Why Do Businesses Go Green?

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Nowadays The idea of sustainability is becoming more and more popular, though it is still developing. The role that sustainability plays in the corporate world is being evaluated from a variety of perspectives and ideologies, some of which can be at odds with one another. This work assumes a managerial perspective that focuses on advantages and disadvantages and begins with the question, “Why do companies go green?” It then conducts an analysis of papers dealing with trade-offs in sustainability adoption, aiming to provide a thorough view of the key issues identified by the theory. To test the idea empirically, a final confrontation with the data from a sample of automotive companies’ SEC filings is made.

The term “sustainability” has grown in prominence over the past few years in the corporate world. However, there is still debate over what being sustainable means for a business and, perhaps more crucially, what the repercussions are. There has been a great deal of thought generated on the various facets of sustainability, including questions about whether or not businesses should feel accountable for their social and environmental impact, how sustainability should be implemented, and what the ramifications of going green are.

This study focuses on this final element and makes an effort to comprehend the business case for adopting sustainability while outlining the challenges and opportunities a company will encounter in addressing the issue. The employment of theory, however, often tends to be generic, losing the potential to offer deeper operational indications, in order to be adaptable to diverse sectors and gather the entire dynamics. Starting with a broad overview of the key sustainability ideas, this study will explore theoretical papers before contrasting them with comparatively objective evidence obtained by evaluating official reports that give hints concerning business purposeful strategies. All of the companies examined belong to the same sector in order to create a meaningful sample for the analysis.

The purpose of this comparison is to evaluate how well theory can account for reality and offer practical insights.
Conclusions show a partial separation between theory and corporate evidence, both in terms of the aspects highlighted and descriptive power. Additionally, there are notable variations between the deliberate techniques employed by the companies under consideration.