Integrating Environmental, Social and Governance Factors into Strategic Management: A Comparative Case Study of Unilever and Neste.
Dang Khanh, Giang (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024060219723
https://urn.fi/URN:NBN:fi:amk-2024060219723
Tiivistelmä
This thesis explores how integrating environmental, social and governance (ESG) considerations into strategic management, finance and corporate governance impacts organizational performance. A comprehensive literature review examines existing frameworks for ESG integration and evaluates empirical research on relationships between ESG, strategy and financial metrics.
To investigate in-depth, a comparative case study analysis is conducted of Unilever and Neste, two multinational companies lauded as leaders in progressive ESG management. Utilizing qualitative data sources such as annual/sustainability reports and financial statements from 2016-2022, along with supplementary interviews, the research evaluates the level and systematic approach to ESG integration employed by each firm.
Quantitative analysis of financial performance indicators over this period aims to identify associations with the degree of embedding responsible practices.
The study findings indicate that Neste, which adopted a more holistic model aligning environmental and social priorities with core business strategy, achieved superior risk-adjusted financial returns compared to Unilever and industry averages. Clear positive correlations emerge between higher levels of comprehensive ESG integration and enhanced profitability. Adherence to established guidelines like the UN Global Compact and GRI Standards is identified as enabling more robust incorporation of material sustainability factors.
This thesis contributes novel evidence on implementing integrated governance models to create competitive advantages through sustainable development. Conceptual frameworks are proposed for optimizing coordination of ESG issues across strategic planning, financial processes, and corporate oversight mechanisms. Practical recommendations are provided for businesses and policymakers to further catalyze the strategic management of environmental, social and governance performance in pursuit of long-term value
creation.
To investigate in-depth, a comparative case study analysis is conducted of Unilever and Neste, two multinational companies lauded as leaders in progressive ESG management. Utilizing qualitative data sources such as annual/sustainability reports and financial statements from 2016-2022, along with supplementary interviews, the research evaluates the level and systematic approach to ESG integration employed by each firm.
Quantitative analysis of financial performance indicators over this period aims to identify associations with the degree of embedding responsible practices.
The study findings indicate that Neste, which adopted a more holistic model aligning environmental and social priorities with core business strategy, achieved superior risk-adjusted financial returns compared to Unilever and industry averages. Clear positive correlations emerge between higher levels of comprehensive ESG integration and enhanced profitability. Adherence to established guidelines like the UN Global Compact and GRI Standards is identified as enabling more robust incorporation of material sustainability factors.
This thesis contributes novel evidence on implementing integrated governance models to create competitive advantages through sustainable development. Conceptual frameworks are proposed for optimizing coordination of ESG issues across strategic planning, financial processes, and corporate oversight mechanisms. Practical recommendations are provided for businesses and policymakers to further catalyze the strategic management of environmental, social and governance performance in pursuit of long-term value
creation.