The Impact of Corporate Sustainability on Organizational Processes and Performance
AbstractWe investigate the effect of corporate sustainability on organizational processes and performance. Using a matched sample of 180 US 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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17950.
Date of creation: Mar 2012
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Publication status: Forthcoming: The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance , Robert G. Eccles, Ioannis Ioannou, George Serafeim. in Causes and Consequences of Corporate Culture , Zingales and Poterba. 2014
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Find related papers by JEL classification:
- G3 - Financial Economics - - Corporate Finance and Governance
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-10 (All new papers)
- NEP-BEC-2012-04-10 (Business Economics)
- NEP-ENV-2012-04-10 (Environmental Economics)
- NEP-HRM-2012-04-10 (Human Capital & Human Resource Management)
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