term transition energy resources, reducing in the use of traditional energy from one economic system to another and depends on a specific set resources such as fossil fuels that leads to reduce greenhouse gas of resources (Carley et al., 2018). Changing the energy structure emissions into the atmosphere. Besides that, according to Mezher by increasing the use of renewable energy resources and reducing and Tabbara (2010), as CSR performance related, innovation the use of non-renewable important is very important in relation to of energy-related products for saving energy consuming is also security, economy, environment and society. According to Saad and important as the outcome generated is not only meaningful with Taleb (2018), consumption of non-renewable energy resources has environment but also society and economy in terms of energy negative impacts on economy, environment and society in many efficiency. forms. It’s proved that using non-renewable energy resources will harm not only to environment, public health by pollutant emitted Based on the above reviews, hypothesis of relationship between from burning fossil fuels but economy as costs from air emissions the increasing in the use of renewable energy resources (URR) to that lead to environment and health costs at the multilevel such sustainable energy supply (SES) created as follows: as personal, local, regional, national and global. An example that showed the negative contribution at a significant level as a H1. “CSR has positive relationship with the increase in the use of consequence of using non-renewable sources to environment that renewable energy resources (URR)” approximately 78 percent of the USA’s emissions were energy related emissions of carbon dioxide in 2014. This causes negative 2.5. CSR and Sustainable Energy Supply (SES) impacts on the environment in general such as air pollution, land Lloyd (2018) implied that CSR has been getting known more and pollution, water pollution; global climate change; that destroy more in the last two decades since “as a result of the plenitude of biological system, ecosystem, cause ecological imbalance, harm major corporate scandals from the early 2000s, increased media public health, social life quality and future economic sustainability coverage, emphasis in business education, academic literature on (Saad and Taleb, 2018). the subject, self-promotion of early adopters of CSR, catastrophic environmental disasters such as Exxon Valdez and Deepwater 2.3. Sustaining Energy Supply (SES) Horizon.” This leads to increasing in pressures from stakeholders Emodi and Boo (2015) stated that “sustainable development of businesses such as customers, employees, investors, and social has dramatically increased in our modern times and this raises institutions within the public sector in relation to practical CSR the issues of a sustainable economic development and growth.” actions and meaningful contribution to satisfy the expectations of In that process, sustainable energy plays a very important role its stakeholders by businesses. The expected practical contribution and becomes “one of the most promising means of handling of CSR is related to sustainable energy supply to meet the growing the challenges of energy demand problems of many consumers energy demand for socioeconomic development while protecting worldwide” (Hvelplund, 2006). Moreover, sustainable energy the environment and improving the quality of social life as the supply is a top concern in relation to energy security, energy growth of world populations will result in increased demand for all efficiency and environment protection of countries, regions and the areas of energy. Accordingly, energy firms will have to find ways globe as a whole. “Energy sustainability involves the sustainable to supply this increased demand in a context where stakeholders use of energy in the overall energy system which includes expect that businesses do using sustainable practice (Vaona, processes and technologies for harnessing of energy resources, 2016). To achieve that, Mezher and Tabbara (2010) offer ideal their conversion to useful energy forms, energy transport and proven solution that improving processes to enhance efficiency storage, and the utilization of energy to provide energy service like and utilizing renewable resources together with taking advantage lighting in homes, office, streets and cooking.” James et al. (2015) of government policy in relation to sustainable energy boosting imply that sustainable energy supply is determined when the type for sustainable energy supply. of energy consumed at a negligible rate compared to its supply and at manageable side effects, especially the environmental effects. Based on the above reviews, hypothesis of relationship between On the other hand, sustainable energy supply is defined as an CSR and sustainable energy supply (SES) created as follows: International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021 175
5. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy H2. “CSR has positive relationship with sustainable energy supply of future generation to meet their own needs” (World Commission (SES)” on Environment and Development, 1987). In addition, according to Saad and Taleb (2018), replacement of using nonrenewable 2.6. Usage of Renewable Energy Resources (URR) and energy resources with renewable energy resources will help to Sustainable Energy Supply (SES) not only sustain the energy supply, enhance the capacity of energy When applying the concept of transformation in the search of new supply to meet the increased demand but also conserve important value systems, the idea of a sustainable transformation can be primary resources for sustainable energy development for the helpful. Sustainable transition refers to a fundamental transition future generations while protect environment. towards a sustainable society, which can lead to the restructuring of systems of production and consumption (Smith et al., 2010) Based on the above reviews, hypothesis of relationship between and can be understood as a responsive change of contemporary the increasing in the use of renewable energy resources (URR) problems (Grin et al., 2010). These issues manifest during crises, and sustainable energy development (SED) created as follows: such as energy and climate crises, are interconnected and require a drastic transition from conventional energy to sustainable H4. “The increasing in the use of renewable energy resources resources (International Energy Agency, 2008). The transition (URR) has positive relationship with sustainable energy from using fossil fuels to renewable sources towards the goal development (SED)” of providing sustainable energy, it is therefore put forward with growing public concerns about energy security, energy efficiency 2.9. Sustainable Energy Supply (SES) and Sustainable as majority of sustainable energy supply (Philo and Happer, 2013). Energy Development (SED) In addition, according to Vasile and Camelia (2015), increasing According to determination and arguments of Emodi and Boo in the consumption transition from traditional energy resources (2015) and Saad and Taleb (2018), sustainable energy supply is in like fossil fuels to renewable energy resources help to reduce equation with the sustainability of use of energy in the overall energy environment pollution, save costs of dealing with environment and system that involves sustainable energy resources, processes and health related problems and sustain energy supply (Dawn, 2011). technologies. Those together with technological innovation, variety of renewable resources, consuming access possibility and price Based on the above reviews, hypothesis of relationship between affordability are fundamental for sustainable energy development. the increasing in the use of renewable energy resources (URR) and sustainable energy supply (SES) created as follows: Based on the above reviews, hypothesis of relationship between sustainable energy supply (SES) and sustainable energy H3. “The increasing in the use of renewable energy resources development (SED) created as follows: (URR) has positive relationship with sustainable energy supply (SES)” H5. “Sustainable energy supply (SES) has positive relationship with sustainable energy development (SED)” 2.7. Sustainable Energy Development (SED) Lu et al. (2019) defined that “sustainable energy development 2.10. CSR and Sustainable Energy Development (SED) is one of the most important issues linked to global risks and Mỏrquez and Pộrez (2015) determined that CSR is an important uncertainties such as climate change, fuel poverty, hunger, and supportive tool in promoting environmental sustainability by instability” and its achievement contributes to “address affordable improving the perception of a company in terms of CSR practical and clean energy, industry, innovation and infrastructure, significance and improving the behavior of a company to adapt responsible consumption and production, smart cities and effectively to the socioeconomic context of the country and of communities, and climate actions.” In addition, Weder et al. (2019) the region to ensure environmental sustainability and sustainable state that energy transition is one of the key statements in most socioeconomic development. While Lu et al. (2019) implied that political strategies and related agendas of either national wide or corporate social responsibility helps to deal with major concerns regional wide not just those of the green parties. Transformation is in relation to environment, society and economy and drives for considered an evolving process over time and is characterized by sustainable energy development due to its positive impacts on structural and non-linear changes (Geels and Schot, 2010). It can climate, environment, communities, and economy as a whole. be defined as a long-term transition from one economic system to Measuring and managing the corporate social responsibility issues another and depends on a specific set of resources (Carley et al., that are linked to sustainable energy development can help to provide 2018). Sustainable energy development goals are set by EU’s both energy industries, energy-related industries and investors a clear for 2020, 2030 and 2050 as interlinked between the three major pathway to keep consumer costs low while shifting to new energy criteria include (1) enhancing energy efficiency; (2) increasing in saving technologies and a renewable energy portfolio. In addition, using renewable energy sources and (3) reducing emissions; and according to Lu et al. (2019), sustainable energy development is technological innovation (Vasile and Camelia, 2014). influenced by CSR related “energy efficiency improvements, usage of renewable energy sources, and GHG emission reduction.” 2.8. Usage of Renewable Energy Resources (URR) and Sustainable Energy Development (SED) Based on the above reviews, hypothesis of relationship between Sustainable development was defined as “the development that cooperate social responsibility (CSR) and sustainable energy meets the needs of the present without compromising the ability development (SED) created as follows: 176 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021
6. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy H6. “CSR has positive relationship with sustainable energy H2. “CSR has positive relationship with sustainable energy supply development (SED)” (SES)” H3. “The increasing in the use of renewable energy resources Table 1 summarizes the literature which show research context, (URR) has positive relationship with sustainable energy research methodology, findings and limitations. supply (SES)” H4. “The increasing in the use of renewable energy resources Table 2 presents the theories that majorly related to energy (URR) has positive relationship with sustainable energy efficiency and sustainable development in this research context. development (SED)” H5. “Sustainable energy supply (SES) has positive relationship 3. RESEARCH MODEL AND HYPOTHESIS with sustainable energy development (SED)” H6. “CSR has positive relationship with sustainable energy As shown in the Table 1, studies on CSR and sustainability development (SED)” related were taken from different perspectives, different context and different prospect expectations. However, it mainly focused 4. RESEARCH METHODOLOGY on CSR either implementation, practices or strategies and its impacts on either firm’s performance or sustainability but not The research methodology is used in this study as combination of a holistic model that accounts for CSR related for sustainable qualitative and quantitative methods to utilize the advantages of energy development by restructuring energy resource consumption the both research methods for the comprehensive assessment of to sustain energy supply as a holistic solution for sustainability the relationships of variables of the research model. Qualitative towards society, economy and environment. In addition, there is a research method enables us to approach in-depth and detailed lack of studies for energy sector as a whole while this is considered information about the views, visions and the relationship of as a leading force in the energy revolution towards a modern and CSR and sustainable energy supply (SES), increase in the use sustainable energy economy especially in emerging country like of renewable energy resources (URR) and sustainable energy Vietnam. The research model of this study is proposed as the development (SED). In addition, qualitative research with the Figure 1 based on the above literature reviews. This model used to explore the relationships between cooperate social responsibility form of in-depth expert interviews at face to face model that (CSR) and sustaining energy development (SED) with the increase enables authors to collect different attitudes and behaviors in the use of renewable energy resources (URR) and sustaining potentially lead to the same action or a decision. Authors prepared energy supply (SES) as meditating factors. Overall, this model interview questions at an open-ended mechanism to encourage consists of CSR as independent variable, URR and SES as interviewees to answer at the most comfortable, realistic and mediators and SED as dependent variable. unrestricted way within a certain framework. The selected respondent types for interview are energy experts, economists, The variables of this study were constructed that CSR has 8 items, energy services providers, entrepreneurs and firms’ executives. URR has 5 items, SES has 5 items and SED has 4 items. In overall, There were 36 respondents participated this interview, in which, this model has 1 independent variable, 2 mediating variable and 1 there were 10 energy experts, 10 economists, 6 founders of dependent variable and totally 22 items. Table 3 summarizes the entrepreneurs and 10 executives. The expected outcome of this constructs of this model. phase is the final questionnaire which is suitable with research context and ready for quantitative research performing. The In overall, hypotheses of this model are developed as follows: questionnaire was built using 7 Likert scale point which indicates H1. “CSR has positive relationship with the increase in the use of that the point range from 1 (strongly disagree) being ascending renewable energy resources (URR)” to 7 (strongly agree). Figure 1: Research model Usage of Renewable Energy H4 H1 Resources(URR) Corporate Social Sustainable Responsibility H6 H3 Energy (CSR) Development (SED) H2 Sustainable H5 Energy Supply (SES) 10 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021 177
7. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy Table 1: Summary of literature review Author Context Methodology Findings Limitations Lu et al. Energy utilities Analyze sustainable energy CSR plays an important role in Approach application (2019) in Baltic states: development indicators and approach implementing sustainable energy that related to Comparative comparative assessment development targets in the country subjectivity issue of review of CSR and that promote energy efficiency, drivers, influencers sustainable energy increase in use of renewable energy for sustainable energy development trends sources and reduce GHG emission development which may effect on the overall result of research Weder et al. CSR related Adopted a qualitative content analysis It’s found that most energy Data collection, (2019) in terms of using public information. Samples companies aware of the importance research context and practices and included 12 case studies from selected of CSR to achieving sustainability, research method. communication: countries which are Austria, Russia, however, it’s still struggled in terms “Antagonistic Germany, the USA, France and Korea of linking CSR strategy with their framing of core business sustainability by energy suppliers” Krishnamurti CSR and corruption Analyzed multinational firms for their CSR has a significant role in relation Subjects related to the et al. (2018) risk from a global CSR practices and internal factors, to sustainable development by research. perspective external factors that possibly impact on mitigating corruption risk corruption risk Lloyd (2018) CSR and firm’s Adapted regression analysis model by CSR significantly impact on the Research context performance in using the public information of 243 firm’s performance towards financial energy sector energy leading companies globally results (ROA, ROE, EBITDA) Saad and Renewable energy Applied a multivariate panel vector Economic growth and renewable Research context Taleb (2018) consumption and error correction model (VECM) based energy consumption has positive economic growth in on annual data which is available mutual relationship in the long run 12 EU countries available from 1990 to 2014 on 12 towards sustainable development European Union countries Emodi and Sustainable energy Analyzed the data of energy related in Sustainable energy development is Research method and Boo (2015) development in relation to energy consumption, energy a decisive factor that helps solve research context Nigeria from a generation capability, energy resource energy poverty, this is especially true perspective of availability, etc. in the context of Nigeria overcoming energy poverty Vasile and Sustainable energy Applied method multifactor regression There is a positive significant Research method and Camelia for sustainable analysis for a panel dataset relation between economic growth research context (2014) development with and consumption of renewable empirical approach energy towards sustainable for Romania development orientation Andronie CSR Applied a linear regression model to CSR implementation positively Research context and et al. (2019) implementation primary productions of renewable and significantly impact on data collection method. related and energy in the EU as well as in achieving sustainability towards its impact on Romania. Data collected from Eurostat society, environment and economy sustainability in EU (2019) for a period of 2005 to 2018 with taking benefits of all firms’ countries stakeholders into account and future generations Dupire and CSR and strategic Applied both univariate and CSR positively and significantly Data collection scale. M’Zali (2018) positioning multivariate analyses on firm’s reports associated with sustainability concerns of firms in both Compustat and KLD data from towards competition orientation 1995 to 2009 and whose industry-level fitted HHI is available in Hoberg and Phillips’s (2010, 2011) data, using ordinary least squares (OLS) estimation Mapelli et al. CSR initiatives Conducted case study methodology CSR initiatives has a positive Research context and (2016) and its role on long concerning three Italian energy and significant association with research method. term strategy for company sustainable development especially development in towards market expansion in energy sector in developed countries Italy. Source: Authors’ review 178 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021
8. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy Table 2: Theories majorly related to corporate social responsibility and sustainability for this study context Sources Theory Description Dunfee (2008) Stakeholder theory Managing corporate social responsibility in a multiple actor context which majorly explore the management challenges of CSR. It examines the role of the concept of stakeholders in helping managers to make discretionary allocation of spending for social responsibility Freeman et al. Stakeholder theory Considering the distinction between moral goodwill and business success to be false and in vain. Instead, (1984; 2010) effective stakeholder management is a necessary strategic practice for business success as it adds value to stakeholders including shareholders and ensures long-term survival and firms’ sustainability Nelson and Evolutionary This theory has great potential to study problems of energy saving and energy consumption Winter (1973) theory Aoki (1986) Information theory Provisions on special use of different information to reduce energy dependence and enhance energy of firms security of firms Michael Firm’s managerial Energy consumption and energy efficiency are areas of manager’s activity and are an integral part of and William theory planning and forecasting activities (1976) Bowen and Corporate social “CSR describes the responsibilities of a firm for economic gains, society and the environment” Johnson responsibility (1953) (CSR) Steurer et al. Sustainable Emphasizes the importance of meeting the needs of stakeholders of firms; and balance economic, (2005) development environmental and social aspects of business operations Source: Authors’ review Table 3: Constructs Constructs Items Description References CSR CSR1 The extent of reporting in the usage of renewables Sartori et al., 2017; Sidhoum and Serra, CSR2 The extent of reporting in the reduction of greenhouse gas emissions 2017; Talbot and Boiral, 2018; Bahari CSR3 The quality of reporting in the usage of renewables et al., 2016; Camargos et al., 2014; Kraft CSR4 The quality of reporting in the reduction of greenhouse gas emissions et al., 2018; Traxler and Greiling, 2019; CSR5 Results achieved in the usage of renewables Vasile and Camelia, 2014 CSR6 Results achieved in the reduction of greenhouse gas emissions CSR7 Actions planned in the increased usage of renewables CSR8 Actions planned in the continuing reduction of greenhouse gas emissions SED SED1 Reduction of greenhouse gas emission compared year based SED2 Share of renewable energy resources in the final energy consumption SED3 Increase of usage of renewable energy resources SED4 Increase energy efficiency, saving SES SES1 Access to consumption of sustainable energy SES2 Affordable price SES3 Manufacturing capability of sustainable energy SES4 Distributing capability of sustainable energy SES5 Ability to meet the increased demand of sustainable energy URR URR1 Increase of usage of wind resource URR2 Increase of usage of biomass resource URR3 Increase of usage of solar resource URR4 Increase of usage of geothermal resource URR5 Increase of usage of water resource Source: Author’s construct This study used 2 types of data categorized as primary and responses from the target respondents, unsatisfied responses given, secondary. In this research, the collected secondary data is related ect, so authors decided to initially proceed with 265 samples at the to CSR, energy consumption and renewable energy related globally simple method of collecting random probability samples. Survey as a whole and Vietnam specific, besides that, production-related subjects include experts (about 35%), firms’ executives (about capacity and potential-related data of renewable energy was also 35%), and management levels (about 30%), with no age limit for collected through various sources such as professional energy report respondents. The target areas that survey applied were cities and (REN21), online energy-related magazines of Vietnam Ministry provinces such as Ho Chi Minh City, Binh Thuan, Ninh Thuan, of Industry and Trade (MoIT). The primary data was collected by Khanh Hoa, Tay Ninh, Ca Mau as those are considered as typical survey using questionnaire with initial sample size is 265. Hair et al. and emerged in relation to industrialization and modernization in (2010) proposed the principal for sample size computation which the current context of Vietnam. The survey was implemented by is based on the number of items of the proposed research model. distributing questionnaires to the target respondents through email Accordingly, the sample size should be calculated 5–10 times more and direct delivery. The collected questionnaires were reviewed than the defined items in the study. This study has totally 22 items for the satisfied questionnaires. As a result, there was 247 met the thus a needed size of sample should be 220. However, to avoid specification as indicated criteria. Those data were then used for risk potential may occur during the survey process such as missing analysis using Smart-PLS. International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021 179
9. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy 5. RESULTS AND DISCUSSION Table 4: Cronbach’s alpha and composite reliability results Variables Cronbach’s alpha Composite reliability 5.1. Assessing Reliability of the Scale CSR 0.939 0.949 Reliability assessment is to check the consistency levels between SED 0.833 0.889 multiple measurements of a variable (Hair et al., 2010). This study SES 0.840 0.886 URR 0.857 0.897 assesses the consistency of the entire scale and its overall reliability of each factor of productivity values by simultaneously using Source: Authors’ analysis Cronbach’s Alpha and composite reliability indexes with expect to bring all necessary basis into consideration for the most appropriate Table 5: Results of outer loading conclusion to the study context. The analysis results show that Variables CSR SED SES URR Cronbach’s alpha coefficient of all variables are greater than 0.8 CSR1 0.815 from 0.833 of SED, 0.840 of SES, 0.857 of URR and 0.939 of CSR. CSR2 0.840 CSR3 0.890 Thus, it can be concluded that the measurement scale of this research CSR4 0.842 model is good. However, authors would like to continue further CSR5 0.805 investigation to strongly affirm the reliability of the scale, therefore CSR6 0.826 composite reliability value was used for this purpose. The analysis CSR7 0.847 result show that all composite reliability values are greater than 0.8 CSR8 0.830 SED1 0.780 from 0.886 of SES, 0.889 of SED, 0.897 of URR and 0.949 of CSR. SED2 0.859 According to Hair et al. (2016), the aggregate reliability between 0.7 SED3 0.841 and 0.95 represents a satisfactory level of reliability. Therefore, in SED4 0.782 overall, these results confirm that the reliability of this scale is good SES1 0.732 and acceptable. Table 4 is summary of these results. In addition, the SES2 0.750 SES3 0.760 indicator reliability was checked by assessing outer loading’ results. SES4 0.813 SES5 0.844 Table 5 shows the results of outer loading where all values are URR1 0.764 greater than 0.7. It means that all individual indicators are reliable. URR2 0.768 URR3 0.820 5.2. Assessing Validity URR4 0.832 URR5 0.800 Hair et al. (2010) defined that the purpose of assessing validity is to determine how well is the construct explained the variables Source: Authors’ analysis under the construct. In addition, it’s to assess practicality of the data collected and its reflection on the study context. According Table 6: Convergent validity to Anderson and Gerbing (1988), the validity of research concepts Variables External loading factors AVE includes convergent validity and discriminant validity of scales. CSR 0.805–0.890 0.701 SED 0.781–0.859 0.667 SES 0.732–0.844 0.610 5.3. Convergent Validity URR 0.764–0.832 0.636 According to Fornell and Larcker (1981), the convergence value Source: Authors’ analysis is used to illustrate the full convergence of the measurement items on their respective structures. Gửtz et al. (2010) determined that remaining structures. Table 5 has confirmed that the square root the evaluation of convergence is typically calculated by means of AVE values are all greater than the inter-construct correlation of average variance extracted (AVE) and external loading factor so the discriminatory test of research concepts is satisfied. The (outer loading). While Hair et al. (2010) suggested that the AVE index should be over or equal to 50%, the extracted factors could research can move on to analysis of the next steps. Distinctive be more explainable than any other extract combinations. Table 6 assessment is a method of independently evaluating the scales of shows the results of EVA and external loading factors. In which different concepts to prove that these concepts are not correlated external loading factors values are all greater than 0.7 and EVA with each other. The following Table 7 shows the values in the are all greater than 0.5. These values exceed the level mentioned, discriminant analysis table, in which the diagonal value in bold is it indicates a sufficient degree of convergent validity, which the square root value of the factors. The values shown on the lower means that a specific latent variable explains more than half of left of the diagonal value in bold are the partial correlation values. the variance in comparison to their corresponding indicators (Hair This result shows that the square root value of the average of the et al., 2011). Accordingly, we can conclude that the observed factors is greater than the partial correlation value. Therefore, it variables are focused on the research concept that it is involved can be concluded that the distinctiveness of the research concepts in or convergent validity is supported. is determined satisfactorily. 5.4. Discriminant Validity 5.5. Evaluation of Structural Model According to Fornell and Larcker (1981), the distinction is satisfied According to Falk and Miller’s (1992), the model is called good when the square root of AVE of each structure in the research when the R2 index is satisfactory, meaning that the R2 index are model is greater than all the internal correlation values of the both greater than 0.1. The Table 8 shows the results that both 180 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021
10. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy R2 values and R2 adjusted values are greater than 0.1. In which, Table 7: Fornell and Larcker criteria R2 value of sustainable energy development (SED) is 0.353; R2 Variables CSR SED SES URR value of sustainable energy supply (SES) is 0.388, and that of the CSR 0.837 increase in the use of renewable energy resources (URR) is 0.139. SED 0.415 0.817 Therefore, the structural model is considered satisfactory. SES 0.454 0.523 0.781 URR 0.373 0.485 0.565 0.798 In addition, Table 9 shows path coefficients of variables of the Source: Authors’ analysis research model. It indicates that out of the associations of CSR with other variables, CSR on URR has the strongest positive impact at Table 8: R square values 0.373 as path coefficient between those variables while that between Variables R2 R2 adjusted CSR and SES is lower at 0.283 and its lowest at 0.187 between SED 0.353 0.345 CSR and SED. Regarding associations of the remaining variables, SES 0.388 0.383 results shows that URR has the most strongest positive impacts on URR 0.139 0.136 SES at 0.459 as coefficients, the next one is SES on SED at 0.299 Source: Authors’ analysis and the last one is URR on SED at 0.246. It implies that for cases of energy companies in Vietnam context, utilize renewable energy Table 9: Path coefficience resources is the most important for achieving energy efficiency and Variables SED SES URR sustainable energy development. In addition, CSR implementation CSR 0.187 0.283 0.373 has an important role as an independent factor to promote utilization SES 0.299 of renewable energy resources and energy efficiency. As a cause- URR 0.246 0.459 effect relationship, energy companies in Vietnam should consider Source: Authors’ analysis CSR as strategic activity that generates values towards firms’ stakeholders, society, community and government, meanwhile it Table 10: Variance inflation factors values motivates utilizing renewable for energy efficiency and sustainable Variables VIF Variables VIF Variables VIF development to stay proactive and competitive. Figure 2 below is values values values the analysis result of the research model of this study. CSR1 2.491 SED1 1.612 SES5 2.117 CSR2 3.133 SED2 2.006 URR1 1.611 The next step was taken in this procedure was checking CSR3 3.607 SED3 2.027 URR2 1.655 multicollinearity for each of the predictor latent variable by CSR4 3.002 SED4 1.674 URR3 2.095 assessing VIF (variance inflation factors). Collinearity is a CSR5 2.611 SES1 1.576 URR4 2.168 condition in which some of the independent variables are highly CSR6 3.187 SES2 1.633 URR5 1.936 CSR7 3.079 SES3 1.620 correlated. There is much divergence exists in the literature in CSR8 2.681 SES4 2.010 relation to the VIF value to be used as the threshold for collinearity Source: Authors’ analysis (Cenfetelli et al., 2009; Kline, 1998; Petter et al., 2007). It is commonly recommended values are 10, 5, and 3.3; meaning that a VIF equal to or greater than the threshold value would suggest The results of this study confirmed the hypothesis 1 (H1) that the existence of collinearity among the variables or called in CSR has positive relationship with the increase in the usage of other word multicollinearity. Hair et al. (2009) defined that a renewable energy resource. It implies that when a firm in energy common threshold is a VIF value above 10. In this study, VIF industry aware of their social responsibility and the practical values presented below 10 so it can be concluded that there is no benefits of CSR to its stakeholders (primary and secondary), multicollinearity problem among variables of the research model. environment and national economy in some ways, they actively Table 10 summarizes VIF values of this model. have CSR strategy as part of their core business activities by restructuring energy resource composition towards green energy Further, the significance of path coefficient analysis was conducted supply. This finding coincide with that of Lu et al. (2019); Mezher using Bootstrap method using 1000 emulators. Bootstrapping and Tabbara (2010). assigns measures of accuracy (bias, variance, confidence intervals, prediction error, etc.) to sample estimates” (Efron and Next, the hypothesis 2 (H2) is accepted in this study that confirmed Tibshirani, 1993; Efron, 2003). “This technique allows estimation the positive and significant relationship of CSR and sustainable of the sampling distribution of almost any statistic using random energy supply. It implies that when an energy firm well performs sampling methods” (Varian, 2005). The bootstrapping result shows CSR strategy, it enables sustaining energy supply toward security that the statistical value t > 1.96 and P-value < 5% which confirm point of view. This finding supports the study results of Lloyd hypotheses of this research model. On the other hand, this result (2018); Vaona (2016); Mezher and Tabbara (2010). determines the suitability of the research model with research data while the acceptance of hypotheses determines the practical In addition, the hypothesis 3 (H3) of this study is confirmed that meaning for sustainable energy development. In conclusion, the the increase in the usage of renewable energy resources has a positive impacts of CSR on SED, CSR on URR, CSR on SES, positive relationship with sustainable energy supply. It’s reported SES on SED and URR on SED are confirmed in this study. The that actions to increase in the usage of renewable energy resources below Figure 3 and Table 11 presented results of bootstrapping. by energy firms will enhance ability of sustaining energy supply. International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021 181
11. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy Figure 2: Result analysis of research model Source: Authors’ analysis Figure 3: Bootstrapping’s results Source: Authors’ analysis 182 International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021
12. Tiep, et al.: Role of Corporate Social Responsibility in Sustainable Energy Development in Emerging Economy Table 11: Bootstrapping’s results Path of variables Original sample (O) Sample mean (M) Standard deviation (STDEV) T Statistics (|O/STDEV|) P-values CSR→SED 0.187 0.192 0.087 2.144 0.032 CSR→SES 0.283 0.282 0.084 3.383 0.001 CSR→URR 0.373 0.379 0.073 5.125 0.000 SES→SED 0.299 0.304 0.106 2.824 0.005 URR→SED 0.246 0.244 0.103 2.382 0.017 URR→SES 0.459 0.463 0.078 5.853 0.000 Source: Authors’ analysis This is an extreme important matter of any nation in relation Vietnam. The results of this study can support the findings of the to development. This result gets aligned with the findings and previous studies on the perception of CSR and sustainability or arguments of Smith et al. (2010); Grin et al. (2010); (International sustainable development such as Lu et al. (2019); Krishnamurti Energy Agency, 2008); Philo and Happer (2013); Geels and Schot et al. (2018); Andronie et al. (2019); Dupire and M’Zali (2018). (2010). 6. CONCLUSION Continuously, this study results confirmed the hypothesis 4 (H4) which determined the positive association of action to increase This study has remarkable contributions to the literature. The in the use of renewable energy resources and sustainable energy first one is addressing a comprehensive concept of CSR in the development. It implies that as energy companies switch to energy sector in an emerging economy like Vietnam. The second renewable energy for their operation and their business as energy contribution is in relation to prospects of sustainable energy supply, this will contribute to sustainable energy development, development on the supply and demand point of views. By that, towards the elimination of dependence on traditional energy it shows potentials of renewable energy resources and increased for sustainable economic development as a ultimate goal of any demand of energy as a whole by period in Vietnam. The third country, region and the world. This result supports the findings and contribution is important at most which is associated relationship arguments of Saad and Taleb (2018); Vasile and Camelia (2014). between CSR and sustainable energy development (SED); utilization of renewable energy resource (URR) and sustainable Next, the findings of this research accepted the hypothesis 5 (H5) that sustainable energy supply has positive relationship energy supply (SES) with the meditating roles of URR and SES with sustainable energy development. It confirmed that as between CSR and SED. energy supply capacity of energy firms is sustainable, it will stabilize development of energy. This finding aligned with the Our results corroborate with findings of Lu et al. (2019) which determinations and arguments of Emodi and Boo (2015); Saad indicates that CSR has the strongest positive impact on URR while and Taleb (2018). URR has significant impact on SES. These associations are also strongly supported by the literature (Weder et al., 2019; Geels and Lastly, this research result confirmed the hypothesis 6 (H6) Schot, 2010; Carley et al., 2018) that social responsibility helps that CSR has positive relationship with sustainable energy achieve sustainable energy development goals. It implies that if development. It determined that as energy firms have proper CSR an organization those operating in energy sector that succeeds strategy which is well integrated into the core business of firms in CSR implementation, its outcomes can promote utilizing on the base of taking benefits of firm’s stakeholders into account renewable energy resources, as a cause-effect relationship, that will and balancing social, environmental and economic aspects, and as ensure sustainable energy supply that lead to achieve sustainable CSR strategy is well performed by firms, sustainable development energy development goals. In addition, results confirmed all can be achieved. This finding supports the result of Mỏrquez and the hypotheses of the models, it implies that any success in Pộrez (2015); Lu et al. (2019); Andronie et al. (2019). implementing CSR activities, success will be progressive towards renewable resources utilization, sustainable energy efficiency and In overall, the current literature exists researches on CSR related sustainable energy development. The deliverable of this research topic on the energy sector. It is presented quite popular. However, addressed the research questions and covered beyond the findings research on the associations of CSR and sustainable energy of Rimsaite (2019); Krishnamurti et al. (2018) that indicated “the development (SED) with meditating roles of renewable energy importance of CSR for dealing with the major risks and challenges resources and sustainable energy supply is very few. Furthermore, that the energy sector is facing like corruption risks” or CSR is it’s rare for emerging economy, for instance, Vietnam. The overall important divers of “competition” as of Dupire and M’Zali (2018); findings of this research found that CSR has a positive relationship Runhaar and Lafferty (2009); Mapelli et al. (2016); “reputation” with SED and significantly impacts on utilizing renewable as of Lu et al. (2019) and Lloyd-Smith and An (2019); “customers energy resources (URR) and sustainable energy supply (SES). loyalty” as of Lu et al. (2019); Przepoirka and Horne (2019) and Additionally, URR and SES significantly play meditating role “policies” as of Lu et al. (2019). among this associated relationship. The originality of this study is a holistic finding of the relationship of CSR, URR, SES and Besides the above findings, this research has an important remark SED which is very few and aimed to be a significant contribution that energy companies in Vietnam are more and more increasing to the existing literature, moreover, for emerging economy like their awareness of its responsibility for society and environment, International Journal of Energy Economics and Policy | Vol 11 • Issue 2 • 2021 183
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