California State University-Northridge, United States
Previous research has called firms to adopt longer time horizons to cope with sustainability risks. In this article, we argue that firms’ ability to ‘sense’ future sustainability risks is associated with long-term strategic decisions and investments, ultimately resulting in sustainability preparedness. We build on the literature on dynamic capabilities and conceptualize sustainability preparedness as a combination of sensing, seizing, and reconfiguring for future sustainability risks. Drawing on Natural Language Processing (NLP) methods, we test our hypotheses on 2200 U.S. companies from 2014 to 2018. Our findings support our predictions and contribute to the literature on corporate sustainability and temporality by showing how firms’ ex-ante anticipations of sustainability risks affect strategy-making.
