Sustainability Management and Standardisation: The Expert Approach of Lithuanian Financial Service Companies

Abstract

The importance of sustainability continues to grow, and various standards now combine to form an important mechanism that underpins the entire sustainability management system. These standards originate from five main international organisations and standard-setting bodies: (1) The Climate Disclosure Project, (2) The Climate Disclosure Standards Board, (3) The Global Reporting Initiative, (4) The International Integrated Reporting Council, and (5) The Sustainability Accounting Standards Board. In addition to these specific bodies, the European Union issues The European Sustainability Reporting Standards. Digitisation is a key tool to improve the measurement and monitoring of sustainability. In Lithuanian financial institutions, ERP, Clarity AI, and artificial intelligence are critical tools alongside external ESG rating providers such as MSCI ESG, Sustainalytics, Refinitiv, and Bloomberg. Existing research often focuses on large multinational institutions or EU-level policy, with limited attention paid to how financial companies address the practical challenges of sustainability—particularly in Lithuania. This article addresses this gap in the research, consulting seven experts to explore the performance of financial companies, their use of sustainability standards, and the key challenges encountered during implementation. To achieve these aims, a structured survey analysing the issues posed by sustainability management is presented, with a particular focus on using standards to discuss problems in this area through exploratory analysis. The interviews produce insights that can help shape the future of sustainability management from the perspectives of both stakeholders and policymakers, as well as providing promising directions for future research.

1. Introduction

Corporate sustainability first began to gain prominence during the 1980s as a result of growing public concern regarding social and environmental challenges. With increasing global awareness of environmental and social issues, corporations’ public reporting practices have changed in the decades since. Stakeholders, including investors, regulators, and consumers, are now demanding more transparency and accountability from corporations. Sustainability reporting has therefore become an essential tool for companies to communicate their performance on sustainability-related matters [1,2].

The European Union (EU) has taken a proactive stance in formalising corporate sustainability reporting through a range of legislative instruments and standards. However, their increasing complexity and mandatory nature necessitate a closer examination of the frameworks that guide this practice. Before the establishment of these stringent regulations, numerous consulting firms introduced a variety of methodologies and initiatives. Leading organisations adopted many of these practices, incorporating the full spectrum of guidelines in industries where maintaining a strong reputation is crucial, such as banking [3,4].

Effective sustainability management is critical to enabling transparency, ensuring comparability between firms, and fostering stakeholder trust [5,6]. However, for this kind of sustainability management to be meaningful, it requires adherence to robust, consistent standards and legislation that enables comparability and reliability. Therefore, many countries and international organisations require companies to submit sustainability reports according to established standards (e.g., GRI—Global Reporting Initiative) [7,8,9]. Sustainability reports also help companies to meet legal requirements related to environmental and social responsibility issues to ensure compliance with laws and international standards.

In the academic literature, distinct directions of analysis are evident in this field. One approach focuses on describing regulatory frameworks, systematising various directives, and highlighting the political processes involved in their formulation [3,10]. Another approach examines the application of standards, emphasising sector-specific characteristics and comparing the financial performance of companies that have implemented these standards with those that have not [11,12]. However, little attention has been paid to analysing the drivers and obstacles that companies face when introducing sustainability practices, especially in the banking sector.

While significant strides forward have been made in the financial services industry, challenges remain. These issues create the need to harmonise standards, enhance regulatory frameworks, and leverage technological advancements to achieve the goals of sustainable finance [13]. Existing research often emphasises large, multinational institutions or broader EU-level policy analysis. In contrast, examinations of how companies in the financial industry tackle the wide range of challenges that sustainability poses are scarce—especially in Lithuania.

This article aims to address this gap in the research by interviewing experts to explore the performance of financial companies in three areas: sustainability management, the use of sustainability standards, and the systematisation of sustainability issues. The information presented here also expands knowledge on sustainability management, especially when using various sustainability standards. To achieve these aims, a structured survey analysing the issues posed by sustainability management is presented, with a particular focus on using standards to discuss problems in this area through exploratory analysis.

A review of scientific articles on the topic was first conducted to categorise the main areas of analysis using VOSviewer 1.6.20 and identify the keywords that highlight particular issues. The Bloomberg database was then used to provide a broader perspective, compensate for the scarcity of statistical information available. Finally, the interview protocols were designed using the Gioia Methodology.

Seven experts working in major financial companies operating in Lithuania were interviewed in 2024. The results of these interviews were systematised using an inductive approach involving categorisation into five thematic areas.

The article is structured linearly: the first section examines the scientific consensus on mandatory regulation and sustainability standards. The second section sets out the methodology of this study in more detail, while the third presents the results of the interviews and highlights the range of sustainability reporting standards in EU companies. Finally, the fourth section provides recommendations for companies seeking to enhance their sustainability reporting.

2. Literature Review

2.1. Keywords

For the first area of theoretical analysis, the VOSviewer tool was employed. Articles from 2020 to 2024 containing the keyword sustainability standards were exported from the Web of Science (WoS) database and visualised (Figure 1). This resulted in 203 articles, which were grouped into three clusters of concepts represented by different colours: red, green, and blue. Red focuses on keywords such as sustainability standards, voluntary standards, data, and certifications, with frequent references to supply chain processes, governance, and empirical studies. This group indicates a strong academic conversation around governance mechanisms, certification schemes, and voluntary sustainability. In fact, companies face numerous challenges arising from institutional pressure and sustainability consulting companies.

Figure 1. A keyword map of scientific research on sustainability standards (compiled by the authors).

The green cluster mainly centres on sustainability reporting frameworks, stakeholder engagement, and organisational roles. This group includes keywords such as stakeholder, implication, company, sustainability report, global reporting initiative, information sustainability reporting, environment, and government. This cluster represents the stakeholder-driven perspective, emphasising transparency, accountability, and communication through sustainability reporting frameworks. In fact, many financial institutions implement various international sustainability standards as soon as they are released to strengthen the confidence of investors, regulators, and customers.

The blue cluster offers a wider perspective on sustainability standards implementation and sustainability policy issues. Terms such as policy, sustainability standards, context, importance, review, need, order, and strategy point to research concerning policy frameworks, contextual factors, and the strategic implementation of sustainability management. This visualisation makes it clear that sustainability standards impact various areas of the organisations that implement them.

Most articles fall within the fields of green sustainability and environmental studies, while slightly more than 20% come from the management field. In contrast, economics, international relations, law, and politics provide fewer articles on sustainability standards. According to the WoS database, Germany is the leader in producing articles related to sustainability standards, followed by the UK, the Netherlands, and Italy. It can also be seen that sustainability reporting analysis covers broad concepts such as the use of sustainability standards, the analysis of organisational performance, and regulation. These topics were also analysed in research from different sectors. The keywords sustainability reporting frameworks, stakeholder engagement, organisational performance, voluntary standards, governance, empirical studies, and regulations produced studies involving both individual and general analyses. This analysis led to the decision to undertake a study that takes a deeper look into the practical problems of large, strong organisations.

2.2. Theoretical Background

From a theoretical perspective, legitimacy theory, stakeholder theory, and the polluter pays principle are key theories supporting the development of sustainable transformation and accountability. The polluter pays principle was first formulated by the Organisation for Economic Co-operation and Development (OECD) in 1972.

Legitimacy theory involves the study and analysis of the processes, principles, and functions involved in law-making within the political and legal system. The theory examines the mechanisms through which laws are formulated, interpreted, and implemented, as well as the underlying concepts and ideologies that influence legislative action. Legitimacy can be understood as ‘a widespread perception or belief that an entity’s actions are considered desirable, appropriate or appropriate within a socially constructed system of norms, values, beliefs, and definitions’ [14]. This theory is crucial for understanding the dynamics of authority, social acceptance, and organisational behaviour. Hamm et al. [15] note that these debates often draw on the ideas of Max Weber, who argued that the legitimacy of power relations stems from their ability to foster cooperative behaviour within the public. Beyond this point, however, scholarly consensus tends to break down, as legitimacy is variously defined and measured—sometimes as attitudes, behaviours, or processes attributed to the audience or powerholders, other times as the interaction between the two. Hamm et al. [15] conclude that ‘given the complexity of the construct, this diversity of approaches is not only defensible, but critical to fully understanding legitimacy’.

Many companies, especially those of an international nature, implement sustainability to be responsible leaders and thus gain public legitimacy. Sustainability has been the dominant development concept for more than fifty years, and public expectations are growing in this area. Companies must continuously improve their quality in this regard in order to maintain legitimacy, and old theories of corporate social responsibility are being replaced by expectations for the deep implementation of an ESG strategy.

Stakeholder theory argues that organisations should consider the interests of all parties affected by their actions, not just shareholders, in their decision making. This theory emphasises the importance of balancing the needs and expectations of diverse groups, including employees, customers, suppliers, and the community. It challenges the traditional shareholder-first model by advocating for a more inclusive approach to corporate governance and accountability. By integrating stakeholder interests, companies can enhance long-term value creation and promote sustainable business practices [16]. Despite its influence, stakeholder theory faces criticism for being vague, difficult to implement, and lacking clear mechanisms for resolving conflicts among competing stakeholder interests. Stakeholder theory has also been criticised for favouring powerful stakeholders while marginalising those who are less powerful, creating significant power asymmetry [17]. Moreover, there are various groups who find it difficult to protect their rights in practice, as this often requires expensive law services. Going further, features of the environment such as biological diversity, clean air, and fresh water should be central to any business practice. The level of influence of various stakeholder groups is constantly changing, and companies continuously reevaluate their importance considering changing circumstances.

The polluter pays principle states that those responsible for environmental pollution should bear the costs associated with reducing its impact. This principle is a fundamental concept in environmental law and policy that ensures that polluters are financially responsible for the damage they cause. This encourages the integration of environmental costs into production processes, thereby promoting more sustainable practices. By attributing economic responsibility to polluters, this principle aims to reduce externalities and encourage the prevention of pollution. The application of the polluter pays principle is very important for resource-intensive industries, and financial institutions play a very important role in the context of the green economy. These organisations are empowered to control pollution by granting loans, financing projects, and monitoring the environmental performance of companies.

2.3. Empirical Studies

Empirical research on sustainability standards can be divided into two broad directions. The first, and larger of the two, focuses on the impact of standards on the social, economic, or environmental performance of organisations [11,18,19,20,21]. The second assesses the effectiveness of sustainable reporting in general [22,23,24,25] and when using new digital solutions [18,19,26]. It is also noteworthy that recent academic discussions have increasingly raised concerns about new EU regulations [3,4,10].

Filho et al. [4] presented qualitative research on European sustainability reporting standards. The authors evaluated 20 large European companies to assess their preparedness for the use of ESRS. Their thorough analysis indicated that large companies had already implemented many relevant standards, so adopting ESRS would not be a particularly challenging task for them. According to the authors, the most significant challenges would arise for small and medium enterprises that lack sufficient resources. Therefore, political support, especially at the regional level, would represent a forward-looking solution. Krivogorsky [3] highlighted complex policy challenges by conducting a detailed analysis of two important sustainability reporting approaches: the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG). Hummel and Jobst [10] provided a detailed analysis of EU regulations, systematically describing the directive and related documents concerning sustainability reporting legislation.

Zhang et al. [18] examined the impact of Sustainability Accounting Standards Board (SASB) reports on analysts’ recommendations. Their findings suggest that SASB-based companies, especially those with higher sustainability ratings, receive more favourable recommendations compared to their peers. Nazari and Poursoleyman [19] analysed data from US companies by dividing them into two groups: SASB reporters and non-SASB reporters. Their study adds to the existing literature by examining the ex-post impact of SASB adoption and highlighting the importance of the self-disclosure of sustainability information by peers in the market. Manikas et al. [11] did not find a significant relationship between environmental disclosure and financial performance. The authors’ findings on a US sample of 2223 companies highlighted that those using the SASB guidelines showed better financial performance. Regression analysis was applied to their research, and their results show that it is necessary to pay more attention to the evaluation of sectoral specificities. This ensures that sustainability reports are comprehensive and meet the needs and expectations of different stakeholders. It is also important that the information provided in the legislation is understandable and useful. Yoon et al. [20] analysed the specifics of the implementation of international sustainability standards for reporting, and provided guidelines for expanding the methodology to solve greenhouse gas (GHG) issues. Escoto et al. [21] examined two interrelated approaches to addressing the sustainability challenge: the benefits of investing in sustainability initiatives for small- and medium-sized producers, and the use of standards to support such initiatives. Several data sources were analysed to explore these approaches, with the authors observing that sustainability standards can facilitate the greater participation of SMPs in sustainable development by reducing the risks associated with changing existing practices.

There are also a number of articles that analyse specific sustainability standards in a particular industry. For example, Watzold et al. [27] analysed the effect of sustainable standards implemented in Ghana’s cocoa sector on social, economic, and environmental indicators. The authors concluded that a positive impact was observed in the social and economic indicators, but not in terms of environmental indicators. The same conclusion was documented by Droge et al. [28], who assessed the level of deforestation in five food industries. Factors causing negative impacts can include certification that displaces unsustainable activities to other regions, the placement of environmental priorities below economic welfare, or weak institutional performance.

Tirumala and Upadhyay [12] conducted a study that examined the 2016–2018 period, and paid close attention to the quality of sustainability reports and the integration of sustainability goals in the real estate sector. They particularly focused on goals 11 (sustainable cities and communities), 13 (climate action), and 8 (decent work and economic growth). Their content analysis showed that although companies express interest in these goals, a large gap can be observed between declared intentions and actual actions. This indicates that sustainability reports are more focused on qualitative elements but lack reliable quantitative indicators that would be essential in order to assess progress in achieving goals. Some authors highlight the fact that different stakeholders often have different expectations about the types of values that should be considered in sustainability reporting. This in turn highlights the fact that many stakeholders believe that current methods for measuring and assessing sustainability are inadequate for their specific needs [22,23,24,25].

Another group of articles is characterised by the analysis of digital capabilities such as blockchain, artificial intelligence, etc., in sustainability reporting processes [18,19,26]. Digitalisation and vertical data integration offer potential benefits in collecting and analysing sustainability data using advanced ERP systems [26]. Blockchain technology can be applied to data validation, transaction management, and the objective measurement of corporate sustainability indicators, such as GHG emissions from manufacturing processes [29]. A summary of the academic literature discussed in this article is provided below (Table 1).

Table 1. A summary of the academic literature discussed in this article.

Main Conclusions	Authors/Year	Codes (Keywords)	General Concept
Sustainability reporting approaches: SASB and The European Financial Reporting Advisory Group	Krivogorsky (2024) [3]	ISSB, EFRAG	EU regulations
Legislation on sustainability reporting	Filho et al. (2025); Hummel & Jobst (2024); [4,10]	EU Directives
Stakeholder interests	Hummel & Jobst (2024); Tirumala & Upadhyay (2023); Hörisch et al. (2020); Dissanayake et al. (2021); Tang & Higgins (2022); Deloitte (2024) [10,12,22,23,24,25]	Stakeholders’ expectations	Stakeholder theory
Companies using sustainability guidelines showed better financial performance	Manikas et al. (2021) [11]	Organisational performance	Voluntary sustainable standards and organisational performance
Voluntary standards have not affected environmental indicators	Watzold et al. (2024); Kairo Fernandes et al. (2024) [27,30]	Impact on socioeconomic and environmental indicators
Sustainability standards for reporting, and guidelines for expanding the methodology for solving GHG problems	Yoon et al. (2024) [20]	Sustainability standards
Sustainability standards can facilitate greater participation in sustainable development by reducing the risks associated with changing existing practices	Escoto et al. (2022) [21]	Fostering sustainable development
Digitalisation and vertical data integration offer potential benefits	Sharma & Villányi (2022) [26]	Digitalisation, organisational performance	Digitalisation
Blockchain technology can be applied to data validation, transaction management, and the objective measurement of corporate sustainability indicators	Suta (2023) [29]	Blockchain technology

Source: produced by the authors.

The literature review identified specific factors that influence the rate of adoption of sustainability principles, such as the size of the organisation and government support [3,4,10,21]. Materiality impact factors can be highly dependent on sectors and levels of control, as in many cases it is easier to manipulate high levels of sustainability for the sake of brand reputation [11,19].

To further enhance the quality of conceptual reports, the authors stress the importance of focusing more on quantitative data in the implementation of sustainability standards. This is because, in some cases, qualitative data fails to capture essential elements of this phenomenon [12]. This discrepancy echoes broader critiques by Hörisch et al. [22], Dissanayake et al. [23], Tang & Higgins [24], and Deloitte [25], who argue that current methods insufficiently capture stakeholder-specific expectations and performance outcomes. Sharma and Villányi [26] and Suta [29] highlight the numerous opportunities provided by digital tools that are not sufficiently explored in sustainability management. While standards help to improve the legitimacy of an organisation, there remains a gap between symbolic disclosure and substantive results. This article contributes to the analysis of the readiness of the financial sector to assess the day-to-day challenges of sustainability implementation, with a view to enriching the academic debate on the deeper implementation of sustainability.

Following a theoretical study, the research raises following main question:

How do companies in the Lithuanian financial sector address sustainability management issues by implementing both regulatory and voluntary standards and stakeholder expectations?

This prompts four further sub-questions:

• How do regulatory requirements and voluntary sustainability standards influence sustainability practices?
• How are stakeholder expectations integrated into sustainability management processes, and what tensions or synergies arise?
• What is the level of digitisation in sustainability management?
• What are companies’ future expectations for sustainability management?

Based on the literature analysis, four blocks of questions emerged for the structing of the interviews (Appendix C): the implementation of EU regulations and the ESRS; voluntary sustainability standards and organisational performance; the stakeholder approach to sustainability reporting and standards; and digitalisation in the process of developing sustainability.

2.4. Statistical Observations

The distribution of sustainability reporting mechanisms across industrial sectors presented in Figure 2 illustrates how various reporting frameworks and regulations are applied in different industries. The height of each bar indicates the number of EU companies in that sector reporting data to Bloomberg, while coloured dots represent the extent of the implementation of five major frameworks: PRI (Principles for Responsible Investment), TNFD (Taskforce on Nature-Related Financial Disclosures), UNGC (UN Global Compact), TCFD (The Taskforce on Climate-Related Financial Disclosures), and GRI (Global Reporting Initiative) (Appendix A).

Figure 2. The spread of sustainability standards among EU companies by sector (compiled by the authors based on the Bloomberg database).

The TCFD guidelines were the most popular and were followed by the largest number of companies. However, on 12 October 2023, the TCDF published its final report, formally ceased operations, and handed over monitoring to the International Financial Reporting Standards Foundation.

While the TCFD no longer exists as an organisation, its legacy continues through the standards of the International Sustainability Standards Board (ISSB). Companies transitioning from the TCFD to ISSB frameworks will find continuity, as the foundational principles remain consistent.

By way of comparison, Figure 3 presents the same data as Figure 2, but focuses on companies based in the Baltic states. The UN Global Compact initiative is the most popular framework across all industries in this region. The financial industry has also implemented the UN PRI, which was specifically designed for responsible investment.

Figure 3. Sustainability standards used by companies in the Baltic states by sector (compiled by the authors based on the Bloomberg database).

The financial sector is very active in implementing various standards. This raises a key question: What are the issues that organisations face when implementing these standards in the Lithuanian financial sector?

The EU Green Deal and its regulations are the main documents guiding sustainability policies in Lithuania. The country has a strong and resilient financial sector, which covers commercial and specialised banks, credit unions, pension funds, the insurance sector, as well as payment, e-money, and fintech firms. According to official data from the Bank of Lithuania, there are currently 13 licenced local banks and 5 branches of foreign banks operating in Lithuania. There are also 7 Lithuanian domiciled insurance undertakings and 8 branches of foreign insurance undertakings registered and operating in the country. The insurance sector has strong solvency ratios, and pension and investment funds are growing steadily, contributing to long-term market development. Lithuania is also a top fintech hub in the EU, with over 270 fintech companies and 120+ licenced payment/e-money institutions [30,31,32].

Although some banks predict that the financing conditions for polluting companies will become even tighter, the planned pace of mitigation for ‘green’ companies will be lower than it has been thus far [33]. Currently, Lithuanian industry focuses on energy efficiency, replacing fossil fuels with renewable resources, the electrification of processes, and the deployment of green energy. In Lithuania, as in all euro area countries, the impact of climate change (lending standards and conditions) and related measures have had a tightening effect on bank lending to so-called brown companies. Meanwhile, bank lending standards and lending conditions have been easing for green companies (those that are climate-neutral or contribute very little to climate change). However, in order to achieve deeper decarbonisation, it is necessary to implement new solutions, such as green hydrogen technologies or carbon capture measures, while continuing to provide incentives for change through green finance.

3. Methodology

Seven experts from seven companies operating in Lithuania were selected to review the management of sustainability standards in their company (Appendix B). The companies were chosen for the analysis based on their status as strong representatives of their subsectors in Lithuania and their strong attitudes to sustainability, a policy that is coordinated by a special expert. Based on these criteria, three international banks, two international insurance companies, and two peer-to-peer (P2P) lending platforms were selected. The survey aimed to explore practical issues of the implementation of EU sustainability regulations and the use of voluntary sustainability standards. The study is based on the assumption that expert opinions reveal real trends in the Lithuanian financial services sector. This data can therefore be considered a representative source for analysing sustainability management and standardisation practices. In addition, it is assumed that the experts who participated in the study have sufficient competence and experience to evaluate the processes under consideration in a reasoned manner. The analysis is also based on the assumption that the EU and national requirements in force during the study period create favourable conditions for sustainability initiatives. Therefore, the results obtained are relevant in the context of the development of the sector.

The survey was conducted from September 2024 to June 2025, and the anonymity of the experts was guaranteed during the survey. Experts were selected provided that they had at least 5 years of experience in their company in a senior position, and that they worked as a sustainability manager responsible for the development of sustainability policies in their company.

A semi-structured interview protocol was then developed, which involved discussions that revolved around four topics formulated based on the literature review: the implementation of EU regulations and the ESRS; voluntary sustainability standards and organisational performance; the stakeholder approach to sustainability reporting and standards; and digitalisation in the process of developing sustainability (Appendix C). All questions were non-leading and were clearly formulated to allow the interviewees to openly express their personal experiences and opinions. This was intended to favour the development of new themes and concepts.

Although there is no fixed rule, qualitative research emphasises depth of understanding in large sample sizes. The aim is to reach data saturation—the point at which additional interviews provide little new information. This typically involves 5 to 15 experts [34,35]. This range is often sufficient when the study seeks in-depth insights from participants with specialised knowledge. In this study, saturation was defined as the point at which no new first-order concepts emerged in at least two consecutive interviews. Moreover, the thematic structure had to demonstrate stability, indicating that further data collection was unlikely to yield additional meaningful insights. In our research, the emergence of new codes significantly decreased after the fourth interview, no new first-order concepts emerged after the sixth, and the seventh interview confirmed the stability of the thematic structure. This suggested that saturation had been achieved. Additionally, the selected participants had a deep knowledge of the topic, supporting the relevance and quality of the collected data over sheer quantity.

Interview data were analysed using an inductive approach following the Gioia Methodology [36,37], with the objective of contributing to the broader understanding of sustainability standards. This approach comprises three core stages: (1) first-order analysis, which centres on the perspectives of the informants; (2) second-order analysis, which interprets the data through a theoretical lens; and (3) an aggregate dimension, through which the findings are synthesised to explain or characterise a phenomenon. The resulting data structure illustrates the analytical pathway by which initial interview insights are systematically developed into core themes and analytical dimensions.

Based on relevant theoretical frameworks, an interview protocol was developed to structure the data collection process. The questions were designed to align with the research variables and administered through remote communication tools, tailored to the preferences of each participating expert. The insights provided by these experts were systematically organised, analysed, and interpreted using logical analytical techniques. The survey questions were informed by theoretical reasoning and grounded in economic logic, aiming to capture the most salient elements of the investigated phenomenon (Appendix C).

The data analysis process was structured in the following stages:

• A comprehensive review of the interview content to establish overall understanding;
• The identification and coding of salient topics into concise descriptors—first-order concepts;
• The clustering of related codes into broader conceptual categories—second-order themes that revealed patterns across the dataset;
• The refinement and validation of these emerging themes ensure their fidelity to both the empirical material and the guiding research questions.

To ensure the transparency and reliability of the coding process, a coding protocol was followed. As a result, concepts from the interviews were recorded and definitions were provided. This list of concepts served as a reference point, helping to apply codes consistently across all transcripts. Inter-coder reliability was enhanced by a team approach: two researchers independently coded a portion of the interviews and then compared their results. Reliability was ensured through iterative dialogue and negotiation, which is considered an appropriate strategy in interpretive qualitative research. This was maintained throughout the study and re-audited when forming conclusions.

For the accurate use of this methodology, defined guidelines were followed. The first-order concepts involved participants’ exact phrases or closely paraphrased terms being taken (if the same point was repeated more than once; Table 2). To ensure the validity of theme development, a team-based coding process was used: two researchers independently coded the same subset of transcripts, and differences in coding were discussed and reconciled in joint meetings. Second-order concepts were then formulated based on the discussion of all participating researchers. This made analytical abstraction clearer and helped to distil patterns and relationships among first-order codes. At the third stage, theoretical dimensions were formulated based on analysed literature and economic logic. For the development of final topics, the second-order phrases were evaluated, including such considerations as dependency on similar processes, dynamics, and organisational conditions. Although the primary data consisted only of expert interviews, accuracy was enhanced by applying both researcher and theoretical triangulation. Researcher triangulation was achieved by involving two researchers in the coding process, who independently analysed the transcripts and reconciled differences during discussions. Theoretical triangulation was ensured by systematically comparing emerging themes with insights from the existing literature on sustainability standards. This allowed for the validation and refinement of the analytical framework.

Table 2. Interview results formatted based on the Gioia Methodology.

First-Order Concepts (Raw Terms and Ideas)	Second-Order Concepts	Aggregated Dimensions
Implementation of EU regulations
‘EU directives and national laws are strict.’ ‘There is constant supervision, especially from the national bank.’	Regulatory pressure and legal compliance	Regulatory influence
‘Sustainability is part of our reputation globally.’	Strategic reputation management	Marketing and reputational concerns
‘We act proactively because our image is at stake.’
‘Data is messy, often inaccurate.’ ‘Challenges related to data management, data inaccuracies, and fears of greenwashing.’	Data management and integrity challenges	Data reliability concerns
‘We are afraid of being accused of greenwashing.’	Data management and integrity challenges
‘Impact materiality is subjective and hard to define.’ ‘We often need deeper scientific insights.’	Complexity of materiality and scientific needs	Methodological and technical needs
‘We work across departments and pull people from all over the matrix.’ ‘Cross-functional collaboration across all departments.’ ‘Teams, in which members are collected from different divisions operating in the matrix system.’	Cross-functional integration	Organisational collaboration
“We do not have enough environmental knowledge internally.”	Environmental knowledge gaps	Environmental intellectual resource gaps
Voluntary sustainable standards implemented, and organisational performance
‘TCFD/GRI/PRB/UN SDG/ESRS are standards used together to manage sustainability issues. All have been progressively implemented in the bank.’	Adoption of multiple voluntary sustainability standards	Moving to sustainability standardisation
‘Sustainability is a daily process at all levels of management at banks.’	Integration of sustainability into management culture
‘Challenges to get reliable data from clients, especially for modelling purposes.’	Data reliability issues	Complex digitalisation
‘Challenges such as data availability, technical complexity, IT solutions and integration required a lot of intellectual, technical, and financial resources.’	Technical and intellectual complexity in digitalisation
‘There is still a lot of specific information that is not unified.’	Lack of unified data/information	Data fragmentation
‘Covers many indicators, but mitigation and adaptation to climate change are ESG priorities.’	ESG as a core operational and reporting framework	ESG as guiding logic
Stakeholder approach to sustainability reporting and standards
Summarised from more than one report—all internal stakeholders are included.	High level of inclusion of all stakeholders	Growing stakeholder engagement
Summarised from more than one report—growing number of clients who want sustainability products.
‘There is a need to foster sustainability and select sustainably operating partners and suppliers for cooperation.’	Stakeholder alignment and collaboration
‘Sustainability information to enhance the bank’s reputation.’	Improve reputation	Reputational and trust building through reporting
‘Reporting standards ensure transparency and accountability, which are essential for maintaining trust among stakeholders.’	Maintain trust
Digitalisation in sustainability reporting
Summarised from all reports—many tools (ERP, Clarity AI, etc.)	Need for multiple specialised software tools	Integration of digital tools
Summarised from all reports—planning an increase in digital resources to solve sustainability issues.	Investment in digital resources
Additional remarks about sustainability management
‘Fulfilling all regulatory requirements via a unified methodology.’	Compliance via unified methodology	Sustainability index development
‘In order to reach a comparison.’	Standardised benchmarking
‘Everyone has expectations and the need to increase sustainability.’	Reputational driver stainability	Growing sustainability potential
‘Continued development of sustainability is both a strategic need and a factor of reputation and competitive advantage.’	Stakeholder pressure towards improved sustainability
‘Sustainability education might impact the spread of sustainability not only in one company, but in the whole ecosystem.’	Education as a lever for ecosystem transformation	Cross-sector internal enablers
‘Creating an ecosystem of sustainability.’	Collaboration-driven system-wide transformation
The following five factors were highlighted in all reports: organisational culture and values; leadership and management commitment; climate change and environmental risk; financial resources (fintech and integration) or opportunities; technological development and digital integration.	Impact of external and internal systemic forces	External and systemic sustainability drivers

This study received ethical approval from the VIKO Ethics Committee. All participants provided informed consent prior to the interviews. To ensure confidentiality, participants’ identities have been anonymised and the data is stored securely. Interview transcripts are only accessible to the research team and are not publicly available in order to protect participants’ privacy.

4. Results

The expert interviews sought to explore problems in the management of sustainability standards and reporting in Lithuania, and to highlight critical aspects of these processes. They also offered prospects and challenges for future development. The results of these interviews are presented based on four thematic areas: the issues of implementing EU regulations [38,39,40]; voluntary sustainability standards and organisational performance; stakeholders’ approach to sustainability reporting and standards; and digitalisation in sustainability reporting. Additional remarks regarding the development of sustainability were also sought.

4.1. The Implementation of EU Regulations

The first block covers questions on four topics: EU directives [41,42]; ESRS [42] implementation challenges; teams; and tools for implementation.

According to respondents representing international banks in Lithuania, they implement directives and try to ‘follow other international sustainability incentives as quickly as possible, as they present themselves as market leaders and, for them, it is very important to be seen as proactive’. They thus strengthen their credibility and image as responsible institutions. International banks operating in Lithuania generally comply with EU sustainability regulations, including CSRD, NFRD, SFDR, and the EU Taxonomy. Lithuania-based subsidiaries of international companies do not usually publish a standalone sustainability report; these disclosures are group-wide and cover Lithuanian operations only at a consolidated level, not as a separate report. The disclosure of relevant ESG-related information is often included in annual financial statements and sometimes in corporate responsibility statements. EU regulations are the main drivers that impact transformation. When discussing benefits, the respondents more strongly emphasised that it is ‘necessary to follow regulations, in some cases, to enhance their reputation’. The interviewees also indicated that banks are proactive in adopting initiatives that enhance their sustainable operations, strengthening their credibility and image as responsible institutions.

Experts from the insurance industry pointed out that they are ‘following EU directives immediately, and the main ones are CSRD and SFDR’. They are also ready for the implementation of ESRS. These organisations strive to comply with EU directives promptly, and when national legislation is enacted, the provisions are adapted.

The respondents highlighted challenges related to data management, human resources, regulatory clarity, and supply chains. According to the experts, ‘there may be data inaccuracies or attempts to distort data to make it look better. It is not easy to manage everything smoothly without resorting to greenwashing’. The Bank of Lithuania has conducted analyses of sustainability disclosure practices among financial undertakings, guiding them to enhance transparency and align with EU regulations.

According to the respondents representing P2P lending platforms, they implement directives and try to follow other ‘international sustainability incentives immediately, but they constantly monitor national legislation and its requirements’. Similarly to banks, P2P lending platforms operating in Lithuania generally comply with EU sustainability regulations. As a result, relevant ESG-related information is often included in annual financial statements and corporate responsibility statements. As regards ESRS implementation, experts from P2P lending platforms distinguished a number of internal challenges. These include complexity of data collection and management, integration of ESRS into business strategy, lack of resources, lack of competences and knowledge, and organisational changes. External challenges included regulatory uncertainty or change (‘constantly changing regulatory environment can be confusing’), lack of information symmetry, market pressure and reputational risk, supply chain challenges, and technological challenges. The experts also found data asymmetry problematic, ‘because part of the data may be misunderstood or inaccurate, and sometimes a lack of data and technological problems emerge’. To protect from this, the ESG reporting companies use efficient data management systems and audit verification.

Starting in 2024, large companies (including financial sector companies) began to use ESRS to report on sustainability issues. In banks, subsidiaries are already applying or preparing for CSRD/ESRS at the group level, and 2024 Sustainability Statements are being prepared using ESRS. All respondents highlighted that it is very difficult to accurately measure and explain the impact of ESG on their company’s financial performance. It is also difficult to present their social and environmental impact on the external environment. For example, in banks, ‘the subjective and qualitative nature of impact materiality adds complexity, particularly for financial instruments like derivatives or off-balance sheet items’. On many levels, there is a need for deeper scientific knowledge. According to all respondents, the ‘implementation of ESRS has brought many challenges, as these standards cover a wide range of topics and companies need more intellectual and digital resources’. For example, banks lack internal ESG expertise in combining environmental and financial knowledge. All experts highlighted the need for cross-functional collaboration across all departments. All respondents again agreed that ESRS are much more granular than GRI or TCFD, and the full implementation of CSRD and ESRS will take time due to the lack of sector-specific standards and established market practices.

It is interesting that all companies ensure sustainability by maintaining special teams, whose members are collected from different divisions operating in the matrix system. There are special individuals who are dedicated only to sustainability accounting and reporting, and companies need specialists who possess environmental and social knowledge from both a business-based and professional perspective.

Indicators: Current status of compliance with CSRD, NFRD, SFDR, EU Taxonomy;

Timing of adoption (immediate vs. after national legislation);

Level of preparedness for ESRS implementation;

Internal and external challenges in implementing ESRS;

Existence of a dedicated ESG/sustainability reporting team.

4.2. Voluntary Sustainable Standards and Organisational Performance

The second block covers four questions related to voluntary sustainable standards and organisational performance.

According to experts from banks and P2P lending platforms, ‘the awareness of sustainability and the implementation and deepening of the provisions and measures of the sustainability strategy in financial companies are a daily process at all levels of management and responsibility’.

In the banking industry, the most widely used international commitments are the TCFD, Principles for Responsible Banking (PRB), and Sustainable Development Goals of the United Nations (UN SDG). The ESG principles have been adopted by banks as a key instrument. Lithuanian banks do not produce a complete integrated TCFD/GRI/PRB sustainability report, but its performance is included in the group’s consolidated report, which aligns its practices with their strategy. In the EU, by the end of 2024, all banks had fully implemented the TCFD requirements. TCFD covers governance, strategy, risk management, metrics, and targets. Under the TCFD framework, banks are expected to monitor and report on their clients’ climate-related indicators: emissions, carbon intensity, EU taxonomy alignment, climate strategy, physical risk exposure, ESG ratings, and sectoral risk. They are also expected to encourage scenario analysis and forward-looking assessments. According to all experts from banks, ‘the challenge with these instruments is to obtain reliable data from clients. A modelling perspective based on not very reliable data is not very useful’. Two experts from the international insurance industry highlighted ‘the implementation of ESRS, TCFD, GRI, and SDGs. Lithuanian insurance companies are also progressively implementing sustainability standards, and the most popular are the same as in banks’. Experts from P2P lending platforms pointed out that their companies have implemented ESRS, GRI, and ISO.

All these standards complement each other: TCFD manages financial risk, GRI structures sustainable reporting, the UN SDGs offer a global vision, and ESRS will formalise and standardise sustainability accounting and reporting across the EU. For financial companies investing so much into sustainability management, the implementation of ESRS is not a significant challenge, as they have already met a few of their requirements in many aspects of sustainability management. They consolidate ESRS disclosures into a broader GRI-aligned sustainability report (leveraging GRI’s flexibility alongside the regulatory requirements of ESRS). GRI is used to help organisations report their sustainability impacts in a transparent, comparable, and stakeholder-focused manner. The implementation of all standards has challenges, as data availability, technical complexity, IT solutions, and integration require significant intellectual, technical, and financial resources.

All participating organisations are actively developing an ESG strategy based on the sustainability standards being implemented, and larger organisations cover a wide spectrum of ESG indicators. For example, an expert from one of the largest banks presented the main ESG areas as ‘climate change mitigation, climate change adaptation, social workforce, working conditions, equal treatment and opportunities, consumers and end-users, information security, data privacy, financial inclusion, governance business conduct, corporate culture, and financial crime prevention’. Another expert noted that ‘climate change and emissions, human rights and labour practices, and governance and anti-corruption are the main areas’. Experts from insurance companies observed that they are ‘very actively developing climate change, human rights, diversity, equality, and inclusion as the main aspects of ESG strategy’. Experts from P2P lending platforms consistently emphasised the following ESG indicators: climate change and emissions; human rights and labour practices; diversity, equity, and inclusion; and governance and anti-corruption.

All respondents noted that the implementation of various standards is very efficient for them when seeking to follow all guidelines. Therefore, as these reporting standards have been developing, there have been many challenges, including workloads and the special qualifications required. There are also many indicators, but there is no single index of comparison. Therefore, according to the respondents, ‘initially the main point is a way to meet the regulatory requirements, and it is part of a high-responsibility image, but there is no clear financial impact’.

Standards are efficient, but the situation is constantly changing, so it is necessary to adapt to new existing requirements and invest in developing sustainability management. There also remains a lot of specific information that is not unified. All implemented standards have helped to tackle the procedures of analysing and transforming some processes as well as collecting data. However, organisations do not possess enough intellectual resources to manage all of these issues alone. As the transformation has taken significant effort, the gradual implementation of various standards has provided directions for reengineering.

4.3. Stakeholders’ Approach to Sustainability Reporting and Standards

This area contains three questions related to the performance of stakeholders in the development of sustainability processes and the implementation of standards, as both points are closely related.

In banks, insurance undertakings, and companies in the P2P industry, all internal stakeholders are included in sustainability management in terms of strategic decisions, process reengineering, implementing standards, and preparing reports. This includes investors, the board of directors, managers at all levels, and many other employees. Considering the inclusion of external stakeholders, respondents from banks highlighted the ‘participation of external rating agencies such as Bloomberg for the regular application of ESG data to them’. Regulators, such as the central bank, also encourage banks to demonstrate high sustainability performance, so the standards implemented help to manage these issues. There is a growing number of clients who want sustainable products, and experts from banks also mentioned that ‘they used sustainability information to enhance the bank’s reputation among clients, suppliers, the community, media, non-government organisations, as well as rivals’.

Experts from P2P lending platforms argue that ‘involving key stakeholders in the development of sustainability process is essential because companies are expected to consult stakeholders to identify material impacts, risks, and opportunities’. Their critical insights help to shape relevant and efficient sustainability strategies, and bring to the surface issues that might later become reputational, regulatory, or operational risks.

All expert groups highlighted that internal and external stakeholders are involved in the development of sustainability processes to create added value and involve everyone in the planning process, where all propositions are valuable. It was stressed that ‘customers are actively interested in whether an organisation operates sustainably, and what the main steps towards sustainability are’. There is also a need to foster sustainability and to select partners and suppliers that operate sustainably for cooperation. Both insurance industry experts pointed out that ‘more customers are willing to pay more for sustainable products and services’. This indicates that the expectations of stakeholders are increasing and require significant improvements. Customers also expect reliable data on sustainability performance and sustainable products and processes to be developed in collaboration with sustainable suppliers. P2P customers are actively interested in sustainable investment, and partners try to distinguish the main sustainability aspects. In short, stakeholders’ expectations for improved sustainability management are increasing.

4.4. Digitalisation in Sustainability Reporting

In many cases, digitalisation and sustainability management are based on the processes of implementing sustainability standards and following regulatory requirements. This block of questions was dedicated to the identification of the use of digital resources.

One respondent from a bank pointed out that they are ‘using a tool, Clarity AI, which covers most, but not all, sustainability reporting requirements for banks’. According to the expert, this tool ‘fulfils 80–90% of their sustainability reporting obligations’. However, for full end-to-end ESG compliance, AI is integrated into their wider tech ecosystem and complemented by internal systems, reporting tools, and legal review processes. Clarity AI covers regulatory compliance (e.g., SFDR, EU Taxonomy), ESG risk and impact analysis for investments and portfolios, custom ESG scoring and sustainability reporting, client reporting, and product labelling (e.g., for ESG-themed funds). For ESG benchmarking and scoring, the bank uses external data providers such as MSCI ESG, Sustainalytics, Refinitiv, or Bloomberg ESG.

Experts from insurance and P2P companies pointed out that ‘EFR software is used to collect sustainability data. Reporting is prepared using AI’. P2P companies actively invest in the use of digital resources for sustainability management.

All experts noted the importance of their ERP systems for data storage, and smart AI tools for creating reports. The respondents unanimously emphasised that they plan to increase investments in tools that will help manage sustainability processes. It is a shame that, for security purposes, many respondents did not name the software programmes that are used.

4.5. Additional Remarks on Sustainability Development

Finally, experts were asked to share their companies’ prospects for developing sustainability and highlight the most important factors. All experts stressed the importance of meeting all regulatory requirements in a unified methodology. Three respondents highlighted the importance of increasing intellectual and digital resources in this area. An expert from an insurance company noted how ‘it is important to continue following the path of sustainability and go deeper to integrate the ESG principles into the activities of companies’. An expert from a P2P lending platform noted that ‘the company plans to work more actively with employee well-being, diversity, and inclusion (DEI). Increased attention is being paid to social aspects of the supply chain (e.g., human rights, working conditions)’. Data management platforms and automated reporting tools are being implemented, and analytical tools help to more accurately assess impact and set priorities. Another expert noted that ‘by implementing ESRS, the company plans to strengthen ESG data management, develop a dual materiality analysis, and periodically update its sustainability priorities’. The ESRS guidelines not only encourage compliance, but also help to build a transparent, responsible reputation in the market. At the same time, experts pointed out that ‘many efforts should be made to achieve better customer awareness of sustainability’. In this case, organisations must form a coherent plan for achieving sustainability. They must also understand what needs to be done to better inform customers about the path to sustainability in such a way that increases the responsibility of brands. In short, everyone has high expectations and sees the necessity of increasing sustainability.

Bank experts noted that ‘organisational values and leadership, corporate culture, fintech development, climate change, customer expectations, and financial opportunities’ play a role in the development of sustainability. In the insurance industry, ‘the development of sustainability reporting and standardisation is affected by many factors such as organisational strategy and management commitment, company culture and values, financial and human resources, the integration of digital technologies, legal regulation, market pressure and competition, and climate change and natural risks’. In the context of P2P lending companies, the following factors were mentioned: fintech development, climate change, customer expectations, financial opportunities, organisational values and leadership, corporate culture, and financial opportunities.

Regarding the prospects for using sustainability standards in developing sustainability processes, the experts noted ‘that everything is growing and needs to capture more intellectual and digital resources’. As regulations become stricter and attitudes towards sustainable living are becoming more serious, companies are actively tackling these issues despite huge geopolitical challenges. Experts agree that ‘there is a cost to being sustainable. However, this is a price worth paying to grow the reputation’.

The results of the interview analysis were aggregated, as visualised in Table 2 and Appendix D. The raw terms and ideas presented in the first column were selected from the interview material as the most important highlights. After the aggregation and systematisation of keywords derived from five blocks, the following important topics were defined for future consideration: regulatory influence, marketing and reputational concerns, data reliability concerns, methodological and technical needs, organisational collaboration, environmental intellectual resource gaps, moving to sustainability standardisation, complex digitalisation, data fragmentation, ESG as guiding logic, growing stakeholder engagement, reputation and trust-building through reporting, the integration of digital tools, sustainability index development, growing sustainability potential, and external and systemic sustainability drivers.

The aggregated topics, which can be described as future directions, concentrate on further developing a unique methodology of assessing, comparing, and reporting sustainability. This involves not only regulation, but also growing the interest of stakeholders in the impact of sustainability. It is also crucial to constantly develop sustainability processes, the construction of which is closely related to smart digitalisation. Companies are planning to invest a lot not only in purchasing new software, but also in integrating it.

5. Discussion

There are many challenges that companies encounter when following sustainable regulations, beginning with the availability and quality of data. For example, banks must report on financed emissions, but it is very difficult to collect such information from clients, especially small and medium enterprises. Unlike the manufacturing or retail sectors, the impact of a bank is indirect, and primarily occurs through lending, investing, and underwriting. Measuring the sustainability impact of these activities requires complex modelling, and often involves cooperation from clients. Banks may need to encourage or pressure clients (especially small businesses) to provide sustainability data. This affects client relationships and could expose banks to reputational risks if transparency is lacking. Challenges arise from complexity, data availability, and a lack of internal capacity. These problems are mainly due to the human factor, as subjectivity can occur. This leads to a lack of regulatory clarity and improper data management, where data may be hidden or misinterpreted. The fulfilment and scope of auditing procedures should therefore increase, as ensuring the auditability of nonfinancial data requires formal controls and documentation in a manner similar to financial reporting.

The regulatory reporting challenges faced by companies include the technology and infrastructure necessary to implement all regulations, cost and resources, confidentiality and security, regulatory timelines, the interpretation of regulations, data quality, data aggregation and validation, data volume and variety, and changing regulations. An expert from one of the largest banks highlighted the following main ESG areas: climate change mitigation, climate change adaptation, social workforce, working conditions, equal treatment and opportunities, consumers and end-users, information security, data privacy, financial inclusion, governance business conduct, corporate culture, and financial crime prevention. Another expert noted that climate change and emissions, human rights and labour practices, and governance and anticorruption are the main areas of concern. Insurance companies highlighted actively developing climate change, human rights, diversity, equality, and inclusion as the main aspects of ESG strategy.

Innovations in areas such as green fintech solutions and green products, the development of monitoring for sustainable investments, and interactive solutions for sustainability education could impact the spread of sustainability not only in one company, but in the whole ecosystem. An expert from the insurance industry noted that, given the EU Green Deal, the ESG regulations, and growing customer awareness, the continued development of sustainability in companies is both a strategic need and a factor for enhancing their reputation and securing competitive advantage.

This research contributes to the sustainability debate by systematising practical issues. The primary theoretical contribution lies in identifying the key themes examined by sustainability management scholars. Our findings indicate that legitimacy is particularly important in small markets, such as Lithuania’s relatively young financial sector, where historical and regional contexts shape companies’ attitudes. Sustainability standards are often used to enhance reputation, sometimes serving branding purposes more than driving substantive change. The pressure for social legitimacy may be stronger in small, emerging economies than in developed markets. Our results also show that external stakeholders, such as regulators, are most important in the financial sector. Stakeholder theory is thus refined by showing that external/global stakeholders (EU standards, international boards, ESG investors) often outweigh local stakeholders in promoting sustainability in small economies. Based on the polluter pays theory, these results show that the financial sector needs to exert greater influence on polluters.

At the practical level, the main sustainability-related issues addressed by the financial industry were systematised. The study presents significant findings regarding future areas of development, including the correlation between regulatory compliance, reputation, and societal awareness; the complexities of digitalisation and data storage; the growing demand for intellectual environmental expertise; and the need for further sustainability standardisation. The results highlight the increasing awareness of sustainability in Lithuanian society as a critically important phenomenon.

The conclusions of this study are in line with those of Tirumala and Upadhyay [12], who argue that companies often ‘say more than they actually say’, and that qualitative disclosures on SDGs lack quantitative indicators. This study highlights the importance of the reliability, completeness and measurability of reports, echoing Hörisch et al. [22], Dissanayake et al. [23], Tang and Higgins [24], and Deloitte [25]. In many cases, existing standards (ESRS, ISSB, SASB, etc.) are necessary for validity [3,4,10], but there remains a debate as to how to improve dual meaningfulness [11,18,19]. For Lithuanian financial services companies, success in sustainability management will depend on how effectively they reconcile governance systems, stakeholder pressures, and the contextual realities of policy. They must move from the symbolic adoption of standards to strategic, integrated sustainability practices.

This study deepens the understanding of sustainability management in the financial sector by integrating regulatory and voluntary standards, stakeholder expectations, and digitalisation into a coherent framework. Using the Gioia methodology, key aggregated aspects were derived (Table 2). By revealing the interrelationships between compliance, engagement, digitalisation and strategic foresight, the study offers a transferable analytical framework. This consists of a range of possible indicators (Appendix C, the fourth column) that can be used to conduct comparative studies in both the Baltic region and wider European financial systems.

6. Conclusions

Sustainability standards have become a crucial tool for companies seeking to demonstrate their commitment to responsible business practices and long-term sustainability. Leading companies are implementing many tools to meet all regulations and at the same time enhance their reputations. The statistical analysis of a sample provided by Bloomberg shows that large companies are implementing different sustainability standards, but they clearly understand the complexity of sustainability issues. Companies in the financial sector are the most active, as this sector is at a mature stage of development and these enterprises are well-resourced enough to maintain a strong reputational position in the market. TCFD (now called ISSB) is the most popular set of guidelines, with GRI second. According to Bloomberg data, the UN Global Compact initiative is the most popular framework across all industries in the Baltic states. This signals the fact that different standards are needed to tackle all sustainability issues, despite significant recent improvements in several areas.

This study highlights the fact that Lithuanian financial institutions, especially banks, are highly active in the implementation of EU regulations. They behave this way because they associate such scrutiny with brand reputation. Leading international organisations adopt EU sustainability directives immediately after they enter into force, while others wait for national approval. ESRS is not a significant challenge for these kinds of companies, but there are issues related to data management and measurement, human resources, regulatory clarity, data inaccuracies, greenwashing, and the precise measurement of the impact of ESG on financial and social performance. Digitisation is a key tool to improve the measurement and monitoring of sustainability. In Lithuanian financial institutions, ERP, Clarity AI, and artificial intelligence are critical tools. They are employed alongside external ESG rating providers such as MSCI ESG, Sustainalytics, Refinitiv, and Bloomberg.

Financial companies actively track their competitors, with banks leading the sector. Thus, diversity in the implementation of standards is linked to public awareness in different regions. Among Lithuanian financial institutions, the three most important ESG criteria are climate change and emissions, human rights and labour practices, and governance and anti-corruption. The analysis of stakeholder engagement shows that regulators are the most influential actors, with customer attitudes coming second. However, increasing engagement across all stakeholder levels is raising awareness in Lithuanian society, which remains relatively inactive in supporting sustainable development.

The study unveiled avenues for further research into precise sustainability measurement, as well as related brand image and regulatory issues. Implementing sustainability standards comes with numerous challenges, such as limited data availability, high technical complexity, and the need for sophisticated IT solutions and integration. All of these issues require significant intellectual, technical, and financial resources. Progress is being made toward standardisation, though comparisons of companies’ sustainability levels remain incomplete. Companies and their consultants are increasingly investing in sustainability software solutions. ESG has emerged as the leading framework for implementing sustainability. However, its effectiveness could be enhanced by identifying and prioritising the most important and measurable indicators.

Overall, many large companies in Lithuania operate internationally, and therefore promptly follow European sustainability directives and standards. This research proves that sustainability is directly linked to the reputations of financial companies. Growing engagement at all stakeholder levels raises the level of awareness of in Lithuanian society, which in general is not very active in supporting sustainable development at present.

The main themes of this study are the importance of regulatory compliance and reputation management through sustainability, advancing digitalisation and database systems, and enhancing environmental knowledge. Despite abundant intellectual resources, the financial sector needs to improve environmental intelligence and invest further in smart digital solutions and their integration. These themes align with economic logic and current trends, while also highlighting specific directions [1,2,13].

These conclusions provide several practical insights. First, it is very important for organisations to ensure the creation of cross-functional teams. This can be achieved by strengthening their environmental knowledge potential, the efficiency of ESG data collection, and the transparency of their analysis. Companies should also prioritise the most measurable and influential sustainability indicators that truly reflect the specifics of their sector

7. Limitations and Future Research

Although this study provides detailed insights into the practices of seven Lithuanian financial companies, the results should be approached with caution when applied to other sectors, countries, or organisational contexts. The small, targeted sample limits the possibilities for statistical generalisation. Therefore, the results should be interpreted as analytically transferable rather than universally representative. They provide contextual insights that can inform, but not predict, sustainability management practices in other contexts.

Secondly, the focus on the Lithuanian financial sector means that the conclusions are shaped by the specific regulatory and institutional environment of the country. Therefore, their applicability to other sectors or countries depends on the degree of regulatory maturity and similarity of stakeholder structures.

Third, although the Gioia methodology provided a comprehensive conceptual understanding, it relies on subjective interpretation of qualitative data. Despite rigorous coding procedures, this may have introduced researcher bias. This methodological limitation highlights the need for triangulation with document analysis or quantitative indicators in future studies.

Future studies could expand the sample to include a wider range of financial institutions and other economic sectors in the Baltic countries or the wider EU. A comparative cross-country study would allow the applicability of the conceptual framework to be tested. In addition, combining insights gained from interviews with ESG data analysis and longitudinal studies could increase reliability and reveal how sustainability management evolves over time. The indicators thus obtained could be used to create a quantitative index.