Integrating operations and finance for sustainable development: Theory,practice,and opportunities

Abstract

Sustainable development demands addressing two core challenges: mobilizing financial resources and aligning stakeholder incentives. This article surveys the operations-finance interface literature through the lens of “Mobilizing Resources” and “Aligning Incentives” framework. We highlight how the literature advances our knowledge of mitigating SME financing constraints and crafting operationally-informed financial contracts to internalize externalities. We identify a critical gap: while theoretical models for incentive alignment are well-established, empirical evidence remains limited due to the difficulty of analyzing unstructured data. To bridge this gap, we present large language models (LLMs) as a rigorous methodological toolkit for empirical operations management research. We outline a four-step framework—Problem Definition, Model Selection, Prompt Engineering, and Validation—and illustrate its application via a case study that extracts novel data on supplier finance programs from corporate 10-K filings. We conclude by proposing a unified research agenda to advance future research at the intersection of operations, finance, and sustainability.