Sustainability logics within the business realm: evidence from the European capital market

The purpose of this PhD thesis is to investigate how corporate sustainability (CS) logics are interpreted and implemented in the European business realm, by examining key enabling factors, such as institutional investors’ (IIs) ownership concentration (OC), performance measurement systems, and artificial intelligence (AI) adoption. Through three different empirical studies, this body of work seeks to understand how the aforementioned enablers influence firms’ environmental, social, economic and governance practices, for the ultimate goal of achieving the United Nations Sustainable Development Goals (SDGs). The first manuscript investigates the impact of various forms of institutional ownership on firms’ greenhouse gas (GHG) emission intensity. To this end, this contribution employs a regression analysis with a balanced panel dataset including 4107 observations related to 628 European-listed enterprises, from 2015 up to the business year 2022. The second manuscript employs a qualitative methodology to explore the perspective of firms in social sustainability (SS) measurement, to investigate its potential antecedents and outcomes to further our understanding of its implications for corporate strategy and long-term societal impact. This contribution adopts an in-depth case study of a medium-sized Italian company, which is considered a benchmark firm for social sustainability, especially for diversity and inclusion and community and local engagement. Finally, the third body of work seeks to investigate the relationship between corporations’ AI focus and their sustainability performance, in terms of environmental, social, financial and governance dimensions, to better comprehend AI's role in pursuing the United Nations SDGs. This manuscript employs a regression analysis with a balanced panel dataset of 3456 observations, related to 432 European-listed firms, spanning from 2015 to 2023. The first manuscript's empirical findings support the literature strands suggesting that the OC of financial institutions, foreign IIs, governments, and pension funds positively affect firms’ environmental behavior regarding GHG emissions reduction. On the other hand, this study supports extant literature indicating a negative impact of cross holdings’ OC on businesses’ GHG emissions reduction. Therefore, the first paper further supports the notion that different forms of IIs’ OC nurture carbon neutrality. Furthermore, the second paper critically explores the social dimension of CS, analyzing the antecedents and outcomes of its measurement. In fact, the empirical findings obtained highlight the crucial importance of company culture, employee participation and engagement, and external stakeholder expectations in fostering SS measurement. Concerning outcomes, SS measurement has been shown to enhance company reputation and significantly impact the availability of various finance sources. Furthermore, it fosters a more flexible and innovative mindset among employees and managers, serving as a unifying force that aligns efforts with strategic goals. Finally, the third contribution’s empirical findings reveal a positive impact of organizations’ focus on AI and their sustainability performance. More specifically, the obtained results highlight a positive and significant association between firms’ AI focus and their environmental, social and financial performance. Furthermore, a positive but non-significant relationship between firms’ AI focus and their governance pillar score was found as well. Therefore, the third manuscript supports the literature strands highlighting how organizations’ AI focus might translate into improved CS performance, thereby adhering to the UN SDGs. This collection of papers addresses research gaps identified by academics and practitioners; hence, the research questions and objectives of the three bodies of work are novel and pertinent to contemporary concerns and circumstances