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SummaryWe have investigated the strategic importance of sustainability topics suchas environmental, social and governance (ESG) issues for corporations. Themain conclusions of the reviewed research are:• Sustainability topics can have a material effect on a company’s risk profile,performance potential and reputation and hence have a financial impacton a firm’s performance.• Product and process innovation is critical to benefit financially fromsustainability issues.• Different industries have different sustainability issues that are materialfor financial performance.• Medium to longer-term competitive advantages can be achieved througha broader orientation towards stakeholders (communities, suppliers,customers and employees) and shareholders.• The management of sustainability issues needs to be deeply embeddedinto an organization’s culture and values. Particular mechanismsmentioned by researchers include:--responsibility at the board level (ideally the CEO),--clear sustainability goals that are measurable in quantity and time,--an incentive structure for employees to innovate and--external auditors which review progress.• Table 3 presents the most important academic papers on the businesscase of sustainability.16
Table 3: Overview of studies on the business case for sustainability(subjective selection)Author(s) Year Journal TitleDavis 1973Academy of ManagementJournalThe Case for and Against Business Assumption of SocialResponsibilities.Eccles and Serafeim 2013 Harvard Business Review The Performance Frontier.Hart 1995Academy of ManagementReviewA Natural-Resource-Based View of the Firm.Porter and Kramer 2002 Harvard Business Review The Competitive Advantage of Corporate Philanthropy.Porter and Kramer 2006 Harvard Business ReviewStrategy and Society: The Link BetweenCompetitive Advantage and Corporate Social Responsibility.Porter and van der Linde 1995The Journal of EconomicPerspectivesToward a New Conception of the Environment-Competitiveness Relationship.Porter and van der Linde 1995 Harvard Business Review Green and Competitive.17
Page 1 and 2: How Sustainability Can Drive Financ
Page 3 and 4: “The report shows that shareholde
Page 5 and 6: Contents1. Introduction 82. A Busin
Page 7 and 8: eport HighlightsSustainability is o
Page 9 and 10: 2. A Business Casefor CorporateSust
Page 11 and 12: The materiality of environmental, s
Page 13 and 14: Neglecting sustainability issues ca
Page 15: Case Study: British PetroleumBP’s
Page 20 and 21: Studies also show that credit ratin
Page 23 and 24: Table 4: Empirical studies investig
Page 25 and 26: 4. Sustainabilityand OperationalPer
Page 27 and 28: firms with staggered or classified
Page 29 and 30: SummaryIn this section, we have ana
Page 31 and 32: Table 6: continuedStudy authorsTime
Page 33 and 34: 5. Sustainability andStock PricesTh
Page 35 and 36: are less ‘eco-efficient’, 149 a
Page 37 and 38: profile are acquired, the market re
Page 39 and 40: Table 7: Empirical studies investig
Page 41 and 42: more sustainable firms remain on th
Page 43 and 44: To date, active ownership has achie
Page 45 and 46: This clear economic case for sustai
Page 47 and 48: Bauer, R., Derwall, J., & Hann, D.
Page 49 and 50: Coca-Cola Company. (2013). Setting
Page 51 and 52: European Commission. (2013b). Commi
Page 53 and 54: Hart, S. L., & Ahuja, G. (1996). Do
Page 55 and 56: Margolis, J. D., & Walsh, J. P. (20
Page 57 and 58: Servaes, H., & Tamayo, A. (2013). T

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