Turning sustainability into action: Explaining firms' sustainability efforts and their impact on firm performance

Abstract

This research seeks to shed more light on how manufacturing firms adjust their strategy according to the sustainability challenge. Strategic decisions are influenced by strategic long-term considerations, which take into account aspects that lie within firms' boundaries and beyond. Therefore, the first step of this paper is to operationalise the sustainability challenge by identifying relevant drivers for sustainability that firms are exposed to. Second, we develop a framework showing which dimensions affect decisions concerning a sustainability move and which dimensions are affected by these decisions. A sustainability move can contain initiatives emphasising the adoption of new manufacturing technologies, the development of new, sustainable products or the integration of green practices into the supply chain. Next to the influence of sustainability drivers, we explain firms' decisions concerning a sustainability move with past performance, firm size and current level of sustainability action. Depending on whether initiatives are led by strategic or ad-hoc decisions, firms have to explore new knowledge and/or exploit existing knowledge to realise competitive advantage. The goal of this research is to provide an explanation of how decisions of sustainability moves are motivated and which dimensions in the firm are affected by these moves.