Sustainability Orientation Paradox: Do Banks Ensure Strategic Sustainable Development?

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The manuscript titled “Sustainability orientation paradox: Do banks ensure strategic sustainable development?” is a well-crafted and highly relevant contribution to the field of sustainability and banking. It addresses a timely and underexplored issue by analyzing how banks in the Baltic region engage with the United Nations Sustainable Development Goals (SDGs), particularly through the lens of sustainability orientation. The authors’ integration of institutional theory, stakeholder theory, and transformational leadership theory, combined with an analysis of national cultural dimensions, provides a rich, interdisciplinary framework that deepens the reader’s understanding of the observed sustainability paradox.

The paper is commendable for its originality and clarity. It is structured logically and the arguments are consistently coherent and well-supported by both theoretical foundations and empirical data. The research design is appropriately rigorous and includes a mixed-methods approach comprising bibliometric analysis, financial performance evaluation, and content analysis of sustainability-related reports. These methodologies are clearly explained and appropriately aligned with the research questions posed. The narrative is well-written, and the quality of English throughout the manuscript is high, with no apparent language issues.

One of the key strengths of this manuscript is its ability to combine conceptual and empirical analysis while maintaining relevance to both academic and practical audiences. The exploration of cultural dimensions—particularly the application of Hofstede’s model to interpret differences in sustainability focus—is both original and highly valuable. This cultural insight contributes to explaining the apparent neglect of social SDGs in favor of economic and environmental goals, which is central to the paper’s core argument.

However, there are a few areas where the manuscript could be further enhanced. Firstly, although the authors acknowledge the limited generalizability of findings beyond the Baltic context, a more explicit discussion in the conclusion about how these insights might be cautiously applied to other EU or post-Soviet contexts would help to increase the study’s broader impact. Secondly, the manuscript would benefit from an earlier and more focused definition of sustainability orientation in the introduction section, ideally accompanied by a brief discussion of the varied interpretations in the literature. This would give the reader a clearer conceptual foundation before the more complex theoretical integrations are introduced. Additionally, while the figures and tables are generally well-constructed and informative, a few of them could be more intuitively labeled and described in the text. For instance, ensuring that each figure’s relevance to the discussion is made fully explicit would help enhance clarity for the reader.

Overall, this is a high-quality manuscript that provides a valuable and innovative contribution to sustainability scholarship in the financial sector. I recommend it for publication after minor revisions to address the points above, particularly in clarifying the broader applicability of the findings and reinforcing key definitions in the conceptual framework. The study’s insights into the complex interplay between institutional pressures, leadership, stakeholder expectations, and national culture are timely and important for both scholars and practitioners navigating the challenges of sustainable banking.

Comments on the Quality of English Language

The quality of English throughout the manuscript is excellent. The writing is clear, precise, and professionally articulated. Terminology is used accurately, and the academic tone is consistent. No revisions are necessary in terms of grammar, vocabulary, or style.

Author Response

Dear Reviewer,

Thank you for taking the time to review our manuscript and for your positive overall assessment. We are committed to enhancing the quality of our research and value your constructive feedback. You will find the answers to your questions and suggestions below:

1. Feedback: Firstly, although the authors acknowledge the limited generalizability of findings beyond the Baltic context, a more explicit discussion in the conclusion about how these insights might be cautiously applied to other EU or post-Soviet contexts would help to increase the study’s broader impact.
   Comment from the authors: Thank you for your valuable feedback. As suggested, we have expanded our discussion on the generalizability of our findings beyond the Baltic context in the Introduction section (lines 103-105) and enhanced the Discussion section to cautiously indicate potential applicability to other EU and post-Soviet contexts (lines 706-734). We acknowledge the need for careful consideration of regional specificities while proposing broader implications. To strengthen it, based on the previous financial review of the largest Baltic banks, we have introduced a new section on regional context and background, and we have supplemented it with additional insights about national sustainable development and the results of the correlation analysis (lines 330-398). Please kindly refer to the highlighted sections of the manuscript for more information.
2. Feedback: Secondly, the manuscript would benefit from an earlier and more focused definition of sustainability orientation in the introduction section, ideally accompanied by a brief discussion of the varied interpretations in the literature. This would give the reader a clearer conceptual foundation before the more complex theoretical integrations are introduced.
   Comment from the authors: Thank you for your insightful suggestion regarding the definition of sustainability orientation. As suggested, we have revised and improved the third paragraph of the Introduction section (lines 51-62) to clearly define sustainability orientation and provide a discussion of its varied interpretations in the literature. This enhances the conceptual clarity of our research before introducing more complex theoretical integrations. Please kindly refer to the highlighted sections of the manuscript for more information.
3. Feedback: Additionally, while the figures and tables are generally well-constructed and informative, a few of them could be more intuitively labeled and described in the text. For instance, ensuring that each figure’s relevance to the discussion is made fully explicit would help enhance clarity for the reader.
   Comment from the authors: Thank you for highlighting the importance of clear labelling and explicit relevance of figures and tables. As suggested, we have reviewed the manuscript thoroughly to ensure that each Table or Figure is cited before it first appears and have improved their descriptions and titles for intuitive understanding (Figures 1-5, Tables 1-8, Appendices A-F). Please kindly refer to the highlighted sections of the manuscript for more information.

Sincerely,

Authors of this manuscript

 

Reviewer 2 Report

Comments and Suggestions for Authors

The paper “Sustainability orientation paradox: Do banks ensure strategic sustainable development?” develops an interesting idea and is relatively clear. The article is a fruitful contribution to the literature. Methodology is appropriate for the purposes of the study. The style in which the paper is written is certainly clear and concise. Argument is coherent. Notwithstanding, I am not sure that the authors succeed in presenting a paper that is of interest to readers of Sustainability. Nonetheless, it is a matter for the editors of the journal as to whether this sort of paper is what they are looking for. I will try to offer one or two constructive comments anyway, in case the editors and other reviewers consider this paper could be revised and published in the journals. Please note that I do not feel qualified to judge the English language and style.

I think the authors are trying to put too much into a single paper and end by not offering sufficient insights concerning any of the aims they set out to achieve. The bibliometric analysis is too superficial to be of interest. The same is the case with the analysis of the Baltic banking sector context. The analysis of the sustainability orientation in Baltic banks also does not offer the analysis I was expecting, considering the title of the paper.

I think the authors should focus on what they present as the aim of the paper, the examination “of banks' sustainability orientation in the Baltic region, focusing on how institutional, stakeholder, national culture, and leadership factors influence strategic alignment with the United Nations Sustainable Development Goals.

The paper could have a Background section presenting the sustainability context of the countries examined and including the material that now is presented as “Baltic Banking Sector Context: Market Structure and Performance”.

I consider that the theoretical background could be better developed and presented. The paper relies on several theoretical lenses and there is no problem with that. However, what we have is a cursory presentation of them without explaining what can be gained by combining the various lenses.

The analysis of the literature is rather limited. It would have been useful to provide a little more depth about the relevant literature. Although this would have added some complexity to the paper, it would have enhanced its depth. In a paper of this sort, a more penetrating analysis should be offered. For example, I would put forward as the type o paper the authors could present Chagas et al. (2022), which is not included in the references. Below, I provide a list of studies the authors may want to include in their references. These are just a few. There are many more.

In a paper of this sort a more penetrating analysis should be offered. For example, critical perspectives on the matters analyzed are for the most part absent. For example, the authors could reflect upon whether secondary-level sector-specific sustainability reporting standards are needed. Based on their findings, they could reflect upon whether sector specific reporting standards are needed to ensure that sustainability reports’ content captures the industry’s specificities.

To sum up, I think the paper should focus on the sustainability-related reports of the largest Baltic banks, offering more information on the sample, on the content analysis, etc. Eventually the authors could use non-parametric bivariate statistics to test some hypotheses. This would be a nice addition to the paper.

Studies the authors may want to include in their references:

Chagas, E. J. M., Albuquerque, J. D., Maia, L. F. A., & Ceolin, A. C. (2022). Sustainable development, disclosure to stakeholders and the Sustainable Development Goals: Evidence from Brazilian banks’ non-financial reports. Sustainable Development, 30(6), 1975–1986.

de Oliveira, K. V., Lustosa, P. R. B., Freire, F. D. S., & de Carvalho, F. A. (2022). Antecedents of CSR disclosure in an emerging economy: evidence from the banking industry. Journal of Accounting in Emerging Economies, 12(1), 97-126.

Krasodomska, J. (2015). CSR disclosures in the banking industry. Empirical evidence from Poland. Social Responsibility Journal, 11(3), 406–423.

Kumar, K., & Prakash, A. (2019). Examination of sustainability reporting practices in Indian banking sector. Asian Journal of Sustainability and Social Responsibility, 4(2), 2.

Laidroo, L., & Ööbik, U. (2013). Banks' CSR disclosures–headquarters versus subsidiaries. Baltic Journal of Management, 9(1), 47-70.

Laidroo, L., & Sokolova, M. (2015). International banks’ CSR disclosures after the 2008 crisis. Baltic Journal of Management, 10(3), 270-294.

Sethi, S. P., Martell, T. F., & Demir, M. (2017). An Evaluation of the Quality of Corporate Social Responsibility Reports by Some of the World’s Largest Financial Institutions. Journal of Business Ethics, 140(4), 787–805.

Simpson, W. G., & Kohers, T. (2002), The link between corporate social and financial performance: Evidence from the banking industry. Journal of Business Ethics, 35(2), 97–109.

Author Response

Dear Reviewer,

Thank you for your constructive feedback and for taking the time to review our manuscript. We are committed to improving its quality, and your feedback has been instrumental in helping us to improve it. You will find the answers to your questions and suggestions below:

1. Feedback: I think the authors are trying to put too much into a single paper and end by not offering sufficient insights concerning any of the aims they set out to achieve. The bibliometric analysis is too superficial to be of interest. The same is the case with the analysis of the Baltic banking sector context. The analysis of the sustainability orientation in Baltic banks also does not offer the analysis I was expecting, considering the title of the paper.
   Comment from the authors: Thank you for your constructive feedback on the scope of our analysis. We have revised the Bibliometric Analysis subsection to better reflect the discussion on sustainability orientation and sustainable development in banking research (lines 443-457). Additionally, we have introduced a new section on regional context and background, which is supplemented by further insights into national sustainable development and the results of the correlation analysis (lines 330-398). Furthermore, we have revised and improved the Discussion section to provide additional insights and recommendations (lines 571-574, 577-585, 593-598, 623-626, 637-640, 665-670, 682-715). Please kindly refer to the highlighted sections of the manuscript for more information.
2. Feedback: I think the authors should focus on what they present as the aim of the paper, the examination “of banks' sustainability orientation in the Baltic region, focusing on how institutional, stakeholder, national culture, and leadership factors influence strategic alignment with the United Nations Sustainable Development Goals.
   Comment from the authors: Thank you for your suggestion to sharpen our focus on sustainability orientation in Baltic banks. As suggested, we have thoroughly revised our manuscript to highlight the theoretical and practical analysis of sustainability orientation and SDG alignment. For example, we have incorporated additional insights from national sustainable development review and correlation analysis (lines 131-141, 233-239, 332-341, 351-369, 392-397, 481-489, 513-520, 571-574, 577-585, 593-598, 623-626, 682-715; Table 2, Tables 4-6). However, a significant portion of the manuscript is dedicated to detailing a transparent methodology, its consistent application, and its development for performing content analysis on the 11 selected banks throughout the data analysis process. Please kindly refer to the highlighted sections of the manuscript for more information.
3. Feedback: The paper could have a Background section presenting the sustainability context of the countries examined and including the material that now is presented as “Baltic Banking Sector Context: Market Structure and Performance”.
   Comment from the authors: Thank you for recommending a background section on regional sustainability context. As suggested, we have developed a dedicated Regional Context Background section, which we have enhanced with summaries of national sustainability context, market structure and concentration (lines 330-398, Table 4-6).Please kindly refer to the highlighted sections of the manuscript for more information.
4. Feedback: I consider that the theoretical background could be better developed and presented. The paper relies on several theoretical lenses and there is no problem with that. However, what we have is a cursory presentation of them without explaining what can be gained by combining the various lenses.
   Comment from the authors: Thank you for highlighting the need for better development and presentation of our theoretical background. As suggested, we have strengthened the connection between the theoretical lenses used in our study, thereby demonstrating their added value when integrated (lines 232–239, Table 2). Please kindly refer to the highlighted sections of the manuscript for more information.
5. Feedback: The analysis of the literature is rather limited. It would have been useful to provide a little more depth about the relevant literature. Although this would have added some complexity to the paper, it would have enhanced its depth. In a paper of this sort, a more penetrating analysis should be offered. For example, I would put forward as the type o paper the authors could present Chagas et al. (2022), which is not included in the references. Below, I provide a list of studies the authors may want to include in their references. These are just a few. There are many more.
   Comment from the authors: Thank you for suggesting a more penetrating analysis of relevant literature. As recommended, we have expanded our literature review to engage more deeply with the relevant studies (lines 443-457). We have also incorporated part of the suggested references, clearly distinguishing our contributions from the broader existing academic literature (lines 81-86). However, as we also aimed to minimise the increase in word count, it was not possible to discuss all of the suggested references in the manuscript. Despite this, we thank the reviewer for providing this valuable information, which we can apply to future studies. Please kindly refer to the highlighted sections of the manuscript for more information.
6. Feedback: In a paper of this sort a more penetrating analysis should be offered. For example, critical perspectives on the matters analyzed are for the most part absent. For example, the authors could reflect upon whether secondary-level sector-specific sustainability reporting standards are needed. Based on their findings, they could reflect upon whether sector specific reporting standards are needed to ensure that sustainability reports’ content captures the industry’s specificities.
   Comment from the authors: Thank you for suggesting an enhanced critical reflection on the analysed matters. As suggested, we have improved the Discussion section, providing a more comprehensive reflection on the current regulatory framework and recommendations for improvement. This includes the necessity of secondary-level, sector-specific sustainability reporting standards, as evidenced by our findings (lines 131-141; 682-715; 826-837). Please kindly refer to the highlighted sections of the manuscript for more information.
7. Feedback: To sum up, I think the paper should focus on the sustainability-related reports of the largest Baltic banks, offering more information on the sample, on the content analysis, etc. Eventually the authors could use non-parametric bivariate statistics to test some hypotheses.
   Comment from the authors: Thank you for suggesting this. As recommended, we have expanded the Methodology, Background, Results and Discussion sections to include an explanation of how we introduced and used non-parametric bivariate statistical methods, and of the resulting Spearman's rank correlation, to strengthen our empirical analysis (Table 3, Appendix F, lines 318–323, 356–366, 481–489, 513–520). Please kindly refer to the highlighted sections of the manuscript for more information.

Sincerely,

Authors of this manuscript

 

Reviewer 3 Report

Comments and Suggestions for Authors

The paper supports claims based on data from the Baltic area. The paper includes financial metrics such as ROA and ROE, but the financial sustainability dimension could have been framed more theoretically. In fact, evidence shows that financial indicators such as the amount of nonperforming loans and interest margins not only provide a measure of bank stability but also shape the banks’ commitment to strategies related to sustainability (Alnabulsi et al., 2023). 

In the bibliometric analysis section, the tools and queries that the authors of the paper used are described. However, the rationale for why the authors chose those particular parameters (i.e., years, databases, etc.) is not explained.  While Hofstede’s dimensions of culture are used extensively, the authors do not speak to the limitations of using cultural indices. 

The authors report that the banks typically have disparate formats for disclosures. However, the authors could have done a better job of disentangling voluntary versus regulatory purposes. The paper states that cultural traits in the Baltic region (e.g., low indulgence, high uncertainty avoidance) can explain the low social demand for SDG. However, some of the authors’ statements are speculative.

Author Response

Dear Reviewer,

We are grateful for you taking the time to review our manuscript and provide feedback. Our aim is to improve the quality of our research, and your suggestions are a valuable source of guidance in this regard. You will find the answers to your questions and suggestions below:

1. Feedback: The paper supports claims based on data from the Baltic area. The paper includes financial metrics such as ROA and ROE, but the financial sustainability dimension could have been framed more theoretically. In fact, evidence shows that financial indicators such as the amount of nonperforming loans and interest margins not only provide a measure of bank stability but also shape the banks’ commitment to strategies related to sustainability (Alnabulsi et al., 2023).
   Comment from the authors: Thank you for your important suggestion regarding the theoretical framing of financial sustainability indicators. As suggested, we have improved this framing and included the recommended references on financial metrics, particularly concerning non-performing loans and interest margins, to better explain banks' strategic commitment to sustainability in future studies (lines 593-598). Furthermore, based on the previous financial review of the largest Baltic banks, we have introduced a new section on regional context and background, supplemented with additional insights about national sustainable development and the results of the correlation analysis (lines 330-398). Please kindly refer to the highlighted sections of the manuscript for more information.
2. Feedback: In the bibliometric analysis section, the tools and queries that the authors of the paper used are described. However, the rationale for why the authors chose those particular parameters (i.e., years, databases, etc.) is not explained.
   Comment from the authors: Thank you for noting the necessity of clearly explaining our selection of parameters for the bibliometric analysis. As suggested, we have revised and enhanced our methodological subsection to explicitly articulate the rationale behind choosing specific parameters such as years and databases (lines 255-272). Furthermore, to provide a more comprehensive academic background, we have supplemented our bibliometric analysis results with insights from the academic literature on sustainable development and sustainability orientation in banking (Query 3) (lines 443–457). Please kindly refer to the highlighted sections of the manuscript for more information.
3. Feedback: While Hofstede’s dimensions of culture are used extensively, the authors do not speak to the limitations of using cultural indices.
   Comment from the authors: Thank you for raising concerns about the limitations of using Hofstede’s cultural dimensions. As suggested, we have included a discussion of these limitations in the subsection on our approach to content analysis of sustainability reports (lines 311-317). In this addition, we acknowledge and clarify our cautious interpretation, outlining the potential limitations of our analytical framework. We also propose considering additional cultural models, such as GLOBE, Schwartz's values and Trompenaars' model, in future research. Please kindly refer to the highlighted sections of the manuscript for more information.
4. Feedback: The authors report that the banks typically have disparate formats for disclosures. However, the authors could have done a better job of disentangling voluntary versus regulatory purposes.
   Comment from the authors: Thank you for suggesting a clearer distinction between sustainability-related disclosures. As suggested, we have refined our discussion of the differences between sustainability-related reporting formats, based on the results of the content analysis (Appendices D and E) and correlation analysis (Appendix F). These improvements can be found in the Results section (lines 481-489) and the Discussion section (lines 571-574, 577-585). Please kindly refer to the highlighted sections of the manuscript for more information.
5. Feedback: The paper states that cultural traits in the Baltic region (e.g., low indulgence, high uncertainty avoidance) can explain the low social demand for SDG. However, some of the authors’ statements are speculative.
   Comment from the authors: Thank you for pointing this out. As suggested, we reviewed the language used throughout the manuscript with the aim of improving clarity and removing speculative wording that would not be supported by our results (see lines 629-631, 636-640, 647, 651-653, 660-662, 665-670). Please kindly refer to the highlighted sections of the manuscript for more information.

Sincerely,

Authors of this manuscript

 

Reviewer 4 Report

Comments and Suggestions for Authors

This study has discussed the sustainability orientation paradox. Authors have touched an interesting topic and done a great job. I have the following questions and comments;

1. How authors identify the research gap? It would be much better to include the motivational paragraph in introduction for better understanding.
2. Authors have included research questions, which improved the clarity in this study objective.
3. Institutional theory has been used but did not properly discussed. Please work on this section.
4. Ensure to cited all the tables and figures in the text.
5. It is recommended to consider recently published articles on sustainable development and sustainability orientations.
6. Authors need to enrich their theoretical contribution and practical implications.
7. Overall, this study has uncover several innovative findings that can contribute into the scientific knowledge.

Sustainability orientation paradox: Do banks ensure strategic 2 
sustainable development?

Author Response

Dear Reviewer,

Thank you for your positive feedback and for taking the time to review our research. We are committed to improving its quality, and your feedback has enabled us to do so. You will find the answers to your questions and suggestions below:

1. Feedback: How authors identify the research gap? It would be much better to include the motivational paragraph in introduction for better understanding.
   Comment from the authors: Thank you for your valuable suggestion regarding the identification of the research gap. As suggested, we have revised and improved the motivational paragraph in the introduction (lines 81-86) to emphasise how the research gap was identified and why it is relevant to the existing literature. Please kindly refer to the highlighted sections of the manuscript for more information.
2. Feedback: Institutional theory has been used but did not properly discussed. Please work on this section.
   Comment from the authors: Thank you for your feedback on the depth of the institutional theory discussion. As suggested, we have extensively revised and supplemented the institutional theory subsection, clarifying its relevance in the context of sustainable development, sustainability orientation, and banking research (lines 120-121, 123-125, 131-141, 149-151, 159-160). We have also strengthened the related theoretical subsections and their interconnections (lines 182-184, 199, 210-212, 233-239, Table 2), as well as provided additional recommendations for the development of secondary-level, sector-specific sustainability reporting standards for banks, based on these insights (lines 690-707). Please kindly refer to the highlighted sections of the manuscript for more information.
3. Feedback: Ensure to cited all the tables and figures in the text.
   Comment from the authors: Thank you for your attention to citation accuracy of tables and figures. As suggested, we have carefully reviewed all tables and figures to ensure that they are referenced correctly before appearing in the manuscript. We have also refined their titles and descriptions to provide further clarity (Figures 1-5, Tables 1-8, Appendices A-F). Please kindly refer to the highlighted sections of the manuscript for more information.
4. Feedback: It is recommended to consider recently published articles on sustainable development and sustainability orientations.
   Comment from the authors: Thank you for recommending inclusion of recent literature. As suggested, we have reviewed and incorporated more recent publications into the Reference section, ensuring that 41.6% of the included articles are from 2022 onwards. Furthermore, we have addressed the recent US decommitment from international cooperation and the potential impact of global disruptions on sustainable development in the Introduction section (lines 100-103), as well as the regulatory frameworks in the Theoretical Framework section (lines 131-141). Please kindly refer to the highlighted sections of the manuscript for more information.
5. Feedback: Authors need to enrich their theoretical contribution and practical implications.
   Comment from the authors: Thank you for your insightful recommendation to enhance theoretical and practical contributions. As suggested, we have significantly restructured our Conclusion section, creating new and clearer subsections: Conclusion (lines 736-787), Limitations (lines 788-805), Implications (lines 806-837) and Future Research Areas (lines 838-848). This has enriched discussions of the theoretical, practical and policy implications (lines 807-815, 816-825, 826-837). Please kindly refer to the highlighted sections of the manuscript for more information.

Sincerely,

Authors of this manuscript

Round 2

Reviewer 2 Report

Comments and Suggestions for Authors

The authors have addressed my comments and suggestions adequately.