Analyzing the Link Between ESG Initiatives and Shareholder Value Creation Through the Value Chain Lens: A Qualitative Approach

This chapter investigates how ESG initiatives contribute to value creation and adopts a framework, inspired by the strategic cost management approach, to trace value chain activities and the drivers of these and to discover how these could contribute to sustaining an organization’s strategy and, thereafter, contribute to its value creation. Within the strategy and activities, the focus is on the ESG initiatives and their integration into the organization’s competitive strategy. The adopted research method combines the case studies and the conceptual arguments that we elaborated. The findings suggest that when ESG initiatives are integrated into the competitive strategy, the company is primarily focused on achieving these ESG goals. Consequently, the financial results’ impact is long-term oriented, while the increase in costs and investments might, conversely, decrease the financial results in the short term. On the other hand, when the ESG initiative is not integrated into the competitive strategy, but runs parallel to the strategy, this means that the organization is devoted to sustaining its ESG activities but that this could have a direct and short-term impact on its financial results.