Environmental, social and governance factors in companies’ business models and the motives of incorporated them in the core business
Abstract
The aim of the article is to study ESG factors and the motives of including the ESG perspective by companies in their business models (BM). The 2-stage research procedure was used to analyse the problem: bibliographic research was carried out with the use of VOSviewer software. In the paper, 99 from 3000 publications were selected for in-depth analyses, and various types of correlation measures were selected, examining the strength and direction of the relationship between the variables included in two-way and multi-way frequency tables. Fourteen binary variables were constructed with two categories, “yes” and “no”, which were assigned ranks 1 and 0, respectively. It turned out that there is a moderate (0.379) significant correlation between ESG factors and companies’ business models. The environmental factor is most often emphasized in these models (0.308). In the SME sector, CSR (1.000 – full correlation) and ESG factors (0.471) are taken into account, with the strongest relationships between this sector and Government (0.615) and Social (0.549). The role of the financial market in supporting sustainability in companies’ business models is growing and taking on importance.
First published online 01 March 2022
Keyword : companies, sustainable business model, ESG factors, non-financial factors, relationships, corporate social responsibility
How to Cite
Bak, I., Ziolo, M., Cheba, K., & Spoz, A. (2022). Environmental, social and governance factors in companies’ business models and the motives of incorporated them in the core business. Journal of Business Economics and Management, 23(4), 837–855. https://doi.org/10.3846/jbem.2022.16207
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2–3), 195–215. https://doi.org/10.1016/j.lrp.2010.01.004
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Demil, B., Lecocq, X., Ricart, J. E., & Zott, C. (2015). Introduction to the special issue: Business models within the domain of strategic entrepreneurship. Strategic Entrepreneurship Journal, 9(1), 1–11. https://doi.org/10.1002/sej.1194
Dixon, S. E., & Clifford, A. (2007). Ecopreneurship – a new approach to managing the triple bottom line. Journal of Organizational Change Management, 20(3), 326–345. https://doi.org/10.1108/09534810710740164
Eliwa, Y., Aboud, A., & Saleh, A. (2021). ESG practices and the cost of debt: Evidence from EU countries. Critical Perspectives on Accounting, 79, 102097. https://doi.org/10.1016/j.cpa.2019.102097
Geissdoerfer, M., Vladimirova, D., & Evans, S. (2018). Sustainable business model innovation: A review. Journal of Cleaner Production, 198, 401–416. https://doi.org/10.1016/j.jclepro.2018.06.240
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Hong, R. J., & Jinho, C. (2017). Knowledge structure by keyword network analysis: Focusing on business model research topics. Advanced Science Letters, 23(10), 9407–9411. https://doi.org/10.1166/asl.2017.9713
Jones, G. M. (1960). Educators, electrons, and business models: A problem in synthesis. Accounting Review, 35(4), 619–626.
Kim, S., & Li, Z. (F.) (2021). Understanding the impact of ESG practices in corporate finance. Sustainability, 13(7), 3746. https://doi.org/10.3390/su13073746
Kluza, K., Ziolo, M., & Spoz, A. (2021). Innovation and environmental, social, and governance factors influencing sustainable business models – Meta-analysis. Journal of Cleaner Production, 303, 127015. https://doi.org/10.1016/j.jclepro.2021.127015
Li, X., Qiao, H., & Wang, S. (2017). Exploring evolution and emerging trends in business model study: A co-citation analysis. Scientometrics, 111(2), 869–887. https://doi.org/10.1007/s11192-017-2266-5
Lozano, R. (2018). Sustainable business models: Providing a more holistic perspective. Business Strategy and the Environment, 27(8), 1159–1166. https://doi.org/10.1002/bse.2059
Magretta, J. (2002). Why business models matter. Harvard Business Review, 80, 86–92.
Marczewska, M., & Kostrzewski, M. (2020). Sustainable business models: A bibliometric performance analysis. Energies, 13(22), 6062. https://doi.org/10.3390/en13226062
Mider, D., & Marcinkowska, A. (2013). Analiza danych ilościowych dla politologów. Praktyczne wprowadzenie z wykorzystaniem programu GNU PSPP. ACAD, Warszawa.
Neumeyer, X., & Santos, S. C. (2018). Sustainable business models, venture typologies, and entrepreneurial ecosystems: A social network perspective. Journal of Cleaner Production, 172, 4565–4579. https://doi.org/10.1016/j.jclepro.2017.08.216
Ng, A. C., & Rezaee, Z. (2020). Business sustainability factors and stock price informativeness. Journal of Corporate Finance, 64, 101688. https://doi.org/10.1016/j.jcorpfin.2020.101688
Osterwalder, A., Pigneur, Y., & Tucci, C. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the Association for Information Systems, 16. https://doi.org/10.17705/1CAIS.01601
Park, S. R., & Jang, J. Y. (2021). The impact of ESG management on investment decision: Institutional investors’ perceptions of country-specific ESG criteria. International Journal of Financial Studies, 9(3), 48. https://doi.org/10.3390/ijfs9030048
Pedersen, E. R. G., Gwozdz, W., & Hvass, K. K. (2018). Exploring the relationship between business model innovation, corporate sustainability, and organisational values within the fashion industry. Journal of Business Ethics, 149(2), 267–284. https://doi.org/10.1007/s10551-016-3044-7
Perianes-Rodriguez, A., & Waltman, L. (2016). Constructing bibliometric networks: A comparison between full and fractional counting. Journal of Infometrics, 10(4), 1178–1195. https://doi.org/10.1016/j.joi.2016.10.006
Richardson, J. (2008). The business model: An integrative framework for strategy execution. Strategic Change, 17(5–6), 133–144. https://doi.org/10.1002/jsc.821
Ritala, P., Huotari, P., Albareda, L., Puumalainen, K., & Bocken, N. (2018). Sustainable business model adoption among S&P 500 firms: A longitudinal content analysis study. Journal of Cleaner Production, 170, 216–226. https://doi.org/10.1016/j.jclepro.2017.09.159
Saygili, E., Arslan, S., & Birkan, A. O. (2021). ESG practices and corporate financial performance: Evidence from Borsa Istanbul. Borsa Istanbul Review (In Press). https://doi.org/10.1016/j.bir.2021.07.001
Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: The role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95–119. https://doi.org/10.1504/IJISD.2012.046944
Sinha, R., Datta, M., & Ziolo, M. (2019). Inclusion of ESG factors in investments and value addition: A meta-analysis of the relationship. In W. Tarczyński & K. Nermend (Eds.), Springer Proceedings in Business and Economics. Effective investments on capital markets (pp. 93–109). https://doi.org/10.1007/978-3-030-21274-2_7
Slack, K. (2012). Mission impossible?: Adopting a CSR-based business model for extractive industries in developing countries. Resources Policy, 37(2), 179–184. https://doi.org/10.1016/j.resourpol.2011.02.003
Stanisz, A. (2006). Przystępny kurs statystyki z zastosowaniem STATISTICA PL na przykładach z medycyny: Tom 1. Statystyki podstawowe. StatSoft Polska.
Stubbs, W., & Cocklin, C. (2008). Conceptualizing a sustainability business model. Organization & Environment, 21(2), 103–127. https://doi.org/10.1177/1086026608318042
Timmers, P. (1998). Business models for electronic markets. Electronic Markets, 8(2), 3–8.
Upward, A., & Jones, P. (2016). An ontology for strongly sustainable business models: Defining an enterprise framework compatible with natural and social science. Organization & Environment, 29(1), 97–123. https://doi.org/10.1177/1086026615592933
van Eck, N. J., & Waltman, L. (2010). Software survey: VOSviewer, a computer program for bibliometric mapping. Scientometrics, 84, 523–538. https://doi.org/10.1007/s11192-009-0146-3
Vogel, D. (2005). Is there a market for virtue? The business case for corporate social responsibility. California Management Review, 47, 19–45. https://doi.org/10.2307/41166315
Waltman, L., van Eck, N. J., & Novonosm, E. (2010). A unified approach to mapping and clustering of bibliometric networks. Journal of Informetrics, 4(4), 629–635. https://doi.org/10.1016/j.joi.2010.07.002
Zioło, M., Bąk, I., Cheba K., & Spoz, A. (2020). The relationship between banks and company business models – sustainability context. Procedia Computer Science, 176, 1507–1516. https://doi.org/10.1016/j.procs.2020.09.161
Zollo, M., Cennamo, C., & Neumann, K. (2013). Beyond what and why: Understanding organizational evolution towards sustainable enterprise models. Organization & Environment, 26(3), 241–259. https://doi.org/10.1177/1086026613496433
Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2–3), 216–226. https://doi.org/10.1016/j.lrp.2009.07.004
Zysno, P. V. (1997). The modication of the Phi-coefficient reducing its dependence on the marginal distribution. Methods of Psychological Research Online, 2(1), 41–52. http://www.pabst-publishers.de
Ahmad, N., Mobarek, A., & Roni, N. N. (2021). Revisiting the impact of ESG on financial performance of FTSE350 UK firms: Static and dynamic panel data analysis. Cogent Business & Management, 8(1), 1900500. https://doi.org/10.1080/23311975.2021.1900500
Albatineh, A. N., Niewiadomska-Bugaj, M., & Mihalko, D. (2006). On similarity indices and correction for chance agreement. Journal of Classification, 23, 301–313. https://doi.org/10.1007/s00357-006-0017-z
Ashwin Kumar, N. C., Smith, C., Badis, L., Wang, N., Ambrosy, P., & Tavares, R. (2016). ESG factors and risk-adjusted performance: A new quantitative model. Journal of Sustainable Finance & Investment, 6(4), 292–300. https://doi.org/10.1080/20430795.2016.1234909
Bąk, I., Markowicz, I., Mojsiewicz, M., & Wawrzyniak, K. (2019). Wzory i tablice. Metody statystyczne i ekonometryczne (wyd. II). CeDeWu, Warszawa.
Bellman, R., Clark, C. E., Malcolm, D. G., Craft, C. J., & Ricciardi, F. M. (1957). On the construction of a multi-stage, multi-person business game. Operations Research, 5(4), 469–503. https://doi.org/10.1287/opre.5.4.469
Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42–56. https://doi.org/10.1016/j.jclepro.2013.11.039
Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2–3), 195–215. https://doi.org/10.1016/j.lrp.2010.01.004
Chesbrough, H. (2006). Open business models: How to thrive in the new innovation landscape. Harvard Business Review Press.
Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change, 11(3), 529–555. https://doi.org/10.1093/icc/11.3.529
Chouaibi, S., Chouaibi, J., & Rossi, M. (2021). ESG and corporate financial performance: The mediating role of green innovation: UK common law versus Germany civil law. EuroMed Journal of Business, 17(1), 46–71. https://doi.org/10.1108/EMJB-09-2020-0101
Demil, B., Lecocq, X., Ricart, J. E., & Zott, C. (2015). Introduction to the special issue: Business models within the domain of strategic entrepreneurship. Strategic Entrepreneurship Journal, 9(1), 1–11. https://doi.org/10.1002/sej.1194
Dixon, S. E., & Clifford, A. (2007). Ecopreneurship – a new approach to managing the triple bottom line. Journal of Organizational Change Management, 20(3), 326–345. https://doi.org/10.1108/09534810710740164
Eliwa, Y., Aboud, A., & Saleh, A. (2021). ESG practices and the cost of debt: Evidence from EU countries. Critical Perspectives on Accounting, 79, 102097. https://doi.org/10.1016/j.cpa.2019.102097
Geissdoerfer, M., Vladimirova, D., & Evans, S. (2018). Sustainable business model innovation: A review. Journal of Cleaner Production, 198, 401–416. https://doi.org/10.1016/j.jclepro.2018.06.240
Gilberthorpe, E., & Banks, G. (2012). Development on whose terms?: CSR discourse and social realities in Papua New Guinea’s extractive industries sector. Resources Policy, 37(2), 185–193. https://doi.org/10.1016/j.resourpol.2011.09.005
Hajiheydari, N., Talafidaryani, M., Khabiri, S., & Salehi, M. (2019). Business model analytics: Technically review business model research domain. Foresight, 21(6), 654–679. https://doi.org/10.1108/FS-01-2019-0002
Halme, M., & Korpela, M. (2014). Responsible innovation toward sustainable development in small and medium‐sized enterprises: A resource perspective. Business Strategy and the Environment, 23(8), 547–566. https://doi.org/10.1002/bse.1801
Hong, R. J., & Jinho, C. (2017). Knowledge structure by keyword network analysis: Focusing on business model research topics. Advanced Science Letters, 23(10), 9407–9411. https://doi.org/10.1166/asl.2017.9713
Jones, G. M. (1960). Educators, electrons, and business models: A problem in synthesis. Accounting Review, 35(4), 619–626.
Kim, S., & Li, Z. (F.) (2021). Understanding the impact of ESG practices in corporate finance. Sustainability, 13(7), 3746. https://doi.org/10.3390/su13073746
Kluza, K., Ziolo, M., & Spoz, A. (2021). Innovation and environmental, social, and governance factors influencing sustainable business models – Meta-analysis. Journal of Cleaner Production, 303, 127015. https://doi.org/10.1016/j.jclepro.2021.127015
Li, X., Qiao, H., & Wang, S. (2017). Exploring evolution and emerging trends in business model study: A co-citation analysis. Scientometrics, 111(2), 869–887. https://doi.org/10.1007/s11192-017-2266-5
Lozano, R. (2018). Sustainable business models: Providing a more holistic perspective. Business Strategy and the Environment, 27(8), 1159–1166. https://doi.org/10.1002/bse.2059
Magretta, J. (2002). Why business models matter. Harvard Business Review, 80, 86–92.
Marczewska, M., & Kostrzewski, M. (2020). Sustainable business models: A bibliometric performance analysis. Energies, 13(22), 6062. https://doi.org/10.3390/en13226062
Mider, D., & Marcinkowska, A. (2013). Analiza danych ilościowych dla politologów. Praktyczne wprowadzenie z wykorzystaniem programu GNU PSPP. ACAD, Warszawa.
Neumeyer, X., & Santos, S. C. (2018). Sustainable business models, venture typologies, and entrepreneurial ecosystems: A social network perspective. Journal of Cleaner Production, 172, 4565–4579. https://doi.org/10.1016/j.jclepro.2017.08.216
Ng, A. C., & Rezaee, Z. (2020). Business sustainability factors and stock price informativeness. Journal of Corporate Finance, 64, 101688. https://doi.org/10.1016/j.jcorpfin.2020.101688
Osterwalder, A., Pigneur, Y., & Tucci, C. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the Association for Information Systems, 16. https://doi.org/10.17705/1CAIS.01601
Park, S. R., & Jang, J. Y. (2021). The impact of ESG management on investment decision: Institutional investors’ perceptions of country-specific ESG criteria. International Journal of Financial Studies, 9(3), 48. https://doi.org/10.3390/ijfs9030048
Pedersen, E. R. G., Gwozdz, W., & Hvass, K. K. (2018). Exploring the relationship between business model innovation, corporate sustainability, and organisational values within the fashion industry. Journal of Business Ethics, 149(2), 267–284. https://doi.org/10.1007/s10551-016-3044-7
Perianes-Rodriguez, A., & Waltman, L. (2016). Constructing bibliometric networks: A comparison between full and fractional counting. Journal of Infometrics, 10(4), 1178–1195. https://doi.org/10.1016/j.joi.2016.10.006
Richardson, J. (2008). The business model: An integrative framework for strategy execution. Strategic Change, 17(5–6), 133–144. https://doi.org/10.1002/jsc.821
Ritala, P., Huotari, P., Albareda, L., Puumalainen, K., & Bocken, N. (2018). Sustainable business model adoption among S&P 500 firms: A longitudinal content analysis study. Journal of Cleaner Production, 170, 216–226. https://doi.org/10.1016/j.jclepro.2017.09.159
Saygili, E., Arslan, S., & Birkan, A. O. (2021). ESG practices and corporate financial performance: Evidence from Borsa Istanbul. Borsa Istanbul Review (In Press). https://doi.org/10.1016/j.bir.2021.07.001
Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: The role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95–119. https://doi.org/10.1504/IJISD.2012.046944
Sinha, R., Datta, M., & Ziolo, M. (2019). Inclusion of ESG factors in investments and value addition: A meta-analysis of the relationship. In W. Tarczyński & K. Nermend (Eds.), Springer Proceedings in Business and Economics. Effective investments on capital markets (pp. 93–109). https://doi.org/10.1007/978-3-030-21274-2_7
Slack, K. (2012). Mission impossible?: Adopting a CSR-based business model for extractive industries in developing countries. Resources Policy, 37(2), 179–184. https://doi.org/10.1016/j.resourpol.2011.02.003
Stanisz, A. (2006). Przystępny kurs statystyki z zastosowaniem STATISTICA PL na przykładach z medycyny: Tom 1. Statystyki podstawowe. StatSoft Polska.
Stubbs, W., & Cocklin, C. (2008). Conceptualizing a sustainability business model. Organization & Environment, 21(2), 103–127. https://doi.org/10.1177/1086026608318042
Timmers, P. (1998). Business models for electronic markets. Electronic Markets, 8(2), 3–8.
Upward, A., & Jones, P. (2016). An ontology for strongly sustainable business models: Defining an enterprise framework compatible with natural and social science. Organization & Environment, 29(1), 97–123. https://doi.org/10.1177/1086026615592933
van Eck, N. J., & Waltman, L. (2010). Software survey: VOSviewer, a computer program for bibliometric mapping. Scientometrics, 84, 523–538. https://doi.org/10.1007/s11192-009-0146-3
Vogel, D. (2005). Is there a market for virtue? The business case for corporate social responsibility. California Management Review, 47, 19–45. https://doi.org/10.2307/41166315
Waltman, L., van Eck, N. J., & Novonosm, E. (2010). A unified approach to mapping and clustering of bibliometric networks. Journal of Informetrics, 4(4), 629–635. https://doi.org/10.1016/j.joi.2010.07.002
Zioło, M., Bąk, I., Cheba K., & Spoz, A. (2020). The relationship between banks and company business models – sustainability context. Procedia Computer Science, 176, 1507–1516. https://doi.org/10.1016/j.procs.2020.09.161
Zollo, M., Cennamo, C., & Neumann, K. (2013). Beyond what and why: Understanding organizational evolution towards sustainable enterprise models. Organization & Environment, 26(3), 241–259. https://doi.org/10.1177/1086026613496433
Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2–3), 216–226. https://doi.org/10.1016/j.lrp.2009.07.004
Zysno, P. V. (1997). The modication of the Phi-coefficient reducing its dependence on the marginal distribution. Methods of Psychological Research Online, 2(1), 41–52. http://www.pabst-publishers.de