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0Классификация факторов устойчивой трансформации бизнеса с точки зрения положительного воздействия на окружающую среду
Толстая Ольга Валерьевна
кандидат экономических наук, ТОО «Консалтинг для устойчивого развития», olga.tolstaia@csdcons.ru |
Горбачева Ирина Игоревна
директор, главный эксперт по корпоративной устойчивости, ТОО «Консалтинг для устойчивого развития», i.gorbacheva@ssolutions.group
С целью снижения негативного воздействия предприятий на окружающую среду в настоящее время все большую актуальность приобретают вопросы сокращения выбросов парниковых газов в рамках борьбы с изменением климата и уменьшения иного негативного воздействия различных индустрий на экосистемы по всему миру. В статье проводится сравнительный анализ существующих исследований, в рамках которых изучались факторы, влияющие на устойчивое развитие компаний, с целью определения наиболее актуального и полного перечня факторов, способствующих экологически устойчивой трансформации бизнеса. По итогам анализа сформулированы четыре основные группы факторов, которые могут способствовать принятию решений о внедрении экологичных бизнес-практик: бизнесовые, влияние заинтересованных сторон, законодательные (регуляторные) и этические, с выделением перечня наиболее значимых факторов по каждой группе. В рамках регуля-торных факторов выделены ограничительные меры, направленные на снижение доли загрязняющих экологию производств, и стимулирующие законодательные инициативы, оказывающие поддержку компаниям, реализующим проекты, направленные на снижение негативного воздействия на окружающую среду.
Ключевые слова: факторы экологичной трансформации бизнеса, экологичные бизнес-практики, ограничительные факторы, стимулирующие факторы, ESG регулирование
Introduction
Our planet faces numerous threats driven by human activities, with industrial enterprises at the forefront, contributing significantly to climate change through high levels of greenhouse gas (GHG) emissions, degradation of ecosystems, deforestation, plastic and water pollution (Drago and Gatto, 2022). These severe implications of industrial activities lead to significant biodiversity loss which will continue with every degree of rising temperature, continued uncontrolled usage of resources and unchanged approach to business operations (United Nations, undated). In addition to negative environmental changes, climate change also results in various social damages, including health problems and increasing medical costs for treatment, extreme weather events destroying houses and infrastructure, and rising sea level making various territories vulnerable for floods (Introcaso, 2024).
To improve the situation, it is essential to promote environmentally sustainable business transformation among companies from various industries. One of key challenges in this process is connected with identifying drivers which can force large industrial companies to adopt eco-friendly business practices being crucial for reducing global negative impact on the environment.
In modern literature there is no single established qualification of drivers influencing eco-friendly business transformation. Some authors divide such drivers into four groups: ethical motives, legislation, stakeholders' pressure and economic opportunities (Bansal and Roth, 2000). Other studies indicate only three groups which may include such drivers as stakeholders' pressures, sustainability drivers being very close to ethical factors and expressing willingness of particular business to perform for the benefit of the environment, and business drivers which may represent a combination of various factors serving business needs (Littlewood et al., 2018); or governmental regulations, financial and environmental performance (Rakhmawati et al., February 2020). Particular drivers within the discussed groups may also vary.
The purpose of this study was to consolidate various views and determine comprehensive classification of drivers influencing environmentally sustainable business transformation, indicating the most significant drivers within each group. Analysis was based on review of literature investigating factors influencing sustainable business development.
Discussion and results
Based on the results of literature review, drivers of environmentally sustainable business transformation were classified depending on two criteria: their primary motives and corresponding ESG (environmental, social, economic and governance) elements.
Based on primary motives, drivers influencing companies' decision to implement eco-friendly business practices were divided into four groups, including: business, stakeholders' pressure, legislative (regulatory), and ethical drivers.
The primary set of factors influencing sustainable business transformation comprises business drivers, which are often at a primary focus of the company's management (Littlewood et al., 2018). This predominance is rooted in the fundamental objectives of any business aimed to secure company's long-term operational sustainability and increase in profit generation. Therefore, businesses may follow eco-friendly practices to ensure the company's long-term economic development driven by:
• Expectation of a profit from eco-friendly business, or the desire to improve company's reputation showing efforts on climate change mitigation in order to attract new investors and clients (ESG Research Pro, undated);
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• Adaptation to global economic trends or climate change consequences which may negatively influence business operations (Winn et al., 2011);
• Willingness to differentiate products from other companies, make business operations more cost effective or respond to consumer preferences focused on eco-friendly products to increase sales (Walsh and Dodds, 2017; Schultz and Williamson, 2005).
However, companies may be rather vulnerable to business drivers as they may potentially turn negative if company's management decides that investments in adoption of environmentally sustainable practices are greater than benefits from the view of a short-term business profitability (The Guardian, undated).
Another increasingly significant group of drivers is associated with stakeholders' pressure (Littlewood et al., 2018). Investors play an important role in shaping the ecological agenda of an organization, requiring greater ESG transparency and promoting sustainable business transformation. According to recent survey, the vast majority of executives in leading organizations mentioned that ESG is an important aspect in the process of taking decision regarding making investments into their own organization, and 70% of investors consider that strong sustainability practices can lead to high returns (Bloomberg, undated; Morgan Stanley, January 2024). Financial institutions may become another driving force in shaping ESG-related business transformations enhancing business to realize green projects and meet ESG criteria to enjoy green financing (HM Government, March 2023).
Customers, employees, and local communities form one more growing group of stakeholders advocating for sustainable business transformation to achieve positive environmental and social impacts, and placing considerable pressure on enterprises. About 86% of the interviewed employees would like to work for an environmentally friendly company, and 83% consumers force enterprises to promote ESG agenda (PWC, undated). In recent years, these stakeholders have increasingly influenced business practices, and their impact on driving environmentally sustainable transformations is expected to become even stronger in the future.
Drivers from legislative (regulatory) group may become even more influential instruments in terms of environmentally sustainable business transformation being predominantly based on governmental decisions (Bansal and Roth, 2000; Rakhmawati et al., February 2020). Analysis of legislative factors forcing the company's management to take eco-friendly business decisions was analyzed in scientific literature in various contexts such as statistical analysis of energy policy influence on sustainable development (Drago and Gatto, 2022), analysis of government regulations in food industry and respective response of management based on interview results (Rakhmawati et al., February 2020), interdependence of external and internal governance influence on sustainable business development across different countries (Sullivan and Gouldson, 2016). At the same time, existing studies do not cover various types of regulatory initiatives as drivers of eco-friendly business transformation. In order to create comprehensive list of regulatory drivers, various legislative initiatives have been analyzed and divided into two major subgroups depending on the nature of their influence on sustainable business transformations, namely: restrictive and incentivizing.
Based on the character of their influence on various types of businesses, legislative drivers comprise of restrictive measures the purpose of which is to reduce the volume of business activities negatively affecting the environment. These drivers may include:
• Regulations governing environmental quality of the product itself or limiting negative ecological impact from particular business activities such as introduction of limits of GHG emissions, waste management, green construction standards (for example, ADUPC, 2016);
• Specific ESG-related reporting standards, including the Global Reporting Initiative (GRI), the Corporate Sustainability Reporting Directive (CSRD), the Sustainability Accounting Standards Board (SASB Standards), European Single Electronic Format (ESEF) Regulation (GRI, undated; EU commission, undated; SASB, undated; GOV.UK, 2020);
• Regulations against placing misleading ESG-related information (greenwashing) in media (TSFF, 2017);
• Governmental financial measures imposing taxes and levies on brown industries with polluting operations and, therefore, forcing companies to limit environmentally unfriendly business activities. Such taxes or levies may be specifically of ecological nature; or imposed on profitable brown industries and indirectly resulting in positive influence on the environment (for example, CPI, May 2017; HMRC, undated).
Legislative factors may also serve as incentivizing forces aimed to encourage businesses to adopt more eco-friendly business practices or even stimulate the development of environmentally focused enterprises by providing tangible benefits aligning with broader environmental and social goals. The most significant incentivizing drivers include:
• Assigning high scores in ESG ratings allowing companies to attract investors (Larker et al., 2022);
• Offering governmental support in the form of subsidies, tax incentives or other stimulative measures allowing companies to reduce the volume of their investments into eco-friendly projects (OECD, undated; EU commission 2, undated). Additionally, these measures level the playing field, enabling smaller enterprises to compete with larger corporations in implementing sustainable practices, thereby accelerating the shift towards a greener economy and fostering innovation.
Last group of factors is driven by ethical considerations, referred to as sustainability drivers in some literature (Littlewood et al., 2018; Bansal and Roth, 2000). These factors represent willingness of a company to do right things towards the environment. Unlike other factors, this group is driven not by external forces but by the business's own intrinsic motivation to address global ecological issues. As such, ethical factors are indicated separately due to their unique origin within the organization itself.
Separate classification of the same drivers is based on the nature of factors in the view of respective ESG elements, and is divided into ecological, social, economic and governance factors.
The combination of various drivers based on their primary motives and ESG-linked nature is described in Picture 1.
Business drivers Stakeholders'
pressure
> Physical > Investors
threats to business (EN)
from climate change > Financial
(EN) institutions / green
> Ensuring financing (EN)
profitability (EN) > Customers
> Changes in (S)
economic > Employees
environment (EN) (S)
> Changes in > Local
consumer communities (S)
preferences (EN)
> New market
driven opportunities
(EN)
> Competitive
pressures (EN)
> Maintaining
business reputation
(EN)
Legislative (regulatory) drivers
Restrictive:
> Regulations limiting negative ecological impact from business activities (G)
> ESG-related reporting standards (incl. ESG-linked IFRS standards and stock exchange regulations) (G)
> Regulations against misleading ESG-related marketing (G)
> Increase in taxes on environmentally unfriendly activities (EN) Stimulative:
> Governmental support for eco-friendly operations, incl. subsidies, tax incentives (EN)
> Assigning high score in ESG ratings (G)_
Ethical drivers (EL) - willingness of companies to do the right things towards the environment
Picture 1. Classification of drivers for eco-friendly business transformation proposed and prepared by the authors. In addition to basic classification based on primary motives divided by columns, this picture also shows breakdown of drivers based on ESG criteria: Ecological (EL), Social (S), Economic (EN) and Governance (G).
Conclusions
This article describes various factors driving eco-friendly business transformation, systematically categorizing them into business, stakeholders' pressure, legislative (regulatory), and ethical groups. While business, stakeholders' pressure and legislative drivers are largely influenced by external demands, ethical drivers reflect a company's internal commitment to sustainability and willingness to act right towards the environment.
Among these groups, legislative drivers may become particularly impactful factors forcing companies to introduce environmentally sustainable business practices, as they are predominantly influenced by the governments' decision. This group includes restrictive measures, including legislation limiting negative ecological impact from business activities, ESG-related reporting standards, regulations eliminating greenwashing in media, and increase of taxes and levies for industries with significant negative effect on the environment, as well as incentivizing initiatives which may include assigning companies with fairly high scores in ESG ratings, and provision of subsidies, tax incentives and other measures from the government to support realization of eco-friendly projects and businesses.
Recognizing the discussed drivers is crucial for guiding potential business transformations towards environmental sustainability, and their combined influence creates an even more powerful framework for driving eco-friendly practices. At the same time, more rigorous analysis is essential to accurately evaluate the cumulative impact as well as the effects of each individual driver.
Classification of drivers influencing environmentally sustainable business transformation
Tolstaia O.V., Gorbacheva I.I.
Sustainability Solutions, Ltd
JEL classification: D20, E22, E44, L10, L13, L16, L19, M20, O11, O12, Q10, Q16, R10,
R38, R40, Z21, Z32
In order to reduce the negative impact of enterprises on the environment, reduction of the volumes of greenhouse gas emissions in the fight against climate change and elimination of other negative impacts of various industries on ecosystems around the world are becoming increasingly important. This article investigates existing studies examining factors of sustainable business development in order to identify the most relevant and complete list of drivers that can contribute to environmentally sustainable business transformation. The results of this study revealed four main groups of drivers forcing companies to implement eco-friendly business practices: business, stakeholders' pressure, legislative (regulatory) and ethical, with a list of the most significant drivers in each group. Regulatory factors may be further divided into restrictive measures aimed at reducing the share of environmentally polluting businesses, and incentivizing legislative initiatives providing support to companies implementing projects aimed at reducing the negative impact on the environment.
Keywords: drivers of environmentally sustainable business transformation, eco-friendly business practices, restrictive drivers, incentivizing drivers, ESG regulations
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