Behavioural Insights in Corporate Sustainability Research: A Review and Future Agenda

Abstract

As a plethora of sustainability challenges are rooted in human behaviour, the aim of this paper is to develop a conceptual framework that brings behavioural insights to the forefront in corporate sustainability research. The ABCD (attention, belief formation, choice, determination) approach, which is meant to assist policy-makers in analysing and diagnosing behavioural problems at an individual level, has been adopted into the corporate context. Taking the ABCD approach, this article discusses the main tenets of the prominent organisational theories, such as upper echelons theory, managerial cognition, stakeholder theory, the attention-based view of the firm, transaction cost theory, institutional theory, social network theory, legitimacy theory and signalling theory, and their application into corporate sustainability (CS) research. The paper offers a series of propositions, alternative to theories of structural determinism or theories of rational strategic choice, for specifying the conditions under which firms are likely to engage in sustainable business conduct. They refer among others to: (a) individual factors—characteristics and mental frames of managers in companies, (b) organisational factors—the composition and size of a board, governance mechanisms in a company, such as role models for sustainability issue selling, or the inclusion in decision making of various stakeholders, as well as (c) external factors—social norms or board connections.