The Environmental, Social, Governance, and Financial Performance Effects on Companies that Adopt the United Nations Global Compact

This paper aims to investigate companies' environmental, social, governance (ESG), and financial implications of their commitment to the United Nations Global Compact (UNGC). The focus is placed on companies operating in the three countries with the highest number of UNGC participants: Spain, France, and Japan. The results clearly reveal that adoption of the UNGC often requires an organizational change that fosters stakeholder engagement, ultimately resulting in improvements in companies' ESG performance. Additionally, the results reveal that ESG performance has a significant impact on financial performance for companies that adopted the principles of the UNGC. These findings provide both non-financial and financial incentives to companies to commit to this voluntary corporate social responsibility (CSR) initiative, which will have important implications on companies' strategic management policies that aim to foster sustainable businesses and community development. Finally, the linkages between the UNGC-committed companies' ESG and financial performance may be influenced by geographical spread, mainly due to the appearance of differences in the institutional, societal, and cultural settings.

Beyond words: Testing alignment among inter-organizational performance measures

Purpose: This paper seeks to measure in a quantitative way the degree of alignment among a set of performance measures between two organizations. Design/methodology/approach: This paper extends Venkatraman's test of coalignment to assess the alignment of a set of performance measures governing a contractual inter-organizational relationship. The authors applied the test and present coefficients of misalignment across three sets of measures: those used by a service provider involved in the research, those used by customers contracting the services, and those documented in 11 contracts studied. Findings: Results confirmed a high degree of alignment between target and actual operational performance in the contracts. The alignment of customers' financial objectives and contracts' operational metrics was low. Calculations show poor alignment between the objectives of the provider and the contribution received from the contracts. Research limitations/implications: Some limitations of the conclusions include the small sample of contracts used in the calculations. Further research should include not only actual contracts, but also failed ones. Practical implications: It is possible that misaligned goals, represented in misaligned performance measures, lead to tensions in intra-firm relationships. If these tensions are not addressed properly the relationship could be unstable or terminated prematurely. This method of measuring alignment could detect early potential dangers in intra-firm relationships. Originality/value: This paper extends Venkatraman's test of coalignment to assess the alignment of a set of performance measures governing a contractual inter-organizational relationship. Management researchers and business professionals may use this methodology when exploring degrees of alignment of performance measures in intra-functional and inter-firm relationships. © Emerald Group Publishing Limited.

Development of a tool for rapidly assessing the implementation difficulty and emissions benefits of innovations

Consumer goods manufacturers aiming to reduce the environmental impact associated with their products commonly pursue incremental change strategies, but more radical approaches may be required if we are to address the challenges of sustainable consumption. One strategy to realize step change reductions is to prepare a portfolio of innovations providing different levels of impact reduction in exchange for different levels of organizational resource commitment. In this research a tool is developed to support this strategy, starting with the assumption that through brainstorming or other eco-innovation approaches, a long-list of candidate innovations has been created. The tool assesses the potential greenhouse gas benefit of an innovative option against the difficulty of its implementation. A simple greenhouse gas benefit assessment method based on streamlined LCA was used to analyze impact reduction potential, and a novel measure of implementation difficulty was developed. The predictions of implementation difficulty were compared against expert opinion, and showed similar results indicating the measure can be used sensibly to predict implementation difficulty. The assessment of the environmental gain versus implementation difficulty is visualized in a matrix, showing the trade-offs of several options. The tool is deliberately simple with scalar measures of CO 2 emissions benefits and implementation difficulty so tool users must remain aware of other potential environmental burdens besides greenhouse gases (e.g. water, waste). In addition, although relative life cycle emissions benefits of an option may be low, the absolute impact of an option can be high and there may be other co-benefits, which could justify higher levels of implementation difficulty. Different types of consumer products (e.g. household, personal care, foods) have been evaluated using the tool. Initial trials of the tool within Unilever demonstrate that the tool facilitates rapid evaluation of low-carbon innovations. © 2011 Elsevier Ltd. All rights reserved.