Environmental sustainability management in social service nonprofits: insights into drivers, challenges and opportunities

Social service nonprofit organizations (SocS-NPOs) are entities whose main task is to address unmet or emerging needs by providing social, economic or psychological support to empower individuals such as the elderly, children and families, people with disabilities, migrants or those affected by poverty or other forms of social exclusion (Kong, 2008; Baines, 2010; Shier and Handy, 2015). Traditionally, their legitimacy and societal relevance have been grounded in social value creation and the pursuit of social justice. However, today SocS-NPOs increasingly face new expectations and challenges arising from the adverse impacts of climate change that affect various social service-related areas (e.g. climate-related migration or heat effects on vulnerable groups). At the same time, the provision of social services itself entails environmental impacts through infrastructure, energy use and resource consumption. As a result, environmental sustainability is becoming increasingly relevant for SocS-NPOs.

Environmental sustainability can be defined as the preservation of natural capital, particularly the life-supporting functions of the environment as a source of resources and a sink for emissions and waste. It requires that renewable resources be used within their regenerative capacity, nonrenewable resources be consumed only to the extent that viable substitutes are developed and pollution remain within the assimilative capacity of ecosystems. Environmental sustainability thus represents a biophysically grounded constraint on human activities and a prerequisite for both social and economic sustainability (Goodland, 1995; World Commission on Environment and Development, 1987; Said et al., 2024). For SocS-NPOs, environmental sustainability is therefore not merely an external ecological concern, but one that is closely intertwined with their social mission and long-term service provision.

Despite the fact that climate change is one of the great societal challenges, prior research shows that the environmental sustainability dimension remains largely underexplored in the nonprofit sector, particularly in organizations whose primary mandate lies outside environmental advocacy. Prior research on environmental (management) practices of NPOs is still in an early stage (see Section 2.1) and a coherent research agenda is missing according to a recent review by Kagan and Dodge (2025). This gap is striking as European SocS-NPOs navigate a dynamic environment shaped by evolving stakeholder expectations, stricter legislative requirements related to environmental aspects, negative effects of climate change on their core production processes, their international partners in developing countries and their beneficiaries. Taking the challenges of climate change seriously, more and more SocS-NPOs should increasingly integrate the environmental sustainability dimension as a third pillar of their sustainability practices, thereby intensifying their environmental sustainability management (ESM). Integrating environmental matters into the management practices of SocS-NPOs increases their organizational complexity even further. This rising complexity regarding the integrated pursuit of the three pillars or dimensions of sustainability can be well analyzed from an institutional logics (ILs) perspective, because SocS-NPOs have always had to deal with the interplay of different logics, namely, social-welfare, business and government logic. Over the past decade, many SocS-NPOs have found ways to combine social-welfare and business logics. Earlier academic debates highlighted the challenge of acting business-like without compromising their social purpose and participatory spirit, or of risking mission drift (Eikenberry and Kluver, 2004; Baines, 2010; Meyer et al., 2013). Today, acting in a financially sustainable manner has become an established practice in SocS-NPOs (Suykens et al., 2023; Meyer, 2025). By contrast, there has been little research into how these relatively new environmental requirements are taken into account as a new aspect of the governance logic of NPOs. From an institutional logic perspective, new arenas of contestation potentially emerge between the three logics.

The study is empirically situated in Austria. As an European Union (EU) member state, Austria is affected by emerging sustainability-related regulatory frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) (European Union, 2022; Bauer and Greiling, 2024). Besides, Austria represents a corporatist welfare-state context characterized by strong public funding structures and performance-based contracting in social services (Heitzmann and Simsa, 2004; Greiling and Stötzer, 2015; Pennerstorfer and Schneider, 2022). Traditionally, environmental aspects played no role in performance contracts, except for specific green-building or energy-efficiency programs. However, governmental pressures to include environmental issues have increased in recent years. Against this background, this study analyzes the implications for SocS-NPOs and investigates this under-researched aspect of government logic by addressing the following research questions (RQs):

In response to the call for further research on environmental issues in the nonprofit sector by Kagan and Dodge (2025), this study contributes to the existing body of knowledge by examining how SocS-NPOs interpret and implement sustainability in the context of increasing environmental expectations. The central objective of this study is to analyze how environmental sustainability is perceived and positioned in relation to social and financial sustainability in SocS-NPOs and to identify the internal and external drivers, opportunities and challenges that shape the adoption and implementation of ESM. By focusing on environmental matters in SocS-NPOs, the study advances a highly under-researched field (see Section 2.1), despite growing stakeholder and regulatory pressures to integrate environmental aspects into sustainability management.

Beyond its empirical contribution, the study provides theoretical insights by applying an ILs perspective to analyze how social-welfare, business and government logics interact when environmental sustainability emerges as an additional organizational demand. In doing so, the study extends institutional logics research to the domain of nonprofit sustainability management by showing how environmental concerns are incorporated into organizations whose primary mandate lies outside environmental advocacy.

Importantly, the study also contributes to ongoing policy discourse on nonprofit sustainability. The findings demonstrate that environmental sustainability requirements introduced through regulatory frameworks, such as EU sustainability reporting initiatives, interact with existing welfare-state governance structures and funding arrangements that were historically designed around social service provision rather than ecological transformation. By highlighting how SocS-NPOs pragmatically respond to regulatory pressures under conditions of institutional complexity, the study provides insights relevant for policymakers and public funders seeking to design sustainability policies that are both effective and feasible in the nonprofit sector. Although grounded in the Austrian context, the study generates insights that are relevant for social service nonprofits operating in comparable institutional environments.

The paper is structured as follows: Section 2 outlines the current state of the literature and the theoretical foundation. Section 3 presents the research design and sample description, followed by the results of our study in Section 4. Section 5 interprets the findings in relation to the theoretical framework, while Section 6 highlights limitations and future research needs.

While there is extensive literature on how for-profit enterprises deal with environmental matters within their sustainability management practices (e.g. Boros and Fogarassy, 2019; Crutzen et al., 2017; Rahman et al., 2024; Schaltegger and Hörisch, 2017), research on environmental sustainability in NPOs is still at an early stage (Ab Samad and Ahmad, 2022; Singh and Mthuli, 2021; Singh et al., 2025; Traxler et al., 2020; Weerawardena et al., 2010) with the notable exception of studies focusing on environmental advocacy nongovernmental organizations. Even less is known about ESM practices within SocS-NPOs. Where addressed at all, the literature mainly focuses on selective instruments such as environmental management systems, environmental cost accounting tools, eco-certificates or non-financial reporting practices (e.g. Albert et al., 2022; Bauer and Greiling, 2024; Papaspyropoulos et al., 2012; White et al., 2014). To the best of our knowledge, only one paper addresses a broader set of sustainability management controls in SocS-NPOs (Bauer and Greiling, 2024). Recent research likewise shows that environmental matters remain underexplored within NPOs, with environmental concerns receiving limited attention despite the urgency of the current climate crisis. While scholars emphasize the need to better understand the role of NPOs as key actors in responding to environmental issues, previous studies show that these topics are only marginally covered and that a coherent research agenda is still lacking (Kagan and Dodge, 2025).

Regarding other sustainability dimensions, NPOs’ financial sustainability is extensively addressed, both from instrumental and critical perspectives (e.g. Amagtome and Alnajjar, 2020; Bowman, 2011; Dadić and Ribarić, 2021; Velandia et al., 2021; Ye and Gong, 2021). An extended body of literature also deals with the interplay between financial sustainability and the societal mandate of NPOs (e.g. Ramus and Vaccaro, 2017) or tensions between social mission and managerialism, including research on how NPO–government relationships have evolved under new public management (NPM) (Greiling and Stötzer, 2015; Meyer, 2025; Maier et al., 2016; Suykens et al., 2019; Suykens et al., 2023).

To the best of our knowledge, there is little research on how SocS-NPOs manage the growing organizational complexity that arises when environmental sustainability becomes an additional concern alongside established social and financial priorities. In particular, there is a lack of empirical insights into how SocS-NPOs perceive the relevance of environmental sustainability in relation to other sustainability dimensions, which drivers motivate the intensification of ESM and which challenges and opportunities emerge from this process. Addressing these gaps is essential for understanding in which ways ESM can be meaningfully integrated into the management practices of NPOs and other organizations whose primary mandate lies outside the environmental domain.

Thornton and Ocasio (1999) described ILs as historically rooted, socially constructed systems of beliefs, practices, norms and rules that shape how individuals and organizations sustain themselves materially, structure time and space and make sense of their social world (p. 804). SocS-NPOs are influenced by several ILs, whose relevance depends on factors such as organizational mission, context and target groups. Operating under multiple, sometimes contradictory, logics, these logics embody culturally embedded frameworks that guide decision-making and determine which actions are considered legitimate.

SocS-NPOs face high institutional complexity due to overlapping and frequently conflicting demands stemming from different ILs (Greenwood et al., 2010; Malhotra et al., 2025). Their roots lie in a social-welfare logic, which emphasizes addressing societal challenges and the needs of marginalized groups (Beer and Micheli, 2017; Woodside, 2018). This logic represents a value system that seeks to improve individual and collective well-being, promote social progress and values such as equality, solidarity, social justice and transformation of society (Schröer and Jäger, 2015). For SocS-NPOs, this means embedding their social mission into strategies, policies and daily operations, making the pursuit of social value creation the dominant institutional logic (see Table 1).

At the same time, SocS-NPOs are increasingly influenced by a business logic, rooted in market principles stressing efficiency and economic performance (Thornton et al., 2012). It manifests in practices such as expanding market share, improving competitiveness or increasing financial returns (Heeks et al., 2020; Malhotra et al., 2025). The rise of managerialism under NPM has accelerated the integration of business logic into the nonprofit sector. However, adopting business logic does not imply that SocS-NPOs become profit-driven organizations, but rather reflects the growing importance of economic sustainability. To remain viable, SocS-NPOs increasingly adopt business-like strategies, while pursuing their social missions (Meyer, 2025; Maier et al., 2016; Suykens et al., 2023). The resulting tension between commercialization and mission-driven work has long been debated. Hansmann (1979) already warned about the risks of nonprofit commercialization. In recent decades, social enterprises whose overarching objective is to pursue a self-defined social mission while being financially sustainable have paved the way for placing social-welfare logic and business logic on an equal footing. Today, SocS-NPOs primarily pursue social or charitable objectives, while they rely on effective business practices (such as fundraising, budgeting, resource allocation and impact measurement) to ensure long-term survival and maximize social outcomes (see Table 1). A third institutional influence stems from government logic, which is particularly relevant when NPOs deliver social services through performance-based contracts with public authorities. This logic emphasizes equality, public accountability and compliance with regulations and policies (Skelcher and Smith, 2015). It requires nonprofits to demonstrate a responsible use of public funds, but often leads to bureaucratic overload, reducing organizational autonomy and constraining their ability to pursue self-defined missions (Greiling and Stötzer, 2015). Traditionally, government logic has emphasized financial and social aspects (like the costs, quantity, quality and entitled beneficiaries of social services provided by SocS-NPOs and funded by public authorities) (Min, 2022). As stated above, governmental attention to environmental sustainability and the associated pressure to address environmental issues has increased in recent years. The intensified regulatory pressure has particularly introduced further compliance requirements for SocS-NPOs (see Table 1). Accordingly, we conceptualize the rising importance of environmental sustainability as a new facet of government logic. While environmental sustainability per se is, of course, not “new”, nor exclusively driven by governmental requirements, it has gained special prominence and relevance through public initiatives in the EU, including new regulatory frameworks such as the CSRD and the ESRS.

Due to multiple institutional demands, SocS-NPOs frequently face tensions among these logics. Social-welfare logic emphasizes community well-being, values of solidarity and social justice, business logic prioritizes efficiency and financial viability and government logic focuses on regulation, equality before the law and public accountability obligations. Navigating these contradictions requires balancing philanthropic ideals with market-oriented efficiency, while adhering to state-imposed requirements (Ahmadsimab and Chowdhury, 2021). In practice, SocS-NPOs must reconcile the creation of social value, the pursuit of financial stability and compliance with public governance frameworks to achieve their missions effectively.

To gain empirical insights, we chose an exploratory qualitative research design based on guided expert interviews (Miles et al., 2020) as ESM in SocS-NPOs is still an under-researched topic. The 15 expert interviews were conducted with 20 interviewees between September 2022 and February 2023 in 15 Austrian SocS-NPOs, partly in person and partly online via Zoom (due to pandemic restrictions at the time). The interviews lasted between 58 and 109 min (81.7 min on average) and were conducted in German. The interview guide contained open-ended questions (see  Appendix).

A content analysis approach was chosen to analyze the data (Miles et al., 2020). To improve the accuracy and credibility of the qualitative analysis, an iterative and reflexive approach was taken to coding. The initial coding was performed independently by two authors of the research team based on the coding system. The coding schemes were then compared and discussed to resolve discrepancies and refine code definitions, thereby strengthening analytical consistency. Regular team meetings were held throughout the analysis to critically reflect on emerging interpretations and possible researcher bias (Guthrie and Abeysekera, 2006). The interviews were recorded, transcribed and both deductively and inductively coded using the MAXQDA 2022 software. First, a predefined category system was developed based on the interview guide. Second, deductive coding focused on the identification of the data relevant to these categories. Third, an inductive analysis was then conducted to identify additional topics and sub-categories. The interview coding and categorization process resulted in a system of main categories and sub-categories (see Table 2) which allowed for a nuanced investigation of the RQs.

The sample (see Table 3) includes SocS-NPOs that are important actors in the field of social service provision in Austria. Austria exemplifies a (neo-)corporatist welfare state where SocS-NPOs are closely linked to the public sector and depend heavily on government funding, including social security resources. Strong historical ties to political parties and churches further characterize the Austrian context (Pennerstorfer and Schneider, 2022). The following criteria were used for sample selection: The authors selected NPOs delivering social services (i.e. care and counseling activities for various client groups), which have either voluntarily implemented sustainability activities or are affected by the CSRD (identified through online desk research). Given the lack of a comprehensive public register of SocS-NPOs and the exploratory nature of this study, a purposive sampling approach (Miles et al., 2020) was used in combination with chain referral (Parker et al., 2019; Noy, 2008). In a first step, the authors conducted online research to identify SocS-NPOs that had either (a) voluntarily implemented initial environmental sustainability activities or (b) were likely to be affected by the CSRD. These organizations served as initial entry points into the research area and were invited to participate in the interview study via email. In a second step, informants were asked to recommend additional SocS-NPOs that met the study criteria or to establish contact with other suitable interviewees, thereby accumulatively expanding the sample via their professional networks. Snowball sampling is frequently used and is a particularly effective tool for accessing a wide range of target groups, including traditionally “hidden populations” (such as drug users) but also socially privileged groups or elites who are “hidden-by-choice” (Noy, 2008). Although NPOs are unlikely to “hide” their environmental efforts, their internal management practices such as ESM remain only partially visible from the outside. In addition, no systematic secondary data sets on ESM practices in Austrian SocS-NPOs currently exist, which limited the possibilities for triangulation through external data sources.

The final sample comprises 15 SocS-NPOs located in the following four provinces: Vienna, Lower Austria, Upper Austria and Styria. These are population-wise the biggest Austrian provinces. In addition, the sample includes two groups of SocS-NPOs: church-related NPOs (6 out of 15) with a faith-based orientation and secular NPOs (9). We expect these NPOs to see themselves as humanitarian and to consider socio-ecological justice important. The interviewees were members of the management of these SocS-NPOs and the persons responsible for their ESM. Data collection continued until thematic saturation was reached, i.e. until additional interviews no longer yielded any significant new insights into the motivations, practices and challenges associated with ESM. Table 3 also provides an overview of these two groups and displays the number of interviewees, the organization type, the approximate number of employees, the current CSRD reporting status (as of May 2026) and the duration of the interviews. Due to restrictions regarding research ethics, we do not disclose the names of the SocS-NPOs involved. To ensure anonymity, the participating organizations are labeled as “SocS-NPO 1–15.” If only one person was interviewed within an organization, quotations are attributed simply as “SocS-NPO X.” In cases where two individuals from the same organization participated, quotes are attributed as “SocS-NPO X, Interviewee 1” or “SocS-NPO X, Interviewee 2.”

Around one-third of the organizations are expanding their commitment to the triple bottom-line by incorporating the 17 Sustainable Development Goals (SDGs). To varying degrees, six out of the 20 interviewees emphasize their organizational intention to promote sustainable development and make a political commitment to the United Nations (UN) 2030 Agenda. Regarding the three pillars of sustainability, the interviewees viewed the social dimension as the essence of their organizations, rooted in their history and identity. It was highlighted as the most pronounced pillar of sustainability: “Social sustainability is the core of our organization. We are a humanitarian organization and not an environmental organization.” (SocS-NPO 15, Interviewee 1). Its importance stems from the legitimizing role of the social mission, which takes precedence over financial sustainability. The investigated NPOs are committed to providing safe, high-quality care to their clients while operating under strict financial constraints.

The financial dimension of sustainability is also a central element in all SocS-NPOs as they operate in a market environment and “[…] must be financially sustainable per se”(SocS-NPO 5, Interviewee 2). Ensuring financial sustainability is therefore a high priority for organizational viability.

Focusing explicitly on the environmental dimension is a more recent development: “For our organization, sustainability is a strategic business area and a cross-sectional field” (SocS-NPO 7). For two interview partners, this rationale finds support in the growing societal imperative to use the earth’s resources sustainably and, for six out of the 20 interviewees, the commitment to the planet or the preservation of creation. One church-affiliated SocS-NPO, for instance, refers to the papal encyclical Laudato Si’ to underline its commitment. Nevertheless, progress toward holistic ecological sustainability remains slow, as this quote illustrates: “It would be good if we could say that we are ecologically sustainable, but we are miles away from it” (SocS-NPO 10, Interviewee 1).

Regarding environmental sustainability, regulatory frameworks remain relatively new and less developed compared to the social and financial dimensions. While SocS-NPOs have begun, at least rhetorically, to link environmental concerns with their core values, it remains uncertain whether environmental sustainability will attain the same significance as the other two dimensions.

In summary, social sustainability clearly dominates the understanding of sustainability among the SocS-NPOs surveyed and is closely linked to their humanitarian mission and organizational identity, while financial sustainability is seen as a necessary prerequisite for the viability of the organization. Environmental sustainability is an emerging but still weakly institutionalized aspect. Although some SocS-NPOs are increasingly referring to the SDGs and committing to environmental obligations, concrete implementation remains limited.

Our interviewees mentioned a variety of motivations in response to our questions concerning the internal and external drivers for intensifying ESM efforts. One of the main external drivers is the climate crisis in all its facets. These range from extreme weather events at home and abroad to global droughts, water shortages, health impacts from increasing frequency of hot days and climate-related migration flows. The goal of climate neutrality creates pressure to commit to sustainability: “The political requirements are that we should achieve climate neutrality by 2045. And I would say that this is a task that is almost unmanageable, so there is no other way to approach the issue […]” (SocS-NPO 5, Interviewee 1). Beyond regulatory pressure, reducing energy costs and becoming CO₂-neutral are regarded as internal drivers of organizational change. Thus, increasing energy prices drive the promotion of sustainability as expressed by five interviewees, as well as EU regulations, most notably the CSRD 2022, which was mentioned explicitly by four interview partners. Exceptions apply to SocS-NPOs that operate as associations, corporations or do not meet the thresholds within their limited liability companies. Moreover, two interviewees mentioned regulatory influence by the EU Supply Chain Act and one interview partner referred to the EU Taxonomy Regulation, a core element of the European Green Deal, which were also considered as drivers.

In line with the social mission, eight out of the 20 interviewees highlighted their role model function in society; for example: “[…] it is a question of sustainability whether we take unemployed young people off the street and bring them to skilled work via qualification. That is socially sustainable […]” (SocS-NPO 5, Interviewee 2). Three interviewees also connect sustainability and their social positioning to regional development, labor market integration and inclusion and initiatives around diversity and gender mainstreaming. Eight out of the 20 study participants emphasized their commitment to building a fair, inclusive, environmentally and socially just society through high-quality service provision. Their respective mission statement is a “[…] self-committing norm and is already valid as an expectation of the employees and also toward clients […]” (SocS-NPO 2).

Key stakeholder groups are also considered to be (internal) drivers. Employees were mentioned as the most important group by 14 interviewees demanding stronger ESM. Closely related, reputation management and employer branding play a crucial role in attracting new, intrinsically motivated employees, which was mentioned by 12 interview partners. Seven informants explicitly pointed out that potential employees are an important internal driver. Many employees want to make a difference regarding sustainability, as this quote illustrates: “[…] I work for a company that organizes itself ecologically. And they are very happy to listen when we tell them what we are doing. So that’s a very clear motive that comes from the labor market from the young.” (SocS-NPO 15, Interviewee 1). The second most relevant internal stakeholder group is the owners’ representative bodies, though their importance is lower compared to employees.

Overall, the results show that the implementation or intensification of ESM in SocS-NPOs is driven by a combination of external pressure and internal motivations. The climate crisis proved to be the most important external driver. Internally, alignment with the social mission, perception of their role model function and, most importantly, employee expectations and employer branding considerations motivate SocS-NPOs to advance ESM.

Our analysis of informants’ reflections on the opportunities and challenges of implementing or intensifying ESM reveals significant opportunities for strategic positioning, particularly noted by six interview partners. One interviewee pointedly said: “Without sustainability there are no opportunities, with sustainability there is everything […]” (SocS-NPO 10, Interviewee 1). Two respondents emphasized that proactively positioning in terms of ecological sustainability can serve as a competitive differentiator and an important element of reputation and legitimacy management. One participant even framed sustainability initiatives as: “[…] Maybe it’s also a marketing opportunity […]” (SocS-NPO 1).

Furthermore, sustainability management is used as a valuable tool for employer branding. Given ongoing staff shortages, five interviewees perceive ESM as a key lever for attracting talent and ensuring medium- to long-term employee retention. Another opportunity, which was mentioned by three interview partners, represents awareness building among employees who are not yet actively concerned about ecological sustainability. A sense of global co-responsibility should be fostered, encouraging employees to integrate sustainable practices into both their professional and personal lives. As one interviewee explained: “[…] I see it as an opportunity for the employees, for whom it is a personal concern, to say yes, finally, and to say that we are basically working on our image because this is, so to speak, state of the art. But I don’t hope for too much from it.” (SocS-NPO 8). Another added: “[…] we are also allowed to use the company a bit to bring topics closer to people. […] And it is very important for us to engage people on this topic […]” (SocS-NPO 12).

Turning to the challenges, economic viability emerges for six respondents as a key obstacle in implementing ESM. One interviewee openly stated: “[…] in case of doubt, economic necessity trumps sustainability.” (SocS-NPO 5, Interviewee 1). Three interviewees were of the view that current public subsidies often fail to support green business transformation, while accounting logics and subsidy regulations largely determine pricing. High dependence on public funding persists, especially regarding long-term building costs, digital infrastructure, innovation and entrepreneurial risks. Four interviewees describe current public financing models as unsustainable and burdening future costs. As one participant said: “[…] We are not profit-oriented, but we cannot operate in areas that are permanently in deficit, we cannot stand that.” (SocS-NPO 6).

Overall, ecological transformation entails a lengthy organizational development process, posing yet another challenge for eight out of 20 interviewees. Informants noted, for instance: “[…] the challenge is really to get from wanting to implementing […]” (SocS-NPO 7) or “[…] You have to think very carefully about how to achieve that.” (SocS-NPO 4). Hence, framework conditions should make sustainability an advantage rather than a threat or burden.

In summary, the results show that intensifying ESM offers SocS-NPOs several strategic opportunities, particularly in terms of the organization’s positioning, its reputation and employer branding and internal employee awareness. At the same time, significant challenges remain: concerns about economic viability, limited public funds for green transformation and the high costs of organizational change processes. Overall, while ESM is seen as potentially beneficial, its implementation is severely constrained by financial and institutional conditions.

Table 4 integrates our key findings on sustainability perceptions, drivers, opportunities and challenges to provide a holistic overview of ESM implementation in SocS-NPOs.

Social and financial sustainability have a long tradition in SocS-NPOs. However, empirical insights into how SocS-NPOs integrate the environmental sustainability dimension as a relatively new requirement into their management practices remain limited. By linking sustainability perceptions, drivers, challenges and opportunities with an ILs’ perspective, this study contributes to addressing this gap.

The findings show that social sustainability remains the top priority, while financial sustainability ensures the economic viability of SocS-NPOs. Interviewees emphasized a clear focus on social and financial concerns, whereas environmental sustainability, though gaining attention, is still evolving. This result is consistent with prior research emphasizing that NPOs derive legitimacy primarily from their social purpose and value creation (Schröer and Jäger, 2015; Beer and Micheli, 2017). While financial sustainability is not an end in itself, it is a necessary boundary condition for organizational survival. This supports previous findings that NPOs must increasingly adopt business-like practices to remain economically viable (Bowman, 2011; Velandia et al., 2021).

In line with previous studies, environmental sustainability emerges as a comparatively recent and still weakly institutionalized concern in SocS-NPOs (Traxler et al., 2020; Ab Samad and Ahmad, 2022), despite the negative externalities that climate change has on the core production processes of SocS-NPOs and their range of services. Similar to findings by Bauer and Greiling (2024), environmental initiatives are often justified instrumentally, by linking them to cost savings, reputation or alignment with social values, rather than being treated as an autonomous strategic priority. Our findings extend this literature by showing that environmental sustainability is primarily framed as complementary to, rather than competing with, social mission fulfillment. This notion is supported by our finding that some SocS-NPOs justify their environmental initiatives on the basis of social imperatives or by religious orientations. SocS-NPOs positioning also reflects the tension between expanding sustainability agendas and resource constraints typical for service-oriented nonprofits.

The interviews revealed two external and two internal drivers for intensifying ESM in SocS-NPOs. The climate crisis emerged as the dominant external driver, while societal positioning (aligned with the social-welfare logic) and key stakeholder expectations also play a central role. Especially current and potential employees of SocS-NPOs were regarded as highly relevant and a key driver for advancing ESM within the limits of financial viability, whereas other external stakeholders were considered less important. This finding is consistent with prior both profit and nonprofit research emphasizing the growing importance of organizational mission alignment, internal stakeholder expectations and organizational sustainability in increasingly dynamic environments (Weerawardena et al., 2010; Broccardo and Mauro, 2024). Employees thereby appear to function as important carriers of environmental sustainability expectations within SocS-NPOs, shaping organizational responses to climate-related societal pressures from within.

Although EU environmental regulations were acknowledged, the impact of these regulations was perceived as less important for SocS-NPOs. This finding contrasts with evidence from the for-profit sector, where regulatory requirements have been shown to strongly influence sustainability reporting and management systems (Schaltegger and Hörisch, 2017), suggesting a delayed or moderated regulatory impact in the nonprofit context. Our findings therefore suggest that regulation in the nonprofit sector is delayed, has an indirect effect or takes a less stringent form, which may be attributable to a lighter regulatory burden due to resource constraints and the mission-oriented focus of NPOs (Eikenberry and Kluver, 2004; Weerawardena et al., 2010).

The overall impression was that most SocS-NPOs are not yet fully prepared to meet CSRD requirements. At the time of the interviews, 14 participating organizations that exceeded the reporting thresholds (either as a whole or through parts of their entities structured as nonprofit limited liability companies) had to comply with CSRD requirements. However, in February 2025, the European Commission responded to implementation problems with the so-called Omnibus I proposal: the threshold for reporting requirements was raised to 1,000 employees and the scope of the information to be provided significantly reduced (European Commission, 2025). In terms of size, however, 11 out of 15 Austrian SocS-NPOs examined are still subject to the CSRD reporting requirements, even though the Omnibus package provides for a two-year postponement (status May 2026). At the time of the interviews, green finance regulations did not play a prominent role in securing funding for greening buildings. So far, Austrian public funders have not systematically linked funding to green investments (with the minor exception of some short-term niche programs).

The findings show that strategic positioning is closely tied to employer branding, as sustainability can enhance attractiveness in the labor market and thus aligns with business logic emphasizing competitiveness and long-term organizational viability. This finding resonates with prior research suggesting that sustainability-related organizational practices increasingly contribute to employees’ search for meaningful work and organizational identification (Aguinis and Glavas, 2019). Awareness-building for a fair and just world resonates with the societal positioning of nonprofits. Practices such as energy conservation, waste reduction and ethical procurement allow SocS-NPOs to demonstrate commitment to environmental sustainability to their stakeholders in their daily operations.

However, implementing ESM requires significant resources. This is difficult for several reasons. First, Austrian SocS-NPOs rely heavily on public funding, which rarely includes an earmarked part for green transformation. This reflects broader resource dependence dynamics in NPOs, where external funding structures strongly shape strategic priorities and organizational capacity development (Froelich, 1999). Second, the willingness of most beneficiaries (clients or customers) to cover ecological surcharges is limited (if at all viable). To move beyond the level of organizational internal awareness building for green transformation, a time- and resource-intensive organizational change process is necessary. Third, the establishment of an ESM demands restructuring processes within SocS-NPOs. This naturally needs resources and that is a challenge in most NPOs. The implementation of an ESM must be economically viable. In addition, the organizational development process itself is also a major challenge for several reasons. First, SocS-NPOs may not have the internal expertise and capacity to implement ESM effectively. Developing internal expertise or hiring external support can be costly (and may not be feasible, given budget constraints). Second, ESM implementation may require cultural changes within the organization. Prior research on organizational change highlights that resistance to change, lack of acceptance from employees and other stakeholders and limited organizational readiness can significantly hinder transformation processes (Armenakis and Bedeian, 1999; Weiner, 2009). Third, SocS-NPOs are typically driven by their social mission in line with a social-welfare logic and thus focus on providing services to solve specific social problems. Implementing ESM may require a shift in focus or additional capacity building efforts to integrate environmental sustainability practices without losing sight of the organization’s core mission. This reflects broader tensions associated with hybrid organizing and the risk of mission drift when organizations balance multiple institutional demands and competing priorities (Jones, 2007; Battilana and Lee, 2014). Allocating funds to sustainability initiatives can compete with other important programs, making it difficult to prioritize ecological sustainability efforts. Finally, this organizational development process in turn requires resources, which brings us back to the point of economic viability.

From a theoretical point of view, our findings provide insights regarding the relevance of the three logics. Consistent with earlier work on institutional complexity in NPOs (Beer and Micheli, 2017; Woodside, 2018), social-welfare logic remains dominant, shaping how the relevance of the environmental sustainability dimension is interpreted and engagement in ESM justified. This finding is also in line with prior literature, showing that social mission and value creation typically remain central reference points despite increasing managerial and external pressures (Battilana and Lee, 2014; Pache and Santos, 2013).

The social-welfare logic reflects the tradition, identity and societal mandate of SocS-NPOs. They boast a rich heritage in serving their communities and this deep-rooted history underscores their strong and enduring commitment to upholding the social and charitable values that drive their mission. Based on our findings, business logic follows, shaped by decades of NPM and managerialism. Regarding the relationship between the social-welfare and the business logic, the answers were not so clear if we look at the financial bottom line as an essential requirement for organizational survival. Our findings do not indicate that the business logic was prioritized over the social-welfare logic, but the interviewees stressed in varying degrees their limits on subsidizing services that do not cover financial costs, despite the growing demand for many social services in their portfolio (e.g. providing care for children and adults of all age groups, psychological counseling, support for those in poverty or the homeless). Therefore, there are clear signs that financial sustainability acts as a constraining boundary condition for the social-welfare logic. This reflects broader findings in nonprofit research emphasizing that managerial and financial pressures increasingly shape organizational decision-making processes without fully displacing mission-oriented priorities (Eikenberry and Kluver, 2004; Suykens et al., 2023). Despite being driven by a social mission, the necessity of a robust business logic cannot be overstated in SocS-NPOs′ quest for financial sustainability, which is essential for achieving their objectives and efficiently fulfilling their mission to benefit their constituents. By using business principles, SocS-NPOs aim to maximize their social impact while ensuring financial sustainability (cf. Maier et al., 2016).

Regarding the tightening environmental regulations as a new facet of the government logic, the answers of our interviewees were much more straightforward, especially with regard to their positioning. Here, their organizational identity and tradition in line with the social-welfare logic were stressed. Quotes that they are a social service provider and not an environmental advocacy non-governmental organization clarify the prioritization between the social-welfare and government logic. ESM is seen more as an additional prerequisite for social value creation and mission fulfillment. Their answers regarding strategic positioning and employer branding indicate a managerial twist in SocS-NPOs’ pursuit of environmental sustainability.

The order between the business logic and government logic is also quite obvious when it comes to ecological matters. Financial viability was emphasized again and again. This suggests that SocS-NPOs’ management has focused on the low-hanging fruit of environmental sustainability, where ecological improvements and economic efficiency go hand in hand. For example, energy-efficient buildings and operations can reduce electricity bills, whereas waste-reduction measures can reduce disposal costs. These savings can free up resources to support the SocS-NPOs’ mission-related core activities. Such practices reflect a business-case approach to sustainability management, where environmental initiatives are prioritized when they align with economic efficiency and organizational resilience (Schaltegger and Hörisch, 2017). Harvesting low-hanging fruits is an approach that works in the short run, but underinvesting in green transformation could become a financial liability in the medium and long run (if, for example, public funding is linked to ESM, which can reasonably be expected in EU countries). Although the SocS-NPOs have recognized that establishing ESM can indeed bring some advantages, the challenges, especially the costs and resource requirements, so far seem to still outweigh the benefits.

In recent years, sustainability has gained increasing importance within the EU, which also affects the nonprofit sector. Approximately one-third of the investigated SocS-NPOs have integrated the 17 SDGs into their strategies, aligning themselves with the UN 2030 Agenda. The findings show that social sustainability remains the core focus of SocS-NPOs, reflecting their founding missions, while financial sustainability ensures organizational viability. Although environmental sustainability is perceived as important, it continues to receive less attention.

The main drivers of ESM adoption are external factors, particularly stricter EU regulations and the global climate crisis. For SocS-NPOs, intensifying ESM offers opportunities to strengthen stakeholder relationships, enhance long-term viability and potentially reduce costs. Nevertheless, implementation faces substantial challenges, including financial constraints, limited internal expertise and potential cultural resistance. While the activities of SocS-NPOs are primarily guided by social-welfare logic, business logic is increasingly relevant for enabling sustainable practices, highlighting the ongoing challenge of balancing social, financial and environmental objectives.

For SocS-NPOs’ management, the findings underscore the need to embed more strategically the environmental dimension into social and financial goals. Building internal expertise, implementing step-by-step approaches and leveraging business logic can strengthen long-term financial viability. Internal collaboration can further facilitate the effective implementation of ESM under resource constraints. For policymakers, the findings highlight the importance of aligning sustainability expectations with adequate support structures and funding mechanisms. In particular, pilot green transition funds for nonprofit organizations could support initial investments in energy-efficient infrastructure, sustainability training, environmental reporting capacities and organizational transformation processes. In addition, environmental sustainability criteria should be integrated gradually into public funding and performance-based contracting schemes to avoid creating unfunded mandates for resource-constrained organizations. Policymakers could also promote sector-wide learning and cooperation through shared sustainability advisory services, training initiatives and collaborative platforms that enable SocS-NPOs to exchange expertise and jointly develop ESM capacities.

This study makes several contributions to research and practice. First, it advances empirical knowledge on nonprofit sustainability by showing that ESM in SocS-NPOs remains at an early and uneven stage of development. The findings demonstrate that the integration of the three sustainability dimensions is pragmatic but imbalanced, with environmental concerns currently subordinated to social mission fulfillment and financial viability. By empirically documenting how environmental sustainability is interpreted and operationalized in organizations whose primary mandate lies outside environmental advocacy, the study addresses a significant gap in nonprofit research. Second, the study contributes theoretically by extending institutional logics research to the domain of nonprofit sustainability management. The findings illustrate how social-welfare, business and government logics jointly shape organizational responses when environmental sustainability emerges as an additional institutional demand. In particular, the results show that financial sustainability functions as a boundary condition for environmental engagement, while social-welfare logic continues to define organizational identity and legitimacy. This provides new insights into how these organizations reconcile competing institutional pressures under conditions of increasing complexity. Third, the study contributes to ongoing policy debates on nonprofit sustainability. The findings highlight that ESM requirements introduced through regulatory initiatives, such as EU sustainability reporting frameworks, interact with welfare arrangements and funding structures that were historically designed around social service provision rather than ecological transformation. The results therefore underline that policy ambitions for environmental sustainability may remain limited unless regulatory expectations are aligned with funding mechanisms and organizational capacities in the nonprofit sector. By revealing how SocS-NPOs pragmatically respond to regulatory pressures, the study provides insights relevant for policymakers and public funders seeking to design sustainability policies that are both effective and feasible. Finally, although grounded in the Austrian context, the findings offer broader relevance for SocS-NPOs operating in similar welfare regimes and institutional environments. Organizations facing comparable regulatory pressures and stakeholder expectations may encounter similar tensions when integrating environmental sustainability and related ESM practices into established social service missions and organizational activities. The study also opens up several avenues for future research. First, further conceptual and empirical work is needed on the role of environmental sustainability as a relatively new coercive pressure in SocS-NPOs, particularly on how it interacts with established social and economic logics over time. Second, comparative studies across different national and welfare state contexts, both within and outside the EU, could shed light on how regulatory frameworks and funding arrangements influence the adoption of ESM in SocS-NPOs. Third, longitudinal studies would be particularly valuable in capturing the dynamic evolution of ESM practices and assessing the long-term effects of evolving sustainability regulations and policy interventions. Fourth, future research could further explore potential differences between church-related and secular SocS-NPOs, particularly with regard to how institutional logics and organizational identity shape the adoption and implementation of ESM practices. Our study did not identify systematic differences between these groups, possibly because both face similar funding pressures, accountability demands and other challenges. However, given the limitations of our qualitative data set, it cannot be ruled out that such differences exist, making this a promising avenue for future quantitative research.

These limitations include constraints related to sample size, study period and geographical scope, as the focus is exclusively on Austrian SocS-NPOs. Furthermore, social desirability bias may have affected interview responses and the coding process is prone to subjectivity. Although we reached a satisfactory level of saturation through 15 interviews, concerns regarding sample representativeness cannot be ruled out. Furthermore, the coding process is prone to subjectivity. No systematic secondary data sets on ESM practices in Austrian SocS-NPOs currently exist, limiting the possibilities for triangulation through external data sources. In addition, the evolving regulatory environment regarding EU sustainability reporting requirements represents a further limitation. During the paper revision process, the proposed EU Omnibus package introduced discussions about raising the CSRD reporting threshold to organizations with more than 1,000 employees. Eleven of the 15 organizations included in the sample would still exceed the proposed threshold and would therefore remain subject to CSRD reporting obligations if the proposal were implemented, while four organizations would fall below the threshold.

Philumena Bauer is based at Institute of Management Accounting, Johannes Kepler University Linz, Linz, Austria.

Dorothea Greiling is based at Institute of Management Accounting, Johannes Kepler University Linz, Linz, Austria.

Sandra Stötzer is based at Institute of Public and Nonprofit Management, Johannes Kepler University Linz, Linz, Austria.

1. Please describe your basic perception of sustainability.

2. Why, and since when, has the organization you work for been addressing the issue of environmental sustainability?

• What external drivers or motives can be identified for implementing environmental sustainability management?

• What internal drivers or motives can be identified for implementing environmental sustainability management?

3. What opportunities and challenges do you see for the organization when implementing environmental sustainability management?