Abstract
Investment decision-making based on aspects of sustainability is gaining importance among organizations around the globe. In this context, there is a need for quality investment decisions, which require sufficient knowledge among organizational managers about managing sustainability information to achieve environmental objectives that meet stakeholder expectations. This has led to the emergence of organizational performance measuring tools such as the Sustainability Balanced Scorecard, which integrates the environmental perspective into the traditional Balanced Scorecard. Using experimental research method, the objective of this study is to investigate the indirect effect of Eco-efficiency knowledge and Sustainability Balanced Scorecard knowledge as mediators influencing the relationship between Sustainability Balanced Scorecard types and their impact on environmental investment decision-making. Findings of the current research are based on 60 respondents who were randomly assigned to one of the following two types of Sustainability Balanced Scorecard architecture: (1) environmental data embedded within the traditional Balanced Scorecard perspectives; and (2) standalone environmental data as an additional fifth perspective along with the traditional Balanced Scorecard architecture. The traditional Balanced Scorecard without any information on environmental perspective is included in the experiment as the control condition. The findings indicate that the combined effect of eco-efficiency knowledge and Sustainability Balanced Scorecard knowledge has a significant positive influence on the relationship between the Balanced Scorecard type versus Sustainability Balanced Scorecard type and environmental investment decision-making.
Highlights
Environmental decision-makers are struggling mainly with social and political issues, which have arisen due to the views held on how to properly conduct investment decision-making and what the outcomes should be [1]
The c-path in the model includes the direct effect of the Balanced Scorecard (BSC) versus Sustainability Balanced Scorecard (SBSC) on environmental investment decision-making, independent of the effect of the mediators (c1) and the total effect of the BSC versus SBSC on environmental investment decision-making that attempts to achieve environmental objectives (c), which is the sum of the direct effect and the indirect effect via the mediators [49]
The purpose of the current study is to investigate whether eco-efficiency knowledge and SBSC knowledge mediate the relationship between the BSC versus SBSC or the SBSC type (SBSC four-perspective versus five-perspective) and environmental investment decision-making
Summary
Environmental decision-makers are struggling mainly with social and political issues, which have arisen due to the views held on how to properly conduct investment decision-making and what the outcomes should be [1]. A broad consensus has been established that the Sustainability Balanced Scorecard (SBSC) is one of the most effective tools in evaluating potential investments and initiatives by better integration of the environmental, social and economic aspects of corporate sustainability measurement and management [2,3]. SBSC types are generally organized in one of two ways: (a) sustainability data embedded within the four perspectives scorecard; or (b) adding the sustainability perspective as an additional fifth perspective to the scorecard [2]. Debate about SBSC types focuses on whether additional performance perspectives should be used to address sustainability objectives or whether sustainability issues should be integrated into the existing performance perspectives [4,5]. Corporate sustainability is increasingly becoming a knowledge-based practice to improve the quality of sustainable development and environmental investment decision-making [6]. The SBSC was developed to support the corporate sustainability effort, there still exists a lack of clarity on what aspects constitute the SBSC and how to best achieve it [7]
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