Robert Chia and Andreas Rasche elaborate on the challenges of capturing the actual doing of strategy, which requires researchers to adopt a new worldview. They argue that the traditional ways of studying strategy work have led to an explanatory rupture between research accounts of strategy practice and the practice itself, which is intimately linked to the adoption of a set of epistemological premises that they term the building worldview. This view is characterized by two basic assumptions: (1) individuals are treated as discretely bounded entities; and (2) there is a clear split between the mental and physical realm; cognition and mental representation of the world necessarily precede any meaningful action. Accordingly, strategic action is explained through recourse to the intention of actors. They contrast this with what they refer to as dwelling world-view, which allows getting close to the actual doing of strategy because it does away with the assumption that identities and personal characteristics pre-exist social practice. Within this view, vocial practices are given primacy over individual agency and intention. Thus, strategic actions are explained not on the basis of individual intentions but as the product of particular, historically situated practices. Chia and Rasche discuss the epistemological consequences of these two worldviews showing how research findings depend on the chosen worldview.

This chapter introduces the debate about how a firm’s strategy and corporate sustainability are interrelated. Section 5.2 looks at the term ‘strategy’ and identifies some key characteristics of strategic decisions. Based on this, we discuss which characteristics a strategic approach towards corporate sustainability would entail. Section 5.3 introduces two types of approaches to link business strategy and corporate sustainability: outside-in thinking (based on the assumption that sustainability-strategy alignment starts with reflections on a firm’s competitive context) and inside-out thinking (based on the assumption that such alignment starts with reflections on a firm’s value chain). Section 5.4 extends this debate and shows how sustainability-strategy alignment can be achieved for companies with multiple business units (corporate strategy), as well as for firms that target only one market (business strategy). Section 5.5 demonstrates how firms can identify ‘material’ (i.e., strategic) ESG issues through so-called materiality assessments. Finally, section 5.6 distinguishes different stages of alignment between a firm’s strategy and its sustainability efforts, ranging from complete detachment and denial to companies that build their entire strategy around sustainability.

This chapter discusses the relationship between corporate governance and corporate sustainability. We start by looking into the different components of the general corporate governance system. This allows us to revisit a central tension: shareholder- versus stakeholder-oriented governance. We then discuss how well-designed corporate governance can support firms’ sustainability efforts. We label this debate ‘corporate governance for sustainability’, and we discuss how sustainability topics can be integrated into the discussions of boards of directors. Next, we show that some aspects of corporate governance can themselves pose challenges that need to be discussed under the ESG umbrella. We label this debate ‘corporate governance as sustainability’, and we focus on topics that reflect the ‘G’ in ESG (e.g., executive compensation). Finally, we discuss elements of a possible reformed corporate governance system which would allow to better address sustainability-related debates.

We start by discussing what motivates investors to enter the sustainability field (section 11.2). We debate different reasons for their engagement, ranging from concerns for securing competitive returns to changes in the regulatory landscape and client demand. Next, we discuss how ESG factors are integrated into different asset classes. We first discuss how ESG considerations are integrated into equity investing (section 11.3). We then look at other ways to consider ESG-related information in investment decisions, focusing on impact investing and fixed income (section 11.4). Section 11.5 looks at how investors that already have invested in companies can improve these firms’ ESG performance, either via active engagement and dialogue or via voting on shareholder resolutions. Next, we discuss what different kinds of data can shape investors’ consideration of sustainability issues (section 11.6). Finally, we look at the new European legislation (Sustainable Finance Disclosure Regulation, SFDR) which requires investors to disclose the level of sustainability risks and adverse sustainability impacts associated with their investment decisions.

This chapter starts by discussing the changing overall context in which business, nature and society operate. It is important to understand this context, because it shapes the problems that corporate sustainability aims to address, and it influences how firms can cope with these problems. We then introduce the concept of corporate sustainability. We discuss similarities and differences to related concepts such as corporate social responsibility and business ethics. Next, we review some of the main environmental, social and governance (ESG) issues that firms are asked to address as part of their corporate sustainability commitments. Finally, the chapter reviews four key motivations (instrumental, ethical, stakeholder-based and political) that underpin firms’ corporate sustainability commitments.

In the concluding chapter of the book, we reflect on the future of corporate sustainability. We summarise the key topics covered in each of the four sections – approaches, actors, processes and issues. We present past and future developments for each of these sections. We also reflect on how some of the tensions as presented in the introduction remain and become core to corporate sustainability debates. Finally, we end on a reflection of our personal roles in advancing sustainability.