IDEAS home Printed from https://ideas.repec.org/a/bla/jomstd/v61y2024i6p2373-2405.html
   My bibliography  Save this article

Penalty Zones in International Sustainability Standards: Where Improved Sustainability Doesn't Pay

Author

Listed:
  • Nicole Darnall
  • Konstantinos Iatridis
  • Effie Kesidou
  • Annie Snelson‐Powell

Abstract

Adopting an international sustainability standard (ISS) helps firms improve their sustainability performance. It also acts as a credible market ‘signal’ that legitimizes firms' latent sustainability practices while improving their market value. But how do these signals function when firms adopt multiple ISSs? We show that the relationships between firms' ISSs adoption and their market value and their sustainability performance appear positive. However, beyond a tipping point of 2 ISSs, firms' market gains decline, even though their sustainability performance continues to improve until a tipping point of 3 ISSs. Differing tipping points create a gap that we refer to as the ‘penalty zone’ – the place where market value declines, even though firms' actual sustainability performance continues to improve. The penalty zone arises because of imprecisions in market signals and serves as a significant barrier to firms wishing to further their sustainability agenda through additional ISS adoption.

Suggested Citation

  • Nicole Darnall & Konstantinos Iatridis & Effie Kesidou & Annie Snelson‐Powell, 2024. "Penalty Zones in International Sustainability Standards: Where Improved Sustainability Doesn't Pay," Journal of Management Studies, Wiley Blackwell, vol. 61(6), pages 2373-2405, September.
    • Handle: RePEc:bla:jomstd:v:61:y:2024:i:6:p:2373-2405
    DOI: 10.1111/joms.12975
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joms.12975
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joms.12975?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jomstd:v:61:y:2024:i:6:p:2373-2405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.