The Business Case for Corporate Sustainability: Literature Review and Research Options OLIVER SALZMANN, IMD, Lausanne AILEEN IONESCU-SOMERS, IMD, Lausanne ULRICH STEGER, IMD, Lausanne In the last ten years, the notion of a ‘business case’ for corporate sustainability has increasingly been used by the corporate sector, environmental organi- zations, consultancies and so on, to seek justification for sustainability strategies within organizations. In this paper, we aim to systemize and assess existing research and tools related to this increasingly popu- lar concept. We present a review of (1) theoretical frameworks, (2) instrumental studies aiming to either prove or disprove a hypothesized causal sequence between corporate social or environmental performance and financial performance, (3) descrip- tive studies examining manager’s actual perceptions and practices, and finally (4) tools. We identify a clearly insufficient understanding of manager’s key arguments or business logic for adopting corpo- rate sustainability strategies (how ‘business cases’ are built, how effective they are and what barriers they face). We attribute this primarily to lack of descriptive research in these areas. Ó 2005 Published by Elsevier Ltd. Keywords: Corporate sustainability, Business in society, Environmental performance, Financial performance, Corporate social responsibility Introduction The business case is not a generic argument that corporate sustainability strategies are the right choice for all compa- nies in all situations, but rather something that must be carefully honed to the specific circumstances of individual companies operating in unique positions within distinct industries. Successes in whole industries and at other com- panies are useful examples, but the case still has to be applied to one company at a time (Reed, 2001, p. 4). The role of business in society has been a concern both of scholars and practitioners for a long time. As early as the 1960s, advocates of corporate social responsibility (CSR) put forward pragmatic argu- ments that pursuing such a route would limit regula- tion, as well as improving reputation and employee recruitment and retention (Davis, 1960; Whetten et al., 2002; Wren, 1979). According to Freeman’s stakeholder theory, corpora- tions have responsibilities to their shareholders and other interest groups (Freeman, 1984). Although there is disagreement over the relative importance of these ‘‘stakes’’, theorists agree that respect for is- sues other than economic ones is necessary. How- ever, what is the financial payoff? The business case for sustainability (BCS) has been approached in many different ways to prove or disprove the sound economic rationale for corporate sustainability management that shall be defined as ‘‘a strategic and profit-driven corporate response to environmental and social issues caused through the organization’s primary and secondary activities’’ (Salzmann, forth- coming). Since the beginning of the 1990s, the BCS European Management Journal Vol. 23, No. 1, pp. 27–36, February 2005 27 doi:10.1016/j.emj.2004.12.007 European Management Journal Vol. 23, No. 1, pp. 27–36, 2005 Ó 2005 Published by Elsevier Ltd. Printed in Great Britain 0263-2373 $30.00