What are the environmental capabilities, as components of the sustainable intellectual capital, that matter to the CEOs of European companies?
| DOI | https://doi.org/10.1108/JIC-06-2020-0215 |
| Published date | 12 April 2021 |
| Date | 12 April 2021 |
| Pages | 918-937 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Elisabeth Albertini |
What are the environmental
capabilities, as components of the
sustainable intellectual capital,
that matter to the CEOs of
European companies?
Elisabeth Albertini
Sorbonne Business School, Paris, France
Abstract
Purpose –Environmental capabilities, allowing companies to carry out their productive activities in ways
that limit damage to natural environment, are at the heart of the fourth stage of research in intellectual capital.
Accordingly, the purpose of this research is to explore firm’s current environmental capabilities, disclosed by
managers through corporate messages, that participate to the development of sustainable intellectual
capital (SIC).
Design/methodology/approach –With this in mind, we first conducted a lexical content analysis followed
by a thematic content analysis of 241 letters to shareholders from the CEOs of major European companies
published in 2016.
Findings –The lexical content analysis reveals that managers of major European companies have developed
green alliances to address the energy transition challenge by modifying their manufacturing processes. The
thematic content analysis of the CEOs discourse highlights that managerial competencies, continuous
innovation and stakeholder integration are key environmental capabilities that matter to CEOs.
Research limitations/implications –This study contributes to the fourth stage of research on IC
highlighting the environmental capabilities and resources that are disclosed by companies in their corporate
communication. Our results enhance the understanding on how environmental capabilities and resources
enhance the human, organizational, technological and relational sustainable intellectual capital.
Practical implications –This research highlights the importance of green alliances that allow companies to
address the challenge of the ecological transition. In this context, the continuous innovationcapability seems to
be a fruitful way of gaining competitive advantage in this challenge.
Originality/value –This paper provides a detailed description of the environmental capabilities that
participate to the development of the human, technological and relational SIC.
Keywords Environmental capabilities, Sustainable intellectual capital, Content analysis, CEOs discourse,
Aspirational talk, Intellectual capital disclosure
Paper type Research paper
Introduction
Intellectual capital (IC) is crucial not only to create economic value, but also to address the
ecological and social issues that our societies are facing (Massaro et al., 2018).
In the last decade, increasing institutional pressures have forced companies to internalise
environmental and social concerns (Wasiluk, 2013). In that context, companies have
developed new capabilities, such as eco-innovations, new management tools and the
integration of stakeholders’demands that facilitate environmentally sustainable economic
activity (Claver-Cortes et al., 2007). These environmental resources and capabilities, defined
by academics as firm’s ability to carry out its productive activities in ways that limit damage
to the natural environment (Hart and Dowell, 2011), encompass: (1) organizational learning
JIC
22,5
918
This work was funded by the French accounting standard setter as part of a research project
programme on intangibles.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 29 June 2020
Revised 28 October 2020
27 December 2020
26 January 2021
28 February 2021
Accepted 3 March 2021
Journal of Intellectual Capital
Vol. 22 No. 5, 2021
pp. 918-937
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-06-2020-0215
(Henri and Journeault, 2010;Lankoski, 2008); (2) managerial competencies (Orlitzky et al.,
2003); (3) continuous innovation (Aragon-Correa and Sharma, 2003;Surroca et al., 2010); (4)
shared vision (Aragon-Correa and Sharma, 2003;Lopez-Gamero et al., 2008); (5) stakeholder
integration (Baranova and Meadows, 2017); (6) reputation (Orlitzky et al., 2003). According to
Claver-Cortes et al. (2007), environmental capabilities are part of intellectual capital (IC) since
they refer to intangible assets created by the management of knowledge related to the
incorporation of the environment variable in the value creation process.
IC researchhas evolved over recent yearsmoving through four stages (Guthrieet al., 2012).
Duringthe first stage of IC research,a commonly accepted set of IC terminologywas developed,
while the issuesof measuring, managing and reportingIC were approached during thesecond
stage of IC research (Dumay and Garanina, 2013). The third stage critically examined IC in
practice, focusing on managerial implications of IC in the value creation process of companies
while the fourth stage extended the concept of value beyond the boundaries of the company
(Dameriand Ricciardi, 2015). In thisfourth stage of research, IC is consideredas crucial not only
creating economicvalue “but also to address the ecological,social and demographic problems
that our societi es are facing”(Dameri and Ricciardi,2015, p. 861). There is an overlap between
sustainability and IC since “both highlight how organizations need to develop new
understandings of how to create and exploit their nonfinancial resources”(Wasiluk, 2013,p.
104). Indeed, IC isseen as mediator in the relationshipbetween corporate social responsibility
and the financialperformance of the companies(Nirino et al.,2020). More specifically, research
have found a significant relationship between environmental performance and firm
performance (Molina-Azorin et al.,2009).
In that context, environmental capabilities developed by companies are part of this fourth
stage of ICresearch in which scholars areanalysing the interrelationsbetween the three pillars
of economic, social and environmental sustainability within IC (Massaro et al., 2018;Secundo
et al.,2020). Although a large body of literature has shed light on the application of
environmental capabilities in a Natural Resources-Based View (NRBV) perspective, little
attention has beendevoted to environmental capabilities through theIC research perspective.
Indeed, sustainable intellectual capital (SIC) defined as the sum of intangible resources,
capabilities,knowledge and relationshipsthat an organizationis able to leverage in the process
of conducting environmental management to gain competitive advantage(Chen, 2008;Lopez-
Gamero et al., 2011) has not been studied extensively from its introduction (Yonget al., 2019).
Hence, studying the different environmental capabilities as part of IC can enhance the
developing finer grained theoretical arguments and empirical measures of the SIC (Lopez-
Gamero et al.,2011;Youndt et al., 2004). Moreover, more research is needed on the corporate
communication about these intellectualcapital components (Dumay and Garanina,2013)and
on the roleof managers in actively shapingthese capabilities throughlanguage performativity
(Crane and Glozer, 2016). In this perspective, the study of CEOs’statement, seen as a
constitutiveprocess withorganizing propertiesthat shape and generateorganizations and their
perception of reality, can help us to better understand how companies mobilize these
environmental capabilities in their corestrategies (Christensen et al.,2013).
Based on the performative nature of communication, the purpose of this research is to
explore firm’s current environmental capabilities, disclosed by managers through corporate
messages, that participate to the development of the SIC. With this in mind, we first
conducted a lexical content analysis, followed by a thematic content analysis of 241 letters to
shareholders from the CEOs of S&P Euro 350 companies that accompanied the 2016 financial
statements published in early 2017.
This study answers several calls for research to explore (1) how an organisation discloses
on IC so that stakeholders can understand how it takes into consideration its environmental
impacts (Dumay, 2016) and (2) the relationships between different variables in the linkage
between green management and financial performance (Molina-Azorin et al., 2009). Hence,
Environment
capability
affecting
company CEOs
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