The effect of prior firm performance on substantive emission reduction target operationalization
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2024-07-01
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en
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The thesis examines the relationship between firm performance and the operationalization of environmental goals. Firms set goals based on historical aspirations and performance metrics, which act as reference points for evaluation. Traditionally, performance feedback focuses on financial metrics, but recent trends emphasize environmental and social performance.
We explored how firms respond to environmental performance feedback, which is an important aspect of sustainability. This involves setting goals to achieve better environmental performance outcomes. Unlike financial performance, where minor deviations can significantly impact firm action, environmental goals seem to have different performance feedback mechanisms, as they require longer time horizons and more substantive efforts.
This research investigates how financial and environmental performance related to the operationalization of environmental targets and how these targets impact future environmental performance. We aimed to add to environmental performance feedback theory by incorporating the complexity of environmental goals, ambiguity in social performance metrics, and the strategic implications of goal setting in sustainability. This contributes to understanding how firms operationalize environmental targets within the broader context of strategic management. The results indicate that financial performance has a stronger relation to environmental goal operationalization compared to environmental performance. Providing evidence for the added complexity in environmental performance feedback.
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Faculteit der Managementwetenschappen