Economics
  • ISSN: 2155-7950
  • Journal of Business and Economics

The Corporate Sustainability Performance — Financial Performance

Link Revisited

 
 
Egbert Dommerholt
(Hanze University of Applied Sciences, Netherlands)
 
 
Abstract: Ever since the mid-1970s a multitude of studies linking corporate sustainability performance (CSP) measures and financial performance measures have been conducted. Studies accentuating the CSP-FP link indicate that high CSP not necessarily results in high FP; overall, the results are inconclusive and ambiguous at best. Until today a plethora of corporate sustainability performance measures have been developed, yet a universally accepted CSP construct does not (yet) exist. Furthermore, these measures lack sufficient theoretical underpinning. Consequently, any CSP measure should be considered conceptually flawed. This paper posits that CSP measures signal organizational culture, suggesting that a values-driven organizational culture results in high CSP and FP simultaneously. If so, managers should not focus on increasing CSP to boost FP, but create a “high” culture for sustainability. The investment community can also improve its decision making processes by including CSP measures that reflections of a “high” organizational culture for sustainability.
 
 
Key words: corporate sustainability performance; corporate sustainability measures; organizational culture;
corporate values
 
JEL codes: M29; G39




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