The role of environmental risk management in company profitability within sustainable development goals

Abstract

This research aims to investigate the impact of enterprise resource planning (ERP) management systems on the environmental and financial performance of Ukrainian companies. To attain the paper's goal, this study is carried out in the following logical sequence: 1) Analysing the multifaceted role of ERP systems in modern business frameworks, including their capacity to manage stakeholder conflicts and mitigate environmental risks. 2) Empirically testing the hypothesis through a sophisticated partial least squares structural equation modelling (PLS-SEM) model, highlighting the mediating role of stakeholder influence on environmentally oriented activities. The application of structural modelling tools and PLS-SEM techniques has revealed a statistically significant positive correlation between ERP management system efficiency and company profitability (impact strength = 0.497). Since all indicators of'stakeholder influence intensity on environmentally oriented company activities' have a statistically significant influence at the 1% level, the establishment of goals for environmentally oriented company development and the corresponding ERP management system should consider the interests of all company stakeholders. The research results can be helpful for policymakers and businesses seeking to promote ERP adoption for environmental sustainability, enhance transparency, and achieve a synergistic effect between environmental objectives and profitability.