Managing Social, Environmental and Financial Performance Simultaneously

The significant challenge of trying to simultaneously manage social, environmental and financial performance is one of the most critical challenges in the field of corporate sustainability. This paper explores how large, complex, for-profit organizations are actually integrating this challenge into decision-making and implementing sustainability. Based on field research with interviews at Nike, Procter & Gamble, The Home Depot and Nissan North America, the study specifically investigates how managers at various levels are making the trade-offs and simultaneously managing social, environmental and financial performance. We find that, while the companies' informal systems strongly promote sustainability, their formal systems seemingly have a very traditional focus on financial performance. But, the managers operating under these paradoxical systems do not believe these systems to be in conflict, and they do not perceive a high level of tension. They recognize the financial value of stakeholder reactions to social and environmental performance, and this minimizes the magnitude of the loss in a “win-lose” scenario, or, when the value of these impacts exceeds the cost of an initiative, turns it into a “win-win” scenario.