Transitioning toward Sustainability: How Corporate Sustainability Strategies Affect Stakeholders' Actions

My research on corporate sustainability is motivated by the big problems we face. While we are facing unprecedented climate change and rising inequality, and still navigating the COVID pandemic, the Russia-Ukraine war has highlighted in heartbreaking ways of the human rights crisis, and extreme political instability. While the governments are not functioning well, I believe businesses can step up and take the lead in solving the world's problems at scale. Over the past decades, organizations are also facing increasing pressures from diverse groups of stakeholders to engage in sustainability practices. Yet, despite growing demands for corporate sustainability and increasing opportunities arising from technological advance and economic growth, such problems persist, and the society's transition toward sustainability appears increasingly precarious. Thus, my ongoing and proposed research examines the important unintended consequences arising from the interaction between stakeholders' reactions to firms' sustainability practices and offers solutions for firms and policy makers to be well prepared and address such unanticipated problems. Specifically, my proposed research includes two main streams and uses two main methods.
The first stream (organization- and industry-level) is quantitative empirical studies using archival data of environmental, social, and governance (ESG) issues of firms globally. My proposed research examines how stakeholders perceive and evaluate firms' ESG strategies, and how firms respond. The insights would shed light on the key factors that drive variation in corporate engagement in ESG practices (i.e., why some firms positively respond and are motivated to be sustainable, while others are not). For instance, one of my dissertation chapters discovers the novel phenomenon that public criticism regarding firms' ESG practices during periods of complexity and uncertainty such as global crises can create divergent path-dependent spirals of firms' responses and reinforce over time after the crsies i.e., some firms race to the top by becoming more sustainability, while others race to the bottom by reducing ESG practices. My proposed research during my postdoctoral fellow aims to answer "why". Specifically, I will empirically examine more deeply about the mechanisms that drive such divergent spirals. For instance, firms that were highly criticized during global crises might face resource constraints and higher costs to invest in ESG as well as risk attacks of greenwashing from ESG investments, and thus they can benefit financially by shifting their resources away from ESG to invest in other strategic activities. Thus, public criticism, which aims to encourage organizational learning and reform, can have unintended effects by creating polarization across firms in our society today.
The second stream (an individual-level) focuses on psychological mechanisms that drive behavioral reactions of individual stakeholders to firms' ESG practices, using field and online experiment methods. My proposed field experiment project is to examine how firms can communicate multiple goals (i.e., financial, puspose, and ESG) to motivate gig workers, and when and under what conditions communicating ESG can backfire i.e., leading to unintended effects such as making employees demotivated and thus lowering performance. I will conduct field experiments at NextOnc, a precision medicine startup (with remote work context) which I co-founded, by recruiting gig workers through online platforms.
The insights from my proposed research will provide important implications to both academia and practice on how to anticipate and overcome such unintended consequences. For instance, my work can inform companies on how to most effectively engage in and communicate ESG practices as well as inform policy makers and regulators on how to scrutinize and work in partnership with firms to accelerate the diffusion of sustainability practices in our society.