Chapter 4 concludes the book, showing how dynamic simulation can frame sustainability reporting not as a mere compliance disclosure but as a strategic lever for change. It begins by illustrating the dynamics of the Base run, a scenario in which companies adopt reactive strategies and opportunistic communication practices to preserve business-as-usual routines. In this context, misalignments between internal and external reporting purposes foster greenwashing practices aimed at quickly achieving legitimacy; however, this locks companies into a scepticism trap that hinders future sustainability transition. To overcome these undesirable dynamics, a sensitivity analysis identifies the system’s leverage points, signalling spaces for managerial intervention. The first concerns resource allocation, demonstrating the effectiveness of proactive investments; the second shows that excluding greenwashing may expose the company to initial pressures, but in the long term, it outperforms competitors; finally, integrating materiality into decision-making enables rapid recognition of sustainability issues and drives profound changes, regardless of whether an impact, financial, or double materiality approach is adopted. These findings open new spaces for theoretical reflection, managerial applications, and future opportunities, including the revision of performance management systems to encompass all dimensions of sustainability reporting.

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Revisiting Sustainability Reporting Through System Dynamics

  • Riccardo Santoni

摘要

Chapter 4 concludes the book, showing how dynamic simulation can frame sustainability reporting not as a mere compliance disclosure but as a strategic lever for change. It begins by illustrating the dynamics of the Base run, a scenario in which companies adopt reactive strategies and opportunistic communication practices to preserve business-as-usual routines. In this context, misalignments between internal and external reporting purposes foster greenwashing practices aimed at quickly achieving legitimacy; however, this locks companies into a scepticism trap that hinders future sustainability transition. To overcome these undesirable dynamics, a sensitivity analysis identifies the system’s leverage points, signalling spaces for managerial intervention. The first concerns resource allocation, demonstrating the effectiveness of proactive investments; the second shows that excluding greenwashing may expose the company to initial pressures, but in the long term, it outperforms competitors; finally, integrating materiality into decision-making enables rapid recognition of sustainability issues and drives profound changes, regardless of whether an impact, financial, or double materiality approach is adopted. These findings open new spaces for theoretical reflection, managerial applications, and future opportunities, including the revision of performance management systems to encompass all dimensions of sustainability reporting.