Applause, applause: Regarding the goals of sustainability management social acceptance
is more important than profit for large companies. © fotolia_62372428_yanlev
(February 25, 2016) It is commonly believed that companies are only committed to environmental and social issues if this contributes to increase their profits. A new study now shows that this stereotype is not true at least for large companies in developed countries. The driving force behind sustainability management activities of large companies is mainly the pursuit of social acceptance. Conversely, profit maximisation plays a subordinate role. This counterintuitive result of a broad empirical study has recently been published in the Journal of Business Ethics by Prof. Dr. Stefan Schaltegger (Leuphana University of Lüneburg) and Prof. Dr. Jacob Hörisch (Alanus University) (DOI: 10.1007 / 210551-015-2854-3).
The study is based on a survey of 432 of the largest companies in ten industrial countries in Europe, North America and Asia. Sustainability managers were asked about the aims, actors, methods and effects of the company’s sustainability management activities. The survey results are clear: A legitimacy-oriented perspective is prevalent not only in the aims, but also in the organisational implementation and the application of sustainability management measures. By contrast, objectives and practices following a more profit-driven logic of action were regarded as less important by the majority of respondents.
Already for developing sustainability management goals, the pursuit of social recognition plays a greater role than the profit motive. This may be because the impact from legitimacy-oriented players such as media or NGOs on corporate sustainability activities is perceived to be much higher, than that of financially focussed external stakeholders such as banks, credit rating agencies or shareholders.
A similar picture emerges from the choice of sustainability activities. For the majority of businesses, legitimacy-driven measures, such as improving employee motivation and the reputation of the company are more important than profit maximisation and cost reduction. This is also reflected in the organisational and personnel anchoring within the company: PR and communication departments, as well as legal departments are much more frequently entrusted with tasks of sustainability management than finance, accounting and controlling.