How Firms Combine Sustainability-Oriented Partnerships to Improve Environmental, Social, and Governance Performance: A Qualitative Comparative Analysis Study

Abstract

A partnership portfolio for sustainability (PPS) is the set of partnerships a firm uses to pursue sustainability goals. Although sustainability-oriented partnerships can improve environmental, social, and governance (ESG) performance, we know less about how a firm’s full partnership portfolio shapes these outcomes. Drawing on modern portfolio theory and alliance portfolio research, we examine how PPS configurations influence ESG performance. Using qualitative comparative analysis of 979 sustainability partnerships across 35 global fashion firms, we identify multiple pathways to high ESG performance. Firms achieve strong ESG outcomes through either large, issue-diverse portfolios or smaller, focused portfolios that combine geographical reach with interventions across multiple levels of change. Neither portfolio size nor partner diversity is universally beneficial; rather, ESG performance depends on configurational fit among portfolio characteristics. These findings challenge assumptions that more partnerships or greater diversity automatically improve ESG outcomes and advance a portfolio perspective of sustainability-oriented partnerships.