Systematic Review: Valuing Business Sustainability
63 per cent of studies reveal positive correlation between sustainability and financial performance.
NBS reviewed 30 years of reputable research across 159 applied and academic studies to answer the question, "Does CSR create value for a firm?"Valuing Business Sustainability: A Systematic Review
synthesizes the entire body of research on valuing sustainability including reputable, peer-reviewed literature from both academia and practice. Inspired by ideas from the NBS Leadership Council
, the review addresses the questions: Do sustainability activities improve financial performance, or does financial performance give firms more resources to invest in sustainability? At what point does further investment in sustainability destroy company value?
Most previous studies have examined the relationship between financial performance and some measure of sustainability to uncover the presence of a business case. We focus on tools and metrics used to quantify the financial impacts of sustainability.
Our review of the research examining the business case for sustainability spans 36 years and counting, with the majority of studies (63 per cent) showing a positive relationship between sustainability and financial performance; 22 per cent report a neutral or mixed relationship, and only 15 per cent of studies report a negative relationship.
Using key findings from the literature, the Systematic Review
identifies and analyzes the importance of three categories of metrics relevant to sustainability: mediating metrics, intermediate outcome metrics, and end state outcome metrics. Finally, it provides a useful list of recommended sustainability valuation resources to help managers put metrics into practice. Sustainability metrics are incredibly varied, reflecting the diverse nature of sustainability itself. Future research should continue to examine the mediation process between sustainability and financial performance.
Senior executives and decision-makers in strategy, operations, finance, and human resources can use this report to develop their business case for sustainability.