Double Materiality Approach and Sustainable Business Model Paradigm: A Three-Fold Analysis

Authors

  • Camelia Lungu Bucharest University of Economic Studies
  • Chirata Caraiani Bucharest University of Economic Studies
  • Andreea Madalina Bojan Bucharest University of Economic Studies https://orcid.org/0009-0006-9717-6556

DOI:

https://doi.org/10.34190/ecmlg.20.1.2930

Keywords:

Double materiality, Sustainable business model, Three-fold analysis, SDGs prioritisation, ESG policies and practices

Abstract

Adopting the United Nations 2030 Agenda for Sustainable Development, governments commit to the 17 goals and 169 associated targets in areas of critical importance for humanity and planet, while companies manifest a growing interest in playing a significant role to SDGs prioritisation. Researchers, policymakers, stakeholders, and analysts are all preoccupied about responsible ways of redesigning the business model to mitigate the growing concerns, such as companies’ failures, global multidimensional crisis, and sustainability-related issues. Under the light of institutional theory, legitimacy theory, stakeholder theory, the aim of this research is to investigate how environmental, social and governance (ESG) policies and practices included in a sustainable business model may respond to the double materiality approach in order to contribute to a balance among divergent interests of managers, investors, and other stakeholders. The financial materiality is conceptualized using ESG data, that mainly targets investor’s needs. Stakeholder materiality, is concerned with external impact of companies, embodied in societal-level outcomes measured as the number of SDGs addressed in corporate reporting. In this study, company-year data are collected from Refinitiv Eikon database, starting with 2015, until current reporting period and analysed using frequency, univariate and correlation analyses. Based on Levene homogeneity, the ANOVA parametric t-test results are validated by Mann-Whitney Wilcoxon and Krushkal Wallis non-parametric tests. Three main research questions are responded. First, the findings examine and discuss the evolution of sustainability reporting measured with ESG scores, decomposed by the three pillars and ten categories, along with the SDGs prioritisation. Second, statistically significant differences in ESG and SDGs variables reported by various groups clustered on industry-related corporate characteristics are discussed. Third, the significant associations between ESG measures and SDGs are analysed from the double materiality perspective. The study contributes to the academic and practical understanding of the evolving business model under normative dimension of institutional theory, incorporating the decision to engage in current sustainability frameworks and policies.

Author Biographies

Chirata Caraiani, Bucharest University of Economic Studies

Chiraţa CARAIANI is Professor at Bucharest University of Economic Studies, Romania and PhD coordinator in accounting. Current research topics are Sustainable business model - approach to human capital and IT governance towards the value creation process; Corporate awareness and behavior in human resources management in the context of economic crisis.

Andreea Madalina Bojan, Bucharest University of Economic Studies

Andreea Madalina Bojan is a PhD Student at Doctoral School of Accounting, Bucharest University of Economic Studies, Romania. Her thesis focuses on Challenges and opportunities of corporate governance policies in the post-pandemic period. Current research interests are focused on corporate governance, earnings management, and the challenges from impression management perspective.

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Published

2024-11-13