The Integration of Sustainability into Organizational Practices : A Qualitative Study of EU Firms

Abstract

The growing importance of sustainability in strategic management has transformed it from a peripheral ethical concern into a fundamental organizational activity, especially within the European Union (EU), where regulatory frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) in-creasingly influence business behavior. Despite numerous studies on the correlation be-tween environmental, social and governance (ESG) performance and financial results, there remains a significant gap in how companies actually put sustainability into practice and incorporate it into business decision-making.

The main objective of this thesis is to examine the process of integrating sustainability into organizational practices of leading companies in the EU. The study is based on stakeholder theory and the sustainability integration framework by Morioka and de Carvalho (2016). Using a qualitative research approach and an exploratory case study design, this study ana-lyzed Euro Stoxx 50 companies' sustainability reports, annual reports and other corporate disclosures for 2024 and 2025 (ten companies). The data was analyzed using thematic analysis with a structured coding framework.

The results identify eight main themes which show how sustainability is being integrated into organisations. The sustainability integration mechanisms revealed in the themes include the creation of sustainability committees at the board level, the implementation of executive renumeration linked to ESG criteria, and the deployment of digital and AI infrastructure for real-time monitoring. The results demonstrate that the CSRD and ESRS serve as a disclosure framework that drives the convergence of organizational behavior, providing standardized grammar for internal alignment. Furthermore, companies are increasingly moving toward science-based segmentation and stakeholder-negotiated agendas through double materiality assessments. This study concludes that the effective integration of sustainability in EU com-panies is driven by the combined influence of regulatory pressure, stakeholder engagement, and internal governance and control systems.

Based on these findings, this study recommended that future research conduct comparative analyses between EU companies and those in less regulated regions, such as Asia or the US, to determine the influence of different regulatory frameworks.