Commitment or rent-seeking? Government incentive policies for ESG reporting in sustainable e-commerce logistics

Abstract

In the sphere of e-commerce logistics industry, the credibility of Environment, Social, and Governance (ESG) reports by e-commerce logistics service providers (ELSPs) is critical for accurately conveying sustainability initiatives with transparency. Nonetheless, the actions of ESG rating stakeholders can significantly affect the truthfulness and authenticity of these ESG reports. Therefore, it becomes essential to develop comprehensive analytical methods and incentives policies to forestall any rent-seeking behavior that might emerge from potential collusion between ELSPs and ESG rating agencies (ERAs). This study presents a tripartite evolutionary game model to inspect the enduring strategic interplay among ELSPs, ERAs, and government regulators. The model illuminates the collective supervision outcomes molded by these stakeholder interactions. Choices available include ELSPs' decision to offer ESG-committed or basic services, ERAs' consideration to accept or decline rent-seeking requests from ELSPs, and regulators' options for either stringent or lenient supervision. The analysis also explores the influence of government incentives, such as rewards or penalties, in promoting ELSPs' provision of ESG-committed transportation services. Evolutionary stable strategies and conditions are then derived to capture the feature of incentive policies. The findings show that high ESG commitment transportation costs often deter ELSPs due to unpredictable future revenues, leading them to prefer a conservative strategy of providing basic services. Government regulations and incentives, however, can encourage in ESG transport, especially when ERAs’ rent-seeking charges are high. Despite the potential for relaxed supervision as ESG transport services become more widespread, strict government regulation remains crucial in motivating ELSPs to enhance their ESG commitment and adopt ESG transportation services.