This paper contributes to our understanding of the impact of dedicated sustainability functions (DSF) on firms’ sustainability performance and how this impact changes in the presence of top-level sustainability positions. While a DSF can generally improve performance due to learning and coordination effects, we submit that this positive effect is stronger if the function is supported by top-level responsibilities for sustainability, either in the form of a board sustainability committee or a top management team (TMT) sustainability position. We test our hypotheses on a unique propriety data set covering a global sample of 149 firms in the food and beverage industry between 2010 and 2020. Our findings largely support our theoretical claims but also reveal complex interdependencies between organizational responsibilities for a strategic issue, like sustainability, at different hierarchical levels. Whereas a DSF positively contributes to firms’ sustainability performance and a board sustainability committee strengthens this relationship, the TMT sustainability position significantly weakens the positive impact of the DSF on firm performance. We contribute to research on (sustainability) governance and organizational theory as well as inform managerial practice by conceptually and empirically disentangling a DSF and top-level sustainability responsibilities, thereby advancing more integrative research of firm’s sustainability governance.
