Measuring Corporate Sustainability Performance and Its Impact on Corporate Financial Performance

2005 ◽  
pp. 51-70 ◽  
Author(s):  
Thilo Goodall
Keyword(s):  
Financial Performance ◽  
Corporate Sustainability ◽  
Corporate Financial Performance ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance

scholarly journals Relationship between corporate sustainability performance and corporate financial performance: evidence from U.S. companies

Equilibrium ◽  
2021 ◽  
Vol 16 (4) ◽  
pp. 885-906
Author(s):  
Agnieszka Matuszewska-Pierzynka
Keyword(s):  
Financial Performance ◽  
Empirical Research ◽  
Empirical Studies ◽  
Corporate Sustainability ◽  
Value Added ◽  
Corporate Financial Performance ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
The Relationship ◽  
A Company

Research background: Sustainable development at the enterprise level is understood as the integration of economic, environmental and social dimensions aimed at meeting the needs of all firm?s stakeholders in the present and in the future. Therefore, it is crucial to evaluate the relationship between economic, environmental and social sustainability performance of a company and its financial performance. Purpose of the article: Considering the business model for sustainability as well as the debatable results of empirical research on the relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP), the essential aim of the paper is to answer the question whether the improvement of corporate sustainability performance in its all particular dimensions brings about higher total revenues (TR) of a company. Methods: The main method of empirical research is panel regression models based on Cobb-Douglas production function, which has been extended to include variables of corporate sustainability scores. The selection between pooled OLS model, random-effects model and fixed-effects model has been made with the use of the F test, the Breusch-Pagan test and the Hausman test. Additionally, descriptive statistics and the Pearson correlation coefficients have been analyzed. The empirical studies were conducted in the period 2014?2019 among the 59 largest U.S. companies listed in the Fortune 500 ranking between 2015?2020. Findings & value added: The research hypothesis assuming the existence of positive relationship between corporate sustainability performance (CSP) at both aggregate and disaggregate levels and corporate financial performance (CFP) expressed by TR cannot be positively verified. It means that the improvement of corporate sustainability performance in environmental, social and governance dimensions does not lead to an increase in TR of a company, as some empirical studies suggest.

scholarly journals CORPORATE SUSTAINABILITY PERFORMANCE AND FINANCIAL PERFORMANCE: MODERATING EFFECT OF BOARD COMPOSITION

2021 ◽  
Vol 4 (2) ◽  
pp. 245-256
Author(s):  
Ferina Nurlaily ◽  
Ahadiyah Adinia Rahmi
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Corporate Sustainability ◽  
Linear Regression Analysis ◽  
Moderating Effect ◽  
Independent Directors ◽  
Sustainability Performance ◽  
Female Directors ◽  
Corporate Sustainability Performance ◽  
Study Results

This study analyzes the moderating effect of the composition of female directors and the composition of independent directors on CSP and ROA. The purpose of this study is to analyze the effect of the disclosure of Corporate Sustainability Performance (CSP) on the Return on Assets (ROA) as a proxy for the company's financial performance. The population of this study is companies listed on the SRI-KEHATI index during the period November 2016– October 2019. The research hypotheses were tested using linear regression analysis and moderated regression analysis. The study results found that CSP has a significant effect on the company's ROA. The better and more complete the CSP disclosure, the higher the ROA. Furthermore, the composition of female and independent directors does not significantly affect CSP on corporate financial performance. This study implies that female directors and the composition of the independent board are more for compliance with regulatory requirements.

Which Factors Moderate the Relationship between Sustainability Performance and Financial Performance? A Meta-Analysis Study

2015 ◽  
Vol 15 (1) ◽  
pp. 1-15 ◽  
Author(s):  
Wenxiang (Lucy) Lu ◽  
Martin E. Taylor
Keyword(s):  
Financial Performance ◽  
Sample Size ◽  
Environmental Sustainability ◽  
Meta Analysis ◽  
Corporate Sustainability ◽  
Total Sample ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Long Run ◽  
The Relationship

ABSTRACT The relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP) has long been debated. Ullman (1985) pointed out that the conflicting results could be influenced by many factors, such as sample size, industrial context, inconsistent measurement of CSP and CFP, research methodologies, and procedures for data collection and analysis. This paper addresses Ullman's (1985) concerns by providing a more methodologically rigorous review of the CSP-CFP relationship than prior research studies. A meta-analysis of 198 studies yields a total sample size of 31,514 observations. The meta-analytic findings suggest that sustainability performance likely increases a firm's financial performance, especially in the long run. Compared to social sustainability, environmental sustainability, to a larger extent, contributes to the positive CSP-CFP relationship. In addition, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based indicators. Multi-industry, pre-2000 studies, and non-U.S. sample firms seem to show a stronger impact on the positive relationship between CSP and CFP than other sample indicators. A final finding is that the methodology used in the analysis has a significant impact on the results.

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