Corporate Sustainability Strategy
Corporate sustainability is a strategic management paradigm under which firms fully integrate sustainable development, i.e., environmental protection, social justice and equity, and economic development, into their business activities. Developing this paradigm and anchoring it in the practice of business and financial management is central for a development trajectory that sustains humankind over the coming decades and centuries.
SusTec’s research focuses on the strategic value of corporate sustainability, as well as cognitive barriers that hinder the investments into corporate sustainability. By drawing on the concept of corporate sustainability, we emphasize the interaction between firm level action and systemic processes. We also teach ETH’s flagship lecture on corporate sustainability and offer four seminars relevant for corporate sustainability.
Key findings:
- Firms who acknowledge the long-term implications and interconnectedness of environmental problems for society tend to be more innovative, even if they interpret environmental challenges as threats rather than opportunities (DownloadHaney, A.B. 2015)
- External change agents, such as consultants, positively affects corporate sustainability investments, specifically if these agents are involved in the implementation of measures and broadly scan the firm for investment opportunities (DownloadHoppmann, Sahkel & Richert, 2018)
- The media plays a major role: Non-sustainable activities increase a firm’s credit risk, when stakeholder criticism of these activities is spread by the media (DownloadKölbel, Busch & Jansco 2017)
- Firms are most exposed to stakeholder criticism if they perform poorly, but in particular when they cause controversies on a wide variety of sustainability issues (DownloadKölbel, 2015)
- The payoffs to a corporate sustainability strategy are contingent on a long-term perspective and are enhanced when the firm is innovative at the same time (DownloadBusch, Stinchfield, Wood, 2011)
- Wealthy private investors appear interested in sustainability, yet hesitant investment advisors are a barrier to sustainable investments (DownloadPaetzold & Busch, 2014)
- Financial markets might be skewed away from sustainability aspects, as advisors appear to be less receptive than their clients to aspects like expected risk and personal values (DownloadPaetzold, Busch, Chesney, 2015)
- Investment advisors in mainstream banks argue that it takes too much time to discuss sustainability with clients, whereas sustainability-focused advisors argue that sustainability is key to serve clients well (DownloadPaetzold & Marti, 2015)
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