Measures to Save the Planet: A qualitative study on the value of concrete cause-effect linkages between sustainability performance and financial performance

Abstract: Sustainability is now more than ever an important aspect for companies to understand and cope with. An increasing number of companies aim to make sustainability part of their overall strategy, and one important aspect in so doing is measurement. However, the benefits of not only measuring sustainability performance but to also establish causal links between the sustainability perspective and the financial perspective is something that is starting to be encouraged. This thesis investigates how concrete cause-effect linkages between sustainability performance and financial performance affect how a company prioritizes the sustainability issue. The study includes two case companies in the real estate industry, and data has been collected through semi-structured interviews with 14 employees from the two companies. The theory of institutional logics is the main theory used to sort through and analyze the empirical findings. The study suggests that establishing concrete causal linkages between sustainability- and financial performance in monetary terms may not contribute considerably to raise the priority level of sustainability action. This is mainly explained by an already existing belief that sustainability performance will contribute to improved profitability in the future, as well as a high level of intrinsic motivation to contribute among employees. Lastly, financial measures on sustainability performance are perceived as less reliable than non-financial ones, which also undermines their efficiency as a tool to heighten the priority level of sustainability action.