ORBANA: the Kauno kolegija project reshaping corporate perspectives on sustainability

Until recently, corporate sustainability was widely regarded as a matter of reputation and public relations. Today, it has become a tangible figure on financial statements. What truly drives value: cutting-edge technology, a responsible approach to Environmental, Social, and Governance (ESG) criteria, or perhaps a strategic combination of the two?

Seeking answers to these questions is ORBANA, a project initiated by Kauno kolegija Higher Education Institution and funded by the Research Council of Lithuania, which launched on 1 December 2025. The project is headed by Dr Aistė Lastauskaitė, Vice Dean for Science at the Faculty of Business.

At the heart of the project is the interplay between two critical business drivers: digitalisation and ESG principles – factors that increasingly dictate investor and client expectations. Preliminary findings suggest that the answer may not be quite what businesses anticipate.

Digitalisation and sustainability: two sides of the same coin

Four experts are contributing to the project: alongside the lead researcher, Dr A. Lastauskaitė, are Dr Raminta Vaitiekūnienė, Dr Inga Kartanaitė, and Dr Algirdas Justinas Staugaitis. With extensive experience spanning finance, econometrics, and sustainability, the team’s collective input is vital to the project’s success.

The primary objective of ORBANA is to evaluate how digitalisation and ESG commitments influence corporate financial performance. Dr A. Lastauskaitė stresses that these factors must be analysed in tandem, particularly as businesses navigate the complexities of simultaneous digital and green transitions.

‘Digitalisation and ESG commitments have long been analysed as two separate paths. However, we are seeing that such a view no longer reflects the actual logic of corporate transformation. Our project operates on the premise that these factors are interdependent and mutually reinforcing,’ says Dr A. Lastauskaitė.

Digital technologies enable companies to implement ESG principles more effectively by monitoring CO₂ emissions, ensuring transparent reporting, and optimising supply chain management.

‘At the same time, ESG commitments drive the need for further digitalisation; without robust data and technology, sustainability goals remain merely performative. Our empirical results indicate that the synergy between digitalisation and ESG is the primary driver of improved financial performance, rather than either factor in isolation,’ she explains.

ESG: beyond public relations

ESG is a commitment to operating responsibly: reducing environmental impact, supporting employees and society, and ensuring transparent, ethical governance. Increasingly, these criteria are becoming prerequisites for securing financing and establishing partnerships. Dr A. Lastauskaitė highlights that ESG has a tangible impact on the bottom line.

‘While this aspect is often associated with reputation or social responsibility, our research clearly demonstrates its economic dimension. Sustainable practices can reduce operating costs, improve resource efficiency, broaden access to capital, and bolster investor confidence,’ notes Dr A. Lastauskaitė.

She further points out that companies effectively managing their environmental impact tend to exhibit lower risk profiles and more stable cash flows.

‘In the ORBANA project, we quantify these relationships using metrics such as Return on Assets (ROA), EBITDA, and Tobin’s Q. This transitions ESG from a ‘soft’ reputational category into the realm of clearly measurable financial value creation,” the project lead explains.

Keeping pace with change pays off

Dr A. Lastauskaitė says that the greatest risk today is not in investing in sustainability, but rather in failing to do so. This is the core message of the project.

‘This conclusion is supported by specific economic mechanisms. Businesses that ignore ESG face various hurdles, from rising regulatory costs to the pressures of carbon pricing. This, in turn, leads to reputational damage and diminished investor trust,’ says the Kauno kolegija researcher.

She notes that the team’s research shows a direct correlation between high carbon intensity and lower profitability and company value: ‘In other words, environmental inefficiency becomes a financial burden that undermines competitiveness and long-term resilience.’

Dr A. Lastauskaitė emphasises that companies proactively adapting to change by integrating ESG principles and digital technologies gain tangible benefits: ‘Greater attractiveness to investors opens up new revenue opportunities and ensures long-term stability in rapidly evolving markets.’

A unique regional perspective

ORBANA stands out not only for its evaluation of the impact of digitalisation and ESG but also for demonstrating that this relationship is not uniform across Europe.

‘Our findings revealed a clear regional divide. In Western Europe, the synergy between digitalisation and sustainability creates significant financial value. In Eastern Europe, however, this effect is not yet statistically significant. This suggests that ESG or digital initiatives alone are insufficient; their impact depends on the broader institutional and technological context,’ says Dr A. Lastauskaitė.

This insight provides a deeper understanding of why sustainability strategies yield tangible financial gains in some markets while still emerging as a long-term value-creation driver in others.

Strengthening international cooperation

When asked about the project’s long-term significance, Dr A. Lastauskaitė is certain it is vital for both Kauno kolegija and Lithuania, particularly amidst growing competition for research funding and international projects.

‘I have no doubt that ORBANA has a significant impact on our institution and the wider Lithuanian scientific and business landscape. It strengthens our research potential and places Kauno kolegija firmly within the context of international empirical research. It also helps us expand our collaboration with national and international partners, such as Kaunas University of Technology, the University of Groningen in the Netherlands, the University of Campania Luigi Vanvitelli in Italy, and the University of La Laguna in Spain,’ the researcher says.

According to Dr A. Lastauskaitė, the project also delivers practical value by providing evidence-based insights for companies, investors, and policymakers: ‘The knowledge generated here will ensure sustainability and enhance the resilience of European businesses against the challenges of the future.’