Research on Corporate Sustainability: Review and Directions for Future Research

Foundations and Trends® in Accounting: Vol. 14: No. 2, pp 73-127, 2020

52 Pages Posted: 26 Oct 2020

See all articles by Jody Grewal

Jody Grewal

Joseph L. Rotman School of Management - University of Toronto

George Serafeim

Harvard Business School

Date Written: September 5, 2020

Abstract

We review the literature on corporate sustainability and provide directions for future research. Our review focuses on three actions: measuring, managing and communicating corporate sustainability performance. Measurement is the least developed of the three and represents promising opportunities for research. Compelling evidence now exists on the role of management control systems, investor pressure and mandated disclosure in improving corporate sustainability outcomes. Research has moved beyond weighing the importance of all sustainability issues equally, with recent studies drawing distinctions between the financial materiality of different sustainability issues. Collectively, this new line of inquiry suggests that improving performance on material sustainability metrics is related to improved financial performance, helping to resolve four decades of inconclusive evidence on the relation between sustainability and financial outcomes. Finally, we review research on how disclosure mediums, accounting standards, information monitors and intermediaries shape the communication of sustainability performance. We conclude with a call for research on how to measure performance in the 21st century when corporate purpose extends beyond shareholder value maximization.

Keywords: Sustainability, ESG, Measurement, Accounting, Disclosure, Management Control Systems

JEL Classification: M12, M14, M41, M42, M48, M51, M54, G34, Q51, Q52

Suggested Citation

Grewal, Jyothika and Serafeim, George, Research on Corporate Sustainability: Review and Directions for Future Research (September 5, 2020). Foundations and Trends® in Accounting: Vol. 14: No. 2, pp 73-127, 2020, Available at SSRN: https://ssrn.com/abstract=3687330 or http://dx.doi.org/10.2139/ssrn.3687330

Jyothika Grewal

Joseph L. Rotman School of Management - University of Toronto ( email )

105 St. George Street
Toronto, Ontario M5J 2Z6
Canada
6172060366 (Phone)

HOME PAGE: http://https://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Grewal

George Serafeim (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=15705

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