Strategising Corporate Sustainability: Preventative Measures Could Harm Company Performance. A quantitative study on how different motivations relate to sustainability and financial performance.

Sammanfattning: An increasing body of research shows interest in the relationship between sustainability- and financial performance. This study draws upon regulatory focus theory to analyse how variations in the underlying motivations of sustainability strategy relate to future performance. The theory suggests that decisions are made using either a promotion or prevention focus. Promotion seeks advancement and is concerned with maximising gains. In contrast, prevention seeks safety and is concerned with minimising losses. The study advances the research on sustainability- and financial performance by testing their respective relationship with regulatory focus. The testing is done through Linguistic Inquiry and Word Count, a software which is applied to analyse the levels of promotion and prevention focus in sustainability reports. These levels are used to examine whether a promotion or prevention focus can predict ESG-score and the financial performance measure ROA. Findings indicate that the regulatory focus can impact both the sustainability and the financial performance of a company.