Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations [Book Review]
Journal of Business Ethics 108 (1):61-79 (2012)
Abstract |
Sustainability is concerned with the impact of present actions on the ecosystems, societies, and environments of the future. Such concerns should be reflected in the strategic planning of sustainable corporations. Strategic intentions of this nature are operationalized through the adoption of a long-term focus and a more inclusive set of responsibilities focusing on ethical practices, employees, environment, and customers. A central hypothesis, that we test in this paper is that companies which attend to this set of responsibilities under the term superior sustainable practices, have higher financial performance compared to those that do not engage in such practices. The target population of this study consists of the top 100 sustainable global companies in 2008 which have been selected from a universe of 3,000 firms from the developed countries and emerging markets. We find significant higher mean sales growth, return on assets, profit before taxation, and cash flows from operations in some activity sectors of the sample companies compared to the control companies over the period of 2006–2010. Furthermore, our findings show that the higher financial performance of sustainable companies has increased and been sustained over the sample. Notwithstanding sample limitation, causal evidence reported in this paper suggests that, there is bi-directional relationship between corporate social responsibilities practices and corporate financial performance.
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Keywords | Environment Ethics Diversity Performance Sustainability |
Categories | (categorize this paper) |
ISBN(s) | |
DOI | 10.1007/s10551-011-1063-y |
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References found in this work BETA
Value Maximization, Stakeholder Theory, and the Corporate Objective Function.Michael C. Jensen - 2002 - Business Ethics Quarterly 12 (2):235-256.
Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility.Michael L. Barnett - 2005 - Proceedings of the International Association for Business and Society 16:287-292.
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Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index.M. Victoria López, Arminda Garcia & Lazaro Rodriguez - 2007 - Journal of Business Ethics 75 (3):285-300.
The Impact of Corporate Social Responsibility on Consumer Trust: The Case of Organic Food.Sergio Pivato, Nicola Misani & Antonio Tencati - 2008 - Business Ethics, the Environment and Responsibility 17 (1):3–12.
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Citations of this work BETA
In Search of the Dominant Rationale in Sustainability Management: Legitimacy- or Profit-Seeking?Stefan Schaltegger & Jacob Hörisch - 2017 - Journal of Business Ethics 145 (2):259-276.
The Long-Term Sustenance of Sustainability Practices in MNCs: A Dynamic Capabilities Perspective of the Role of R&D and Internationalization. [REVIEW]Subrata Chakrabarty & Liang Wang - 2012 - Journal of Business Ethics 110 (2):205-217.
Motives and Performance Outcomes of Sustainable Supply Chain Management Practices: A Multi-Theoretical Perspective.Antony Paulraj, Injazz J. Chen & Constantin Blome - 2017 - Journal of Business Ethics 145 (2):239-258.
The Heterogeneity of Board-Level Sustainability Committees and Corporate Social Performance.Udi Hoitash, Rani Hoitash & Jenna Burke - 2019 - Journal of Business Ethics 154 (4):1161-1186.
Are the Quantity and Quality of Sustainability Disclosures Associated with the Innate and Discretionary Earnings Quality?Ling Tuo & Zabihollah Rezaee - 2019 - Journal of Business Ethics 155 (3):763-786.
View all 13 citations / Add more citations
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