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Selecting and benchmarking a sustainability ratio : combining the environmental impact and financial performance of a company
Gerritsma, Bouke (2025) Selecting and benchmarking a sustainability ratio : combining the environmental impact and financial performance of a company.
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| Abstract: | The growing importance of sustainability in corporate decision-making has highlighted the need for standardized and transparent reporting mechanisms. This study examines the feasibility and impact of implementing a universal sustainability ratio that integrates financial performance with environmental impact. By benchmarking this ratio, the research aims to improve comparability across industries, enhance corporate accountability, and support informed decision-making by investors, regulators, and other stakeholders. • Need for Standardization: Sustainability reporting remains fragmented due to varying frameworks such as GRI, SASB, and CSRD. A universal sustainability ratio would address these inconsistencies and enhance comparability. • Sector-Specific Considerations: While a universal ratio improves transparency, industry-specific benchmarks are necessary to account for sectoral differences in environmental impact. • Assurance and Verification: Many sustainability reports lack independent verification, reducing their credibility. Third-party assurance would enhance trust and reliability. • Corporate Implementation Challenges: Adoption of sustainability ratios depends on their ease of calculation and interpretation. Providing clear guidelines and regulatory support would encourage widespread use. The study concludes that a universal sustainability ratio has the potential to improve corporate transparency and accountability, but its effectiveness depends on standardization, sector-specific benchmarks, and independent assurance mechanisms. While companies recognize the importance of sustainability metrics, regulatory enforcement and clear implementation strategies are essential for ensuring their meaningful adoption. Future research should focus on refining the ratio, expanding its application across industries, and assessing its long-term impact on corporate behavior and sustainability performance. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics |
| Programme: | Industrial Engineering and Management MSc (60029) |
| Link to this item: | https://purl.utwente.nl/essays/106463 |
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