11051: The Hype Is Over, Now What? How Corporate Governance Can Safeguard the Future of Sustainability

The management of social and environmental sustainability—both local and global—has emerged as a critical issue for business and society, with significant implications for future generations. Reflecting this broader concern, management scholars are increasingly focussing on the pivotal role of corporate governance in addressing the grand challenge of sustainability, recognizing that the structure and process of decision-making within firms plays a decisive role in this regard (Walls & Berrone, 2017; Jain et al., 2023). Indeed, corporate governance is important to ensure a long-term orientation by executives and boards and is therefore uniquely placed to influence firms’ sustainability strategies. Yet, starting in 2023, corporate sustainability moved into a sort of “recession”. While prior years witnessed a sustainability hype that was mostly driven by the quick expansion of environment, social, and governance (ESG) investing and the launch of landmark sustainability regulations in Europe, practitioners’ enthusiasm around corporate sustainability started to decline in 2023 and this trend continued in 2024. For instance, one analysis observed that CEOs prioritization of sustainability dropped sharply from 2022 to 2023 (Ageyeva-Furman et al. 2024). In 2024, numerous companies (e.g., Unilever, Coca Cola, Colgate Palmolive, and Bank of America) also either dropped some of their sustainability targets or revised them into less ambitious goals (Salinas & Somasundaram, 2024). The continued politicization of the ESG debate in the U.S. intensified the skepticism of some investors contributing to a sharp drop in the support of ESG-related shareholder resolutions. These recent developments show that companies need to work harder to safeguard their sustainability strategies. In this panel symposium, we propose corporate governance as a framework to safeguard the future of corporate sustainability. We will explore how corporate governance mechanisms and approaches could enable businesses to employ an inclusive approach for creating value for stakeholders, society and the environment. In this context, this panel symposium brings together key international scholars working at the intersection of corporate governance and corporate sustainability to interactively discuss how different theoretical understandings, approaches and mechanisms within corporate governance can contribute to such safeguarding.