A dynamic sustainability Balanced Scorecard methodology as a navigator for exploring the dynamics and complexity of corporate sustainability strategy

Abstract

The majority of recent empirical research regarding corporate environmental literature seeks to identify the potential relationships between environmental management practices and the financial performance of the firms. In addition, another major part of the research concerns the effect of corporate social responsibility practices on corporate financial performance. The majority of these studies focus on the effect of either social or environmental aspects on firms’ economic performance through various statistical techniques in an ex post and static base (at the end of year – annually). To contribute to this literature, this article aims at developing a dynamic sustainability Balance Scorecard methodology to investigate the evolutionary trends of the relationships among environmental, social, and economic performance of firms. The main contribution is the development of an integrated mental model in order to improve managers’ and scholars’ comprehension of corporate sustainability performance. The proposed methodology is mainly based on the corporate environmental and social management literature, system thinking, system dynamics, and Stella software. Some computational examples are also presented based on three scenarios.

Keywords:

• corporate sustainability
• corporate social responsibility
• system dynamics
• Stella software

Disclosure statement

No potential conflict of interest was reported by the authors.