The Impact of Corporate Sustainability on Organizational Processes and Performance

2014/11/01 by Robert G. Eccles, Ioannis Ioannou, George Serafeim · 3,706 citations
Business, Management and Accounting · Engineering · #Accounting #Business #Corporate Social Responsibility Reporting #Corporate sustainability #Economics #Environmental Sustainability in Business #Incentive #Industrial organization #Management #Microeconomics #Sample (material) #Social sustainability #Stakeholder #Sustainability #Sustainability organizations #Sustainability reporting #Sustainable Building Design and Assessment

paper · open access · doi:10.1287/mnsc.2014.1984

published in Management Science 60(11), 2835-2857 (Institute for Operations Research and the Management Sciences)

openalex publication_date 2014/11/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/06

Abstract

We investigate the effect of corporate sustainability on organizational processes and performance. Using a matched sample of 180 U.S. companies, we find that corporations that voluntarily adopted sustainability policies by 1993—termed as high sustainability companies—exhibit by 2009 distinct organizational processes compared to a matched sample of companies that adopted almost none of these policies—termed as low sustainability companies. The boards of directors of high sustainability companies are more likely to be formally responsible for sustainability, and top executive compensation incentives are more likely to be a function of sustainability metrics. High sustainability companies are more likely to have established processes for stakeholder engagement, to be more long-term oriented, and to exhibit higher measurement and disclosure of nonfinancial information. Finally, high sustainability companies significantly outperform their counterparts over the long term, both in terms of stock market and accounting performance. This paper was accepted by Bruno Cassiman, business strategy.

Citations

• Misery Loves Companies: Rethinking Social Initiatives by Business
• Why Do Corporations Give to Charity?
• Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms
• The Company and the Product: Corporate Associations and Consumer Product Responses

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