Assessing the effectiveness of interdependent corporate sustainability choices
File(s)
Published version
Author(s)
Cenci, Simone
Burato, Matteo
Rei, Marek
Zollo, Maurizio
Type
Journal Article
Abstract
Lowering the environmental externalities of business operations while preserving firms’ value is a challenging task that involves complex sustainability decisions. These decisions require navigating highly interconnected choices of actions and goals that characterise companies’ sustainability behaviour. Here, we develop an empirical framework to investigate the implications of choice interdependence on companies’ integrated financial and environmental performance. Our results suggest that the sustainability choices of companies in energy and energy-intensive sectors emerge from effective decision-making processes and have a larger impact on performance than random allocation of actions. However, comparing the behaviour of companies in our sample with hypothetical quasioptimal (“satisficing”) choices, we observe a considerable under-performance, a low choice differentiation across the population, a significant over-investment in risk mitigation activities, and under-investment in developing innovation capabilities. Overall, our study provides a framework for evaluating companies’ contribution to a sustainable low-carbon transition and highlights critical gaps in corporates’ environmental actions.
Date Issued
2025-03-06
Date Acceptance
2024-12-24
Citation
npj Climate Action, 2025, 4 (1)
ISSN
2731-9814
Publisher
Springer Science and Business Media LLC
Journal / Book Title
npj Climate Action
Volume
4
Issue
1
Copyright Statement
© The Author(s) 2025. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
License URL
Publication Status
Published
Article Number
ARTN 25
Date Publish Online
2025-03-06