Facing a global crisis - how sustainable business models helped firms overcome COVID

Abstract

Purpose The purpose of this study is to analyse how implementation of corporate social responsibility (CSR) policies following United Nations’ Global Compact (UNGC) guidelines can contribute to firm’s performance during a global crisis, such as the case of COVID-19. Based on the triple bottom line theoretical framework, this work explores the relation between the creation of value and sustainable business models with long-term strategies and strong policy commitments, and their performance in the stock market years later during a crisis. By doing so, new insights on strategic management to create value and consolidate sustainable business models are provided.

Design/methodology/approach The present study analyses firms within the context of the European Union, considering the involvement of the region in achieving sustainable development. In particular, the long-term impact in the usage of the UNGC management model and the firm's sustainability performance based on the results during COVID-19 crisis. To achieve this goal, energy firms operating in Spain and subscribing to UNGC were evaluated, specifically those publicly listed in the IBEX35, benchmark index of Spain's Stock Market Interconnection System. In addition, firms were also considered regarding the strong impact within their industries not only nationally but also worldwide.

Findings Findings show long-term CSR strategies and a strong commitment to sustainable development contribute to firm’s overcoming periods of economic crisis. In addition, considering the environmental impact of the firms’ actions, transition to sustainable business and widening portfolio in the case of energy firms proved to have a positive impact in overcoming a hard context such as COVID-19. The virtuous cycle can be created by honouring the social contract, yet the tools and management models shall be further tailored to ensure an effective win-win situation.

Originality/value This study evaluates a company's strategic involvement in sustainability, considering the UNGC 10 principles and SDG and the effects of these strategies in the long-term. Specifically, the role of UNGC management model is evaluated in designing effective policies that can help firms better overcome a context of crisis such as COVID-19. Consequently, researchers studying business strategy can incorporate the findings in strategic planning. Practitioners can learn the implications of CSR strategic planning in the long-term. Moreover, work illustrates corporate results in sustainability matters after the first decade of the UNGC management model and the impact of a crisis context.