A theory of credible cross-temporal corporate commitments as goal-based private sustainability governance

Abstract

Goal-based corporate supply chain commitments to zero-deforestation, carbon neutrality, or sustainable sourcing have become important elements of businesses' sustainability and reputation management practices. However, we still know little about the conditions under which such cross-temporal commitments are likely to be successful. This article introduces commitment credibility as a crucial but understudied antecedent of success. Drawing on the economic theory of imagined futures, it shows how cross-temporal signaling via commitments may change suppliers' expectations and related actions and thereby co-create more sustainable futures. By using insights from credible commitment theory, it argues that this pathway relies on high motivational and/or imperative credibility of the committed company. Contrasting the example of zero-deforestation commitments in the palm oil sector with commitments to sustainable seafood and no farmworker exploitation, it highlights that the involvement of critical stakeholders (as external accountability partners or third-party implementing agents) is of particularly high importance for on-the-ground success.