Growing Pains or Growing Gains? Investigating the Influence of Business Growth on Environmental and Social Credentials of Sustainability-driven Enterprises

Abstract: Sustainability-driven businesses combine the principles of conventional for-profit companies with a strong commitment to their social and environmental credentials. This structure enables them to address social problems in an economically sustainable manner and to capitalise on consumer demand for responsibly-made products. The growth of sustainability-driven companies is often seen as another successful step towards sustainability transition. Indeed, a company’s growth allows it to expand its positive environmental and social impact significantly. Nevertheless, many real-life examples indicate that as such companies grow, it becomes more challenging for them to stay loyal to their initial sustainability vision and values. Therefore, this thesis explores how business growth influences the sustainability credentials of sustainability- driven enterprises with an aim to develop a conceptual framework that can serve as an analytical tool for practitioners to analyse the cases of growing mission-driven companies. As a first step, a literature review was conducted in order to answer the research question and to construct an analytical framework that was then tested on the case company, Oatly, a fast-growing Swedish producer of plant-based alternatives to dairy. A review of the company’s latest sustainability report and semi-structured interviews with internal and external respondents were used as the primary data collection methods. The case study provided three main results. Firstly, the framework proved to be an effective instrument for obtaining a better understanding of what elements of a company’s sustainable vision and practices are being or could be influenced by four main factors of growth: overtrading, expansion to new markets, formalisation of the systems, and change in leadership and ownership. Secondly, both positive and negative consequences of growth have been identified. Thirdly, the case of Oatly provided insights on what factors and mechanisms can help sustainability-driven companies retain and improve their sustainability credentials during periods of growth.