Sustainability, Innovation and Information Technology as Sources of Value Generation

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There is growing consensus in management and economies world-wide that sustainability is a topic of growing importance and material impact to consider. An increasing number of companies are viewing sustainability not only as a challenge of complying with regulatory requirements but also as a business opportunity and a source of competitive advantage. The current financial crisis has helped policy-makers and management alike to focus again on the longevity of business models and the duration of value growth in enterprises and economies. Sustainability requires innovation - e.g., modern technology to move into higher resource efficiency levels - and is therefore considered a source of innovation. Likewise, technological innovation in future will be increasingly sustainability-oriented. However, recent research shows that most companies still struggle when it comes to exploiting the opportunities and mitigating the risks that sustainability presents (Berns et al. 2009). Companies cite a number of obstacles and barriers to embracing sustainability. Foremost, these are limited informational transparency, the absence of a clear business case for sustainability, as well as difficulties in measuring, tracking, and reporting sustainability efforts. This paper suggests and provides evidence that these challenges can be addressed with the use of modern information technology (IT). It introduces IT as a key enabling technology for increasing sustainability while creating economic value. Derived from Rappaport's shareholder value model (Rappaport 1986) and subsequent work on environmental shareholder value by Schaltegger & Figge (2000), also validated with recent examples from companies world-wide the paper identifies leverage points for the use of information technology to improve sustainability performance as well as to increase economic company value. (original abstract)
Original languageEnglish
JournalJournal of Management and Financial Sciences
Issue number5
Pages (from-to)16-35
Number of pages17
Publication statusPublished - 2011