Ashutosh Singh, Rsha Alghafes, Judit Petra Koltai, Sushant Kumar Vishnoi
Generative artificial intelligence is playing a significant role in the transformation of digital ecosystems by reinventing the processes of content generation, process automation, product innovation and customer experience. At the same time that these technologies are becoming more integrated into routine operations, the focus has shifted to the ethical and environmental consequences associated with their widespread application. An investigation of the operational sustainability associated with the generative artificial intelligence systems would be crucial, as it would provide information about how these systems match ideals such as efficiency, circularity and environmental responsibility. We explore how users understand and engage with sustainability principles, specifically lean, circular and green operational frameworks within generative artificial intelligence environments. We collect user reviews of 72 recently launched generative AI platforms from 2022 to 2024 and utilise advanced machine learning methods, including Word2Vec modelling, sentiment and regression analysis, to reveal how text datasets reflect customer perceptions. We find that the lean theme is the most prominent feature of operational sustainability, with the highest sentiment score, followed by the green and circular themes. Our findings show that there is a growing respect among the general public for artificial intelligence systems that exhibit responsible and efficient design.
{"title":"Harnessing Generative AI for Sustainable Supply Chains: Lean, Circular and Green Perspectives","authors":"Ashutosh Singh, Rsha Alghafes, Judit Petra Koltai, Sushant Kumar Vishnoi","doi":"10.1002/bse.70515","DOIUrl":"https://doi.org/10.1002/bse.70515","url":null,"abstract":"Generative artificial intelligence is playing a significant role in the transformation of digital ecosystems by reinventing the processes of content generation, process automation, product innovation and customer experience. At the same time that these technologies are becoming more integrated into routine operations, the focus has shifted to the ethical and environmental consequences associated with their widespread application. An investigation of the operational sustainability associated with the generative artificial intelligence systems would be crucial, as it would provide information about how these systems match ideals such as efficiency, circularity and environmental responsibility. We explore how users understand and engage with sustainability principles, specifically lean, circular and green operational frameworks within generative artificial intelligence environments. We collect user reviews of 72 recently launched generative AI platforms from 2022 to 2024 and utilise advanced machine learning methods, including Word2Vec modelling, sentiment and regression analysis, to reveal how text datasets reflect customer perceptions. We find that the lean theme is the most prominent feature of operational sustainability, with the highest sentiment score, followed by the green and circular themes. Our findings show that there is a growing respect among the general public for artificial intelligence systems that exhibit responsible and efficient design.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"182 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145937544","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Krishnendu Saha, Narain Gupta, Deniz E. Yoruk, Vikas Kumar
The transition to a circular economy (CE) in the textile and clothing (TC) industry is frequently attributed to sustainability‐oriented innovation (SOI), yet empirical understanding of the systemic conditions under which SOI enables CE remains underdeveloped. This study addresses the gap by offering a novel, context‐specific analysis of how consumer behaviour and institutional quality shape the effectiveness of SOI in a high‐consumption, developed economy context. Drawing on survey data from 280 UK‐based textile and clothing firms and employing rigorous partial least squares‐structural equation modelling (PLS‐SEM), this study provides robust evidence that SOI has a significant positive influence on circular economy transitions (CET). However, this effect is contingent: it is strengthened by consumer willingness to buy and weakened by institutional voids. Notably, regulatory compliance, often assumed to drive sustainability, does not significantly moderate the relationship between the SOI and CET. These findings challenge linear models of innovation diffusion and reinforce a more relational, system‐aware understanding of circular transitions. The study makes an original theoretical contribution by modelling SOI as a second‐order construct and CET as a multidimensional outcome. It offers actionable insights for firms and policymakers by exposing the limitations of compliance‐led strategies and calling for more integrated, behaviourally informed approaches to managing innovation for sustainability.
{"title":"Sustainability‐Oriented Innovation and Circular Economy Transitions: Evidence From the UK Textile and Clothing Industry","authors":"Krishnendu Saha, Narain Gupta, Deniz E. Yoruk, Vikas Kumar","doi":"10.1002/bse.70518","DOIUrl":"https://doi.org/10.1002/bse.70518","url":null,"abstract":"The transition to a circular economy (CE) in the textile and clothing (TC) industry is frequently attributed to sustainability‐oriented innovation (SOI), yet empirical understanding of the systemic conditions under which SOI enables CE remains underdeveloped. This study addresses the gap by offering a novel, context‐specific analysis of how consumer behaviour and institutional quality shape the effectiveness of SOI in a high‐consumption, developed economy context. Drawing on survey data from 280 UK‐based textile and clothing firms and employing rigorous partial least squares‐structural equation modelling (PLS‐SEM), this study provides robust evidence that SOI has a significant positive influence on circular economy transitions (CET). However, this effect is contingent: it is strengthened by consumer willingness to buy and weakened by institutional voids. Notably, regulatory compliance, often assumed to drive sustainability, does not significantly moderate the relationship between the SOI and CET. These findings challenge linear models of innovation diffusion and reinforce a more relational, system‐aware understanding of circular transitions. The study makes an original theoretical contribution by modelling SOI as a second‐order construct and CET as a multidimensional outcome. It offers actionable insights for firms and policymakers by exposing the limitations of compliance‐led strategies and calling for more integrated, behaviourally informed approaches to managing innovation for sustainability.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"25 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145920495","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Faisal Rasool, Marco Greco, Maria Chiara Di Guardo
Circular economy (CE) has become a crucial paradigm in sustainable business models, driving the shift from linear processes to closed‐loop systems. While CE practices focus on sustainability by eliminating waste and reusing resources, their role in fostering collaboration between firms and driving the adoption of digital technologies remains underexplored. Through qualitative analysis of expert interviews across various industries, this research uncovers how CE activities catalyse resource‐sharing, joint ventures and strategic alliances. Additionally, it is reported that integrating digital tools is crucial for the successful implementation of CE. Finally, the study reveals that regulations can both facilitate and hinder the adoption of CE practice, presenting a critical insight for policymakers. As a result, the findings highlight a synergistic relationship between CE practices, collaboration and digitalisation, providing valuable insights for firms, academia and policymakers aiming to achieve sustainability and improve firm performance through CE initiatives.
{"title":"How Do Circular Economy Practices Drive Interfirm Collaboration and Digitalisation?","authors":"Faisal Rasool, Marco Greco, Maria Chiara Di Guardo","doi":"10.1002/bse.70527","DOIUrl":"https://doi.org/10.1002/bse.70527","url":null,"abstract":"Circular economy (CE) has become a crucial paradigm in sustainable business models, driving the shift from linear processes to closed‐loop systems. While CE practices focus on sustainability by eliminating waste and reusing resources, their role in fostering collaboration between firms and driving the adoption of digital technologies remains underexplored. Through qualitative analysis of expert interviews across various industries, this research uncovers how CE activities catalyse resource‐sharing, joint ventures and strategic alliances. Additionally, it is reported that integrating digital tools is crucial for the successful implementation of CE. Finally, the study reveals that regulations can both facilitate and hinder the adoption of CE practice, presenting a critical insight for policymakers. As a result, the findings highlight a synergistic relationship between CE practices, collaboration and digitalisation, providing valuable insights for firms, academia and policymakers aiming to achieve sustainability and improve firm performance through CE initiatives.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"26 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145937529","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
David Flore, Corinna Vera Hedwig Schmidt, Steffen Strese
Environmentally oriented ventures pursue a dual mission: to create both environmental and financial value. This dual mission adds complexity and can influence ventures' funding prospects, as investors mostly pursue financial motivations. However, the environmental entrepreneurship literature is undecided on whether this relationship is positive or negative, with the latter view prevailing. We draw on signaling theory and analyze our model using a large dataset comprising 5020 unique ventures based in the United States and Europe, along with information on their investors. We find support for the minority view showing a positive relationship between venture‐initiated signals of environmental orientation and venture funding. Two contextual factors, investor environmental orientation and country‐level emissions, enhance this positive relationship. We contribute to signaling theory and environmental entrepreneurship literature.
{"title":"Venture Funding: Signals of Environmental Orientation and Their Interplay With Investor‐ and Country‐Level Characteristics","authors":"David Flore, Corinna Vera Hedwig Schmidt, Steffen Strese","doi":"10.1002/bse.70529","DOIUrl":"https://doi.org/10.1002/bse.70529","url":null,"abstract":"Environmentally oriented ventures pursue a dual mission: to create both environmental and financial value. This dual mission adds complexity and can influence ventures' funding prospects, as investors mostly pursue financial motivations. However, the environmental entrepreneurship literature is undecided on whether this relationship is positive or negative, with the latter view prevailing. We draw on signaling theory and analyze our model using a large dataset comprising 5020 unique ventures based in the United States and Europe, along with information on their investors. We find support for the minority view showing a positive relationship between venture‐initiated signals of environmental orientation and venture funding. Two contextual factors, investor environmental orientation and country‐level emissions, enhance this positive relationship. We contribute to signaling theory and environmental entrepreneurship literature.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"41 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145908090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Julia Martínez‐Cabrera, Merlin Schirmer, Francisco López‐del‐Pino
This study addresses circular solution business model patterns (CSBMPs) as vital elements for transitioning businesses to a circular economy ( CE ), providing a systematic classification of CSBMPs and contextualising them through start‐up cases. Twenty‐one CSBMPs are consolidated via a systematic literature review. Subsequently, a qualitative analysis of 692 circular start‐up cases confirms the previously identified CSBMPs and reveals four additional and underexplored CSBMPs: excess inventory management , material composition transparency , incentivising circular consumer behaviour and responsible offsetting . These 25 CSBMPs are presented in the Alexandrian form to clearly define the problem–solution pair of each pattern. The findings contribute to the understanding of dynamic capabilities and their microfoundations in the context of CE , shedding light on the potential of CSBMPs to contribute to sensing, seizing and reconfiguring capabilities. By mapping CSBMPs to the business model canvas and to circular start‐up archetypes, the research provides practical insights for companies to leverage these patterns in CBMI processes.
{"title":"Bridging Theory and Practice: Circular Solution Business Model Patterns From Literature and Start‐Up Cases","authors":"Julia Martínez‐Cabrera, Merlin Schirmer, Francisco López‐del‐Pino","doi":"10.1002/bse.70424","DOIUrl":"https://doi.org/10.1002/bse.70424","url":null,"abstract":"This study addresses circular solution business model patterns (CSBMPs) as vital elements for transitioning businesses to a circular economy ( <jats:sc>CE</jats:sc> ), providing a systematic classification of CSBMPs and contextualising them through start‐up cases. Twenty‐one CSBMPs are consolidated via a systematic literature review. Subsequently, a qualitative analysis of 692 circular start‐up cases confirms the previously identified CSBMPs and reveals four additional and underexplored CSBMPs: <jats:italic>excess inventory management</jats:italic> , <jats:italic>material composition transparency</jats:italic> , <jats:italic>incentivising circular consumer behaviour</jats:italic> and <jats:italic>responsible offsetting</jats:italic> . These 25 CSBMPs are presented in the Alexandrian form to clearly define the problem–solution pair of each pattern. The findings contribute to the understanding of dynamic capabilities and their microfoundations in the context of <jats:sc>CE</jats:sc> , shedding light on the potential of CSBMPs to contribute to sensing, seizing and reconfiguring capabilities. By mapping CSBMPs to the business model canvas and to circular start‐up archetypes, the research provides practical insights for companies to leverage these patterns in CBMI processes.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"125 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145908093","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Fabio Rizzato, Simona Fiandrino, Alberto Tonelli, Giorgia La Barbera
This study assesses the degree of alignment with and eligibility to the EU Taxonomy of non‐financial firms and investigates its relationship with their Cost of Debt (CoD). The empirical analysis is based on a sample of 306 non‐financial firms listed on the Stoxx Europe 600 Index across 15 European countries. Taxonomy‐related data were manually collected from firms' 2023 annual reports to develop novel EU Taxonomy‐weighted indices capturing both alignment and eligibility across Turnover, capital expenditure (CapEx), and operational expenditure (OpEx). Results reveal that, on average, firms align only a limited portion of their economic activities with the EU Taxonomy's requirements. Initiatives implementing the EU Taxonomy have primarily concentrated on climate change mitigation, while progress on adaptation and other environmental objectives has remained considerably limited. The findings also show that firms with a higher proportion of the EU Taxonomy‐aligned Turnover benefit from lower borrowing costs, suggesting that financial markets perceive these firms as less risky and more transition‐ready.
{"title":"Climate Change Mitigation Takes the Lead: EU Taxonomy‐Aligned and Eligible Activities in Relation to Debt Financing","authors":"Fabio Rizzato, Simona Fiandrino, Alberto Tonelli, Giorgia La Barbera","doi":"10.1002/bse.70493","DOIUrl":"https://doi.org/10.1002/bse.70493","url":null,"abstract":"This study assesses the degree of alignment with and eligibility to the EU Taxonomy of non‐financial firms and investigates its relationship with their Cost of Debt (CoD). The empirical analysis is based on a sample of 306 non‐financial firms listed on the Stoxx Europe 600 Index across 15 European countries. Taxonomy‐related data were manually collected from firms' 2023 annual reports to develop novel EU Taxonomy‐weighted indices capturing both alignment and eligibility across Turnover, capital expenditure (CapEx), and operational expenditure (OpEx). Results reveal that, on average, firms align only a limited portion of their economic activities with the EU Taxonomy's requirements. Initiatives implementing the EU Taxonomy have primarily concentrated on climate change mitigation, while progress on adaptation and other environmental objectives has remained considerably limited. The findings also show that firms with a higher proportion of the EU Taxonomy‐aligned Turnover benefit from lower borrowing costs, suggesting that financial markets perceive these firms as less risky and more transition‐ready.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"44 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145908091","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Laura Michelini, Elena Rinallo, Massimiliano Scopelliti, Alessia Pisoni
Food‐sharing platforms are nowadays recognised as a powerful tool to increase food saving. However, little is known about the key determinants fostering its usage. We propose testing the psychosocial determinants of food‐sharing app usage and its impact on post consumption behaviour by combining the technology acceptance model (TAM) with the theory of planned behaviour (TPB). A survey was conducted involving 1077 participants from Gen Z. By adopting covariance‐based structural equation modeling, the findings support all the hypotheses proposed within TPB. Contrary to our prediction, we found that food‐sharing app usage is positively associated with food waste behaviours. This unexpected result suggests a rebound effect, whereby the more frequently the app is used, the greater the amount of food wasted. This paradoxical dynamic opens up important theoretical implications, which challenge the assumption that food‐sharing platforms and prosocial behaviours always lead to desirable environmental outcomes. It calls for a more nuanced understanding of the interplay between app usage and negative spillovers, particularly in the context of sustainability‐oriented digital platforms, which may ultimately result in a rebound effect. From a managerial perspective, the study provides insights for improving the design of food‐sharing platforms, emphasising the importance of not only facilitating access to surplus food but also fostering responsible consumption behaviours.
{"title":"Reducing Food Waste Through Sharing Platforms: Unveiling the Rebound Effect","authors":"Laura Michelini, Elena Rinallo, Massimiliano Scopelliti, Alessia Pisoni","doi":"10.1002/bse.70501","DOIUrl":"https://doi.org/10.1002/bse.70501","url":null,"abstract":"Food‐sharing platforms are nowadays recognised as a powerful tool to increase food saving. However, little is known about the key determinants fostering its usage. We propose testing the psychosocial determinants of food‐sharing app usage and its impact on post consumption behaviour by combining the technology acceptance model (TAM) with the theory of planned behaviour (TPB). A survey was conducted involving 1077 participants from Gen Z. By adopting covariance‐based structural equation modeling, the findings support all the hypotheses proposed within TPB. Contrary to our prediction, we found that food‐sharing app usage is positively associated with food waste behaviours. This unexpected result suggests a rebound effect, whereby the more frequently the app is used, the greater the amount of food wasted. This paradoxical dynamic opens up important theoretical implications, which challenge the assumption that food‐sharing platforms and prosocial behaviours always lead to desirable environmental outcomes. It calls for a more nuanced understanding of the interplay between app usage and negative spillovers, particularly in the context of sustainability‐oriented digital platforms, which may ultimately result in a rebound effect. From a managerial perspective, the study provides insights for improving the design of food‐sharing platforms, emphasising the importance of not only facilitating access to surplus food but also fostering responsible consumption behaviours.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"11 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145908092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Shamaila Ishaq, Umair Tanveer, Thinh Gia Hoang, Stefan Seuring
The transition to a circular economy (CE) remains hindered by the lack of practical strategies that simultaneously secure competitiveness and deliver sustainability outcomes for manufacturing organisations. While circular design is often cited as a cornerstone of CE, its concrete role in driving competitive advantage and organisational transformation remains underexplored. This research examines the crucial role of circular design strategies in enhancing competitiveness and facilitating the transition to a CE within manufacturing organisations. Drawing on 42 in‐depth, semi‐structured interviews across eight leading sustainability‐focused manufacturing enterprises, this study sheds light on the practical implications and theoretical underpinnings of circular design strategies. The findings emphasise the potential of circular design strategies, including reconditioning, modularity, adaptability, standardisation and commonality, to disrupt markets, drive continuous innovation, enhance risk management and prioritise customer‐centric approaches, ultimately enhancing business competitiveness. Simultaneously, these strategies contribute to the circular transition by promoting resource efficiency, cost savings, circular supply chain transformation and waste reduction. This research contributes to practice by highlighting the practical relevance of circular design strategies in achieving sustainability, resilience and competitiveness in the manufacturing sector. Moreover, it enriches the theoretical landscape by elucidating the intricate interplay between circular design strategies, circularity and competitive advantage, offering comprehensive insights into their mutual influence. Ultimately, this study highlights the transformative potential of circular design strategies in shaping sustainable business futures.
{"title":"Circular Design Strategies Unleashed: Competitiveness and the Journey Towards Circular Manufacturing Businesses","authors":"Shamaila Ishaq, Umair Tanveer, Thinh Gia Hoang, Stefan Seuring","doi":"10.1002/bse.70512","DOIUrl":"https://doi.org/10.1002/bse.70512","url":null,"abstract":"The transition to a circular economy (CE) remains hindered by the lack of practical strategies that simultaneously secure competitiveness and deliver sustainability outcomes for manufacturing organisations. While circular design is often cited as a cornerstone of CE, its concrete role in driving competitive advantage and organisational transformation remains underexplored. This research examines the crucial role of circular design strategies in enhancing competitiveness and facilitating the transition to a CE within manufacturing organisations. Drawing on 42 in‐depth, semi‐structured interviews across eight leading sustainability‐focused manufacturing enterprises, this study sheds light on the practical implications and theoretical underpinnings of circular design strategies. The findings emphasise the potential of circular design strategies, including reconditioning, modularity, adaptability, standardisation and commonality, to disrupt markets, drive continuous innovation, enhance risk management and prioritise customer‐centric approaches, ultimately enhancing business competitiveness. Simultaneously, these strategies contribute to the circular transition by promoting resource efficiency, cost savings, circular supply chain transformation and waste reduction. This research contributes to practice by highlighting the practical relevance of circular design strategies in achieving sustainability, resilience and competitiveness in the manufacturing sector. Moreover, it enriches the theoretical landscape by elucidating the intricate interplay between circular design strategies, circularity and competitive advantage, offering comprehensive insights into their mutual influence. Ultimately, this study highlights the transformative potential of circular design strategies in shaping sustainable business futures.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"125 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145908089","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Amid growing calls for sustainability in the healthcare sector, this study examines how and under what conditions environmental, social, and governance (ESG) performance influences research and development (R&D) output. Although existing studies suggest that ESG performance enhances R&D output, the financial mechanisms that enable or constrain this relationship remain underexplored. We address this gap by theorizing and testing the dual role of debt financing as both a mediator and a moderator in the ESG performance and R&D output relationship within the healthcare sector, where innovation is highly capital‐intensive and socially consequential. Integrating stakeholder theory and agency theory, we argue that ESG performance promotes R&D output through improved access to reputational and financial resources, whereas high debt levels weaken this effect due to agency conflicts. Using panel data from 2016 to 2022 on healthcare firms in Europe and the United States, we estimate our main models using OLS and applying instrumental variable and system GMM techniques as robustness checks to address endogeneity. Our findings show that debt financing partially mediates the ESG–R&D link and negatively moderates it, revealing its ambivalent role. Compared to existing studies, our findings indicate that the effects of ESG performance on R&D output are conditional and context specific, with stronger impacts observed in Europe than in the United States, reflecting institutional conditions such as stricter European Union sustainability reporting frameworks, notably the Corporate Sustainability Reporting Directive (CSRD), along with robust policy incentives and longer term investment horizons. We also find pronounced effects in the biotechnology and pharmaceutical subsectors. This study contributes to theory by bridging competing views on ESG performance and offering a more nuanced understanding of how debt financing shapes the ESG–R&D output relationship.
{"title":"ESG Performance, Debt Financing, and R&D Output: Evidence From the Healthcare Sector","authors":"Sarmad Ali, Oriana Ciani, Simone Ghislandi","doi":"10.1002/bse.70522","DOIUrl":"https://doi.org/10.1002/bse.70522","url":null,"abstract":"Amid growing calls for sustainability in the healthcare sector, this study examines how and under what conditions environmental, social, and governance (ESG) performance influences research and development (R&D) output. Although existing studies suggest that ESG performance enhances R&D output, the financial mechanisms that enable or constrain this relationship remain underexplored. We address this gap by theorizing and testing the dual role of debt financing as both a mediator and a moderator in the ESG performance and R&D output relationship within the healthcare sector, where innovation is highly capital‐intensive and socially consequential. Integrating stakeholder theory and agency theory, we argue that ESG performance promotes R&D output through improved access to reputational and financial resources, whereas high debt levels weaken this effect due to agency conflicts. Using panel data from 2016 to 2022 on healthcare firms in Europe and the United States, we estimate our main models using OLS and applying instrumental variable and system GMM techniques as robustness checks to address endogeneity. Our findings show that debt financing partially mediates the ESG–R&D link and negatively moderates it, revealing its ambivalent role. Compared to existing studies, our findings indicate that the effects of ESG performance on R&D output are conditional and context specific, with stronger impacts observed in Europe than in the United States, reflecting institutional conditions such as stricter European Union sustainability reporting frameworks, notably the Corporate Sustainability Reporting Directive (CSRD), along with robust policy incentives and longer term investment horizons. We also find pronounced effects in the biotechnology and pharmaceutical subsectors. This study contributes to theory by bridging competing views on ESG performance and offering a more nuanced understanding of how debt financing shapes the ESG–R&D output relationship.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"77 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145902434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Min‐Jae Lee, Anna Pak, Donghwi (Josh) Seo, Taewoo Roh
As firms increasingly incorporate environmental, social, and governance (ESG) concerns into their strategic agendas, stakeholder legitimacy—an audience‐conferred judgment of organizational appropriateness—has become pivotal. We theorize legitimacy as expanding a hybrid response portfolio in which firms may pursue substantive change (business model innovation [BMI]) alongside symbolic communication that can become ESG washing when disproportionate to operations. Integrating legitimacy, institutional, and signaling perspectives, we argue that institutional pressures allocate effort across these responses rather than forcing an either–or choice. Using a two‐wave survey of South Korean firms ( N = 478), we find that legitimacy generally promotes BMI and deters ESG washing. Regulatory pressure strengthens the legitimacy—BMI link and amplifies the deterrent effect of legitimacy on washing, while normative pressure attenuates both relationships, consistent with a shift toward symbolic compliance. These findings highlight the ethical ambivalence of legitimacy and demonstrate how institutional context shapes ESG behavior. The study contributes to corporate responsibility literature by clarifying when legitimacy drives innovation versus deception and by bridging signaling, legitimacy, and institutional perspectives. We also offer implications for managers balancing ethical responsibility with signaling and for policymakers designing regulations to curb ESG washing.
{"title":"Navigating the ESG Paradox: Strategic Pathways Between Innovation and Washing Under Stakeholder Scrutiny","authors":"Min‐Jae Lee, Anna Pak, Donghwi (Josh) Seo, Taewoo Roh","doi":"10.1002/bse.70525","DOIUrl":"https://doi.org/10.1002/bse.70525","url":null,"abstract":"As firms increasingly incorporate environmental, social, and governance (ESG) concerns into their strategic agendas, stakeholder legitimacy—an audience‐conferred judgment of organizational appropriateness—has become pivotal. We theorize legitimacy as expanding a hybrid response portfolio in which firms may pursue substantive change (business model innovation [BMI]) alongside symbolic communication that can become ESG washing when disproportionate to operations. Integrating legitimacy, institutional, and signaling perspectives, we argue that institutional pressures allocate effort across these responses rather than forcing an either–or choice. Using a two‐wave survey of South Korean firms ( <jats:italic>N</jats:italic> = 478), we find that legitimacy generally promotes BMI and deters ESG washing. Regulatory pressure strengthens the legitimacy—BMI link and amplifies the deterrent effect of legitimacy on washing, while normative pressure attenuates both relationships, consistent with a shift toward symbolic compliance. These findings highlight the ethical ambivalence of legitimacy and demonstrate how institutional context shapes ESG behavior. The study contributes to corporate responsibility literature by clarifying when legitimacy drives innovation versus deception and by bridging signaling, legitimacy, and institutional perspectives. We also offer implications for managers balancing ethical responsibility with signaling and for policymakers designing regulations to curb ESG washing.","PeriodicalId":9518,"journal":{"name":"Business Strategy and The Environment","volume":"381 1","pages":""},"PeriodicalIF":13.4,"publicationDate":"2026-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145902431","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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