Abstract
Bellandi (20212022) has developed a matrix to assess the consistency between sustainable financial growth and sustainable ESG (Environmental, Social, and Governance, hereafter ESG) growth, and how this may impact shareholders versus other stakeholders. This article further builds on that matrix, to link the product life cycle approach and the BCG matrix to the sales growth axis of the matrix and determine both the actual revenue growth and the financially sustainable revenue growth associated to each stage of a product life cycle and each quadrant of the BCG matrix. The article also illustrates how the Life Cycle Assessment methodology can be linked to the product life cycle model, and better quantify the ESG impact of each product life cycle stage on the ESG axis of the financially-ESG sustainable growth matrix. The article shows how the reading of both product life cycle and BCG matrix can be expanded from a proprietory (shareholders) to a societal (other stakeholders) perspective. This opens a new direction of research to evidence alternative ESG improvements in each stage of the life cycle model that may make a product more ESG compliant, therefore suggesting strategies to improve the ESG rating of a business or a company. This article is also a methodological step forward to create an index of ESG sustainable growth, which is currently missing.
Highlights
Bellandi (2022) has developed a matrix to assess the consistency between sustainable financial growth and sustainable ESG growth, and how this may impact shareholders versus other stakeholders
As financial sustainable growth depends on profitability, investments, and net cash flows, and management studies have discussed these features in relation to the product life cycle and the BCG matrix, a linkage may be established between these two models and financial sustainable growth, which is an inherent feature of the financially-ESG sustainable growth matrix
If it does move to the development stage in the product life cycle model and the company does acquire a strong relative market share, it would naturally position itself in the “stars” quadrant
Summary
Bellandi (2022) has developed a matrix to assess the consistency between sustainable financial growth and sustainable ESG growth, and how this may impact shareholders versus other stakeholders. If ESG factors are less than sustainable, financial growth is at the expense of stakeholders other than shareholders. If ESG factors are more than sustainable, additional financially sustainable growth that is not pursued is an unfulfilled potential for other stakeholders. Quadrant 1 indicates situations where a company grows more than financially sustainable but ESG is lower than average as compared to the industry peers. Companies in Quadrant 2 are ESG laggard that grow slower than financially sustainable. ESG growth constrains financial growth: if company grows more, other stakeholders subsidize shareholders. Financial growth constrains ESG growth: shareholders subsidize other stakeholders, or there is a potential for financial re-engineering
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