The Impact of Sustainability Practices on Corporate Financial Performance: Literature Trends and Future Research Potential

By A. Alshehhi, Haitham Nobanee, Nilesh Khare. 2018

514 citations recorded by the source corpus.

This paper presents an analysis of the literature concerning the impact of corporate sustainability on corporate financial performance. The relationship between corporate sustainable practices and financial performance has received growing attention in research, yet a consensus remains elusive. This paper identifies developing trends and the issues that hinder conclusive consensus on that relationship. We used content analysis to examine the literature and establish the current state of research. A total of 132 papers from top-tier journals are shortlisted. We find that 78% of publications report a positive relationship between corporate sustainability and financial performance. Variations in research methodology and measurement of variables lead to the divergent views on the relationship. Furthermore, literature is slowly replacing total sustainability with narrower corporate social responsibility (CSR), which is dominated by the social dimension of sustainability, while encompassing little to nothing of environmental and economic dimensions. Studies from developing countries remain scarce. More research is needed to facilitate convergence in the understanding of the relationship between corporate sustainable practices and financial performance.

Subfields: Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/64654948957c6bcdd971a91cc2c16899644d129f

How researchers see this paper

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In Marketing

1. D. Zainal
2. Sayema Sultana
3. Mansi Jain
4. Norhayah Zulkifli
5. Gagan Deep Sharma
6. Mrinalini Srivastava

In Strategy and Management

1. Ionica Oncioiu
2. D. Zainal
3. Sayema Sultana
4. Camelia Oprean-Stan
5. Sebastian-Emanuel Stan
6. Mansi Jain
7. Norhayah Zulkifli
8. Iulia Iuga

Citations in the corpus

• Impact of Sustainability Reporting and Inadequate Management of ESG Factors on Corporate Performance and Sustainable Growth (2020, background): “As mentioned, most of the specialist literature has focused on the causality between sustainability performance and financial performance; for example, the effect of corporate sustainability on financial results [17,18], the connection between sustainability performance and firm performance [19], th”
• Can Sustainable Investment Yield Better Financial Returns: A Comparative Study of ESG Indices and MSCI Indices (2019, methodology): “A recent study by Alshehhi et al. (2018) use content analysis to examine the literature concerning the impact of corporate sustainability on corporate financial performance and find that 78% of the publications opine a positive relationship between corporate social responsibility and financial perfo”
• Environmental, Social and Governance (ESG) and Investment Decision in Bangladesh (2018, background): “approach of sustainability is related to risk reduction [57].”