Realising the Twin Transition in industrial companies: Constituting the 'digital and sustainable' company based on stakeholder communication and sensemaking processes

The transition to a sustainable economy that works within the limits set by planetary boundaries is one of the most pressing issues in promoting sustainable development. At the same time, digitalisation, as another socio-economic transformation, is changing not only the way and consequences of production patterns, but also the way we work, the business models we rely on, and how processes are organised – with still largely unknown consequences for the transition to a sustainable economy. With reference to the normative concept of corporate social responsibility, companies have a societal mandate to align the sustainable and the digital transformation, or in other words, to realise the so-called Twin Transition. This becomes a central task of corporate CSR management to identify risks and opportunities, legitimise measures in interaction with stakeholders, and to ‘make sense’ of the ‘digital and sustainable’ company and its characteristics, norms, and values. This is particularly true for industrial companies that are influential for the environmental, social, and economic dimensions of sustainability and at the same time are strongly affected by the changes brought about by digitalisation. While research on the Twin Transition often focuses on aspects of technological implications, sensemaking processes as part of the underlying social and cultural aspects are far less researched, although they are equally important for the realisation of the Twin Transition. This dissertation addresses these aspects by focusing on the constitution and legitimisation of the ‘digital and sustainable’ company through sensemaking and communication processes in the digital society. The dissertation consists of three studies. The first study focuses on sensemaking processes in stakeholder communication (in sustainability reports). The second study reconstructs stakeholder engagement images and their contribution to legitimisation based on corporate communication on Twitter. The third study is a quantitative survey of company representatives and focuses on communication and cooperation in global value chains. By combining the results of all studies, two main facets of the ‘digital and sustainable’ company are addressed: firstly, the mindsets of companies about the implementation of the Twin Transition and their possible consequences, and secondly, stakeholder communication and legitimisation of companies in the digital society. Regarding the first facet of the mindsets about how the Twin Transition is to be realised and its possible consequences, the first study called “Aligning digitalisation and sustainable development? Evidence from the analysis of worldviews in sustainability reports” delivers a framework on sustainability worldviews on digitalisation based on the CSR spectrum of Landrum (2018). For the sample of DAX companies examined, the results show a predominant worldview of weak or business-centred sustainability on digitalisation, which could potentially jeopardise sustainable development by promoting unsustainable consumption and production patterns. In relation to the second facet of communication with stakeholders and legitimisation in the digital society, the second study, “Aspiration, Appearance, Argumentation or Attack? Reconstructing Stakeholder Engagement Images of German industrial companies on Twitter” analyses corporate communication and legitimisation on Twitter and identifies corporate images in the context of stakeholder engagement that arise in response to “socially charged” hashtags. The third study showed that differences in the digitalisation of the value chain were not very pronounced at the country level, but they did occur between small and medium-sized companies compared to larger companies. The second aspect examined was the extent to which the exchange of environmental data along the value chain is already digitalised and fully automated to improve transparency. According to our findings, this is rarely the case. In order to support transparency through digitalisation, it must be clear what the barriers to implementation are and what factors – technological and organisational, but also social and cultural (lack of mindset) – could play a role. Further research is needed to clarify these questions. All studies provide some insights and recommendations regarding how to implement the Twin Transition. These include the dissemination and promotion of best practice examples to enable new narratives of a strong sustainability worldview on digitalisation, but also to counter the narrative of automatically generated sustainability gains through digitalisation. Moreover, participatory processes should be strengthened and insights gained into the mindsets that support or hinder the implementation of the Twin Transition.