ABSTRACT
This chapter describes how sustainability management control systems (SMCSs) can enable companies to pursue environment, social, and governance (ESG) performance targets through new product development (NPD). To this end, a large Japanese electronics company was selected as a representative case, wherein consideration was explicitly given to environmental performance, owing at least partly to the national context, including regulations by the government and initiatives taken by economic associations. The case study demonstrates how the case company’s long-term vision incorporating an environmental agenda resulted in subsequent developments of NPD processes in its two subsidiaries with different types of stakeholders as an important contextual difference. As part of the NPD processes, an ESG performance indicator related to carbon emissions was used to evaluate the performance of new products in not only financial and technological terms, but also environmental terms. Thus, this chapter illustrates how SMCSs can assist companies in materialising their ESG agenda through the development and provision of sustainable products to their customers in different manners, contingent upon organisational contexts.
