The last decade has witnessed the emergence of a paradox perspective on corporate sustainability. By explicitly acknowledging tensions between different desirable, yet interdependent and conflicting ...sustainability objectives, a paradox perspective enables decision makers to achieve competing sustainability objectives simultaneously and creates leeway for superior business contributions to sustainable development. In stark contrast to the business case logic, a paradox perspective does not establish emphasize business considerations over concerns for environmental protection and social well-being at the societal level. In order to contribute to the consolidation of this emergent field of research, we offer a definition of the paradox perspective on corporate sustainability and a framework to delineate its descriptive, instrumental, and normative aspects. This framework clarifies the paradox perspective's contents and its implications for research and practice. We use the framework to map the contributions to this thematic symposium on paradoxes in sustainability and to propose questions for future research.
This paper proposes a systematic framework for the analysis of tensions in corporate sustainability. The framework is based on the emerging integrative view on corporate sustainability, which ...stresses the need for a simultaneous integration of economic, environmental and social dimensions without, a priori, emphasising one over any other. The integrative view presupposes that firms need to accept tensions in corporate sustainability and pursue different sustainability aspects simultaneously even if they seem to contradict each other. The framework proposed in this paper goes beyond the traditional triad of economic, environmental and social dimensions and argues that tensions in corporate sustainability occur between different levels, in change processes and within a temporal and spatial context. The framework provides vital groundwork for managing tensions in corporate sustainability based on paradox strategies. The paper then applies the framework to identify and characterise four selected tensions and illustrates how key approaches from the literature on strategic contradictions, tensions and paradoxes—i.e., acceptance and resolution strategies—can be used to manage these tensions. Thereby, it refines the emerging literature on the integrative view for the management of tensions in corporate sustainability. The framework also provides managers with a better understanding of tensions in corporate sustainability and enables them to embrace these tensions in their decision making.
We argue that the majority of the current approaches in research on corporate sustainability are inconsistent with the notion of sustainable development. By defining the notion of instrumentality in ...the context of corporate sustainability through three conceptual principles we show that current approaches are rooted in a bounded notion of instrumentality which establishes a systematic a priori predominance of economic organizational outcomes over environmental and social aspects. We propose an inclusive notion of profitability that reflects the return on all forms of environmental, social, and economic capital used by a firm. This inclusive notion of corporate profitability helps to redefine corporate profitability as if sustainability matters in that it overcomes the bounded instrumentality that impairs current research on corporate sustainability. We apply this notion to different car manufacturers and develop conceptual implications for future research on corporate sustainability.
This paper provides a new indicator for environmental assessment performance linked to Circular Economy. Almost all existing techniques evaluate resource use based on their burden relative to value, ...while the central point of Circular Economy is to create value through material retention. The existing burden-orientated techniques are therefore unsuitable for guiding managers in relation to Circular Economy objectives. This paper presents a new performance metric, the longevity indicator, which measures contribution to material retention based on the amount of time a resource is kept in use. The measure is composed of three generic components: initial lifetime, earned refurbished lifetime and earned recycled lifetime. Management of these components can be used for decision making and performance assessment in the Circular Economy. The example of precious metals in mobile phone handsets is used to illustrate the general application and suitability of this indicator. Findings show that for materials to be retained, managers should encourage longer lifetime use, increase product return levels for initial use and refurbished phones, and select the most effective recycling processes available. This paper advances performance indicators for Circular Economy, and provides a tool which can be applied at managerial and organizational levels to measure the impact of business decisions on the longevity of precious materials.
•Existing indicators and assessments are unable to capture Circular Economy performance.•An indicator of resource longevity use in terms of the Circular Economy is developed.•Initial use, earned refurbished and recycled lifetime are identified as components of longevity.•The indicator is applied to the mobile phone product system.
The literature on corporate social performance advocates that firms address social issues based on instrumental as well as moral rationales. While both rationales trigger initiatives to increase ...corporate social performance, these rest on fundamentally different and contradicting foundations. Building on the literature on organizational ambidexterity and paradox in management, we propose in this conceptual article that ambidexterity represents an important determinant of corporate social performance. We explain how firms achieve higher levels of corporate social performance through the ambidextrous ability to simultaneously pursue instrumentally and morally driven social initiatives. We distinguish between a balance dimension and a combined dimension of ambidexterity, which both enhance corporate social performance through distinct mechanisms. With the balance dimension, instrumental and moral initiatives compensate for each other – which increases the scope of corporate social performance. With the combined dimension, instrumental and moral initiatives supplement each other – which increases the scale of corporate social performance. The article identifies the most important determinants and moderators of the balance and the combined dimension to explain the conditions under which we expect firms to increase corporate social performance through ambidexterity. By focusing on the interplay and tensions between different types of social initiatives, an ambidextrous perspective contributes to a better understanding of corporate social performance. Regarding managerial practice, we highlight the role of structural and behavioral factors for achieving higher corporate social performance through the simultaneous pursuit of instrumental and moral initiatives.
Natural resources are limited. The circular economy is one of several different concepts that has been useful in the quest to understand how resources can be used most efficiently. It proposes that ...closing loops and repeatedly using resources has the potential to procure maximum eco-efficiency. To track society's progress towards a circular economy, indicators and measures are needed. The majority of these aim to capture the circularity of resource flows, yet fail to simultaneously consider the length of time for which a resource is in use. More recently, a longevity indicator has been proposed, but similarly, it fails to take into account how many times a resource is used. Both longevity and circularity are needed for sustainable resource use, but to date, no measure that combines both approaches is in use. Based on existing measures we develop and further develop indicators for both circularity and longevity that focus on the contribution that organisations and other resource users make to the sustainability of resource use. By combining both indicators we enhance their explanatory power.
This paper proposes a new approach to measure corporate contributions to sustainability called Sustainable Value Added. Value is created whenever benefits exceed costs. Current approaches to measure ...corporate sustainable performance take into account external costs caused by environmental and social damage or focus on the ratio between value creation and resource consumption. As this paper will show it is more promising to develop sustainable measures based on opportunity costs. Sustainable Value Added is such a measure. It shows how much more value is created because a company is more efficient than a benchmark and because the resources are allocated to the company and not to benchmark companies. The concept of strong sustainability requires that each form of capital is kept constant. As Sustainable Value Added is inspired by strong sustainability, it measures whether a company creates extra value while ensuring that every environmental and social impact is in total constant. Therefore, it takes into account both, corporate eco- and social efficiency as well as the absolute level of environmental and social resource consumption (eco- and social effectiveness). As a result, Sustainable Value Added considers simultaneously economic, environmental and social aspects. The overall result can be expressed in any of the three dimensions of sustainability.
Purpose
– The purpose of this paper is to seek to shed light on the practice of incomplete corporate disclosure of quantitative Greenhouse gas (GHG) emissions and investigates whether external ...stakeholder pressure influences the existence, and separately, the completeness of voluntary GHG emissions disclosures by 431 European companies.
Design/methodology/approach
– A classification of reporting completeness is developed with respect to the scope, type and reporting boundary of GHG emissions based on the guidelines of the GHG Protocol, Global Reporting Initiative and the Carbon Disclosure Project. Logistic regression analysis is applied to examine whether proxies for exposure to climate change concerns from different stakeholder groups influence the existence and/or completeness of quantitative GHG emissions disclosure.
Findings
– From 2005 to 2009, on average only 15 percent of companies that disclose GHG emissions report them in a manner that the authors consider complete. Results of regression analyses suggest that external stakeholder pressure is a determinant of the existence but not the completeness of emissions disclosure. Findings are consistent with stakeholder theory arguments that companies respond to external stakeholder pressure to report GHG emissions, but also with legitimacy theory claims that firms can use carbon disclosure, in this case the incomplete reporting of emissions, as a symbolic act to address legitimacy exposures.
Practical implications
– Bringing corporate GHG emissions disclosure in line with recommended guidelines will require either more direct stakeholder pressure or, perhaps, a mandated disclosure regime. In the meantime, users of the data will need to carefully consider the relevance of the reported data and develop the necessary competencies to detect and control for its incompleteness. A more troubling concern is that stakeholders may instead grow to accept less than complete disclosure.
Originality/value
– The paper represents the first large-scale empirical study into the completeness of companies’ disclosure of quantitative GHG emissions and is the first to analyze these disclosures in the context of stakeholder pressure and its relation to legitimation.
Genes, species and ecosystems are often considered to be assets. The need to ensure a sufficient diversity of this asset is being increasingly recognised today. Asset managers in banks and insurance ...companies face a similar challenge. They are asked to manage the assets of their investors by constructing efficient portfolios. They deliberately make use of a phenomenon observed in the formation of portfolios: returns are additive, while risks diversify. This phenomenon and its implications are at the heart of portfolio theory. Portfolio theory, like few other economic theories, has dramatically transformed the practical work of banks and insurance companies. Before portfolio theory was developed about 50 years ago, asset managers were confronted with a situation similar to the situation the research on biodiversity faces today. While the need for diversification was generally accepted, a concept that linked risk and return on a portfolio level and showed the value of diversification was missing. Portfolio theory has closed this gap. This article first explains the fundamentals of portfolio theory and transfers it to biodiversity. A large part of this article is then dedicated to some of the implications portfolio theory has for the valuation and management of biodiversity. The last section introduces three development openings for further research.PUBLICATION ABSTRACT
•We disaggregate corporate eco-efficiency.•We identify the components and drivers of an efficient use of environmental resources.•We analyze in detail the capital and CO2-efficiency of major global ...car makers.•We clarify the relation between the efficient use of capital and environmental resources in firms.•We provide managers with a tool to manage eco-efficiency as an end in itself.
Eco-efficiency is oftentimes considered the gold standard for managerial decision making in an environmental context because it seemingly reconciles the efficient use of capital and the efficient use of environmental resources. We challenge this view by disaggregating eco-efficiency to provide an in-depth analysis of corporate eco-efficiency and to identify the drivers of an efficient use of environmental resources. By building on the value-based approach in financial management, we extend the rationale of economic value drivers to develop drivers for the efficient use of environmental resources. We apply this logic to analyze the carbon-efficiency of major car manufacturers worldwide. The analysis clarifies the conceptual relationship between the use of economic and environmental resources by firms. The analysis shows that the drivers of capital efficiency and eco-efficiency are not fully congruent. These findings underpin critical voices that question the supposedly unproblematic link between corporate eco-efficiency and economic value creation. We illustrate that the efficient use of environmental resources is complementary rather than instrumental to capital efficiency. Consequently, the challenge of managing eco-efficiency is to unshackle it from the current capital-oriented domination. The findings provide managerial guidance on the value-creating use of environmental and economic resources. Conceptually, our argument contributes to the debate between critical and managerial perspectives on environmental accounting and helps to address the current standoff between these two camps.
PDF
