The impact of sustainability practices on companies’ financial performance and value creation
DOI:
https://doi.org/10.11606/issn.1982-6486.rco.2024.220597Keywords:
Sustainability practices, ESG, Financial performance, Value creation, Hierarchical linear modelingAbstract
Companies, markets, governments, and society in general have shown a growing interest in sustainability topics. However, the economic viability of these practices by companies is still controversial. Some studies confirm its positive impact on companies’ financial performance and value. Others highlight the high costs of its implementation, without a compensatory benefit. Furthermore, the level of countries’ development has a moderating effect on the adoption of these practices by organizations. Therefore, this study aims to evaluate the impact of sustainable practices on the financial performance and value creation of companies, considering the moderating effect of the countries’ level of development. We analyzed, 355,416 observations from 2,509 companies located in 4 developed countries and 5 key partners of the Organisation for Economic Cooperation and Development. The data was obtained from the Bloomberg, Capital IQ, and World Bank databases for the period from 2010 to 2022. The verification of these objectives was carried out via a hierarchical linear model or multilevel regression with panel data. As a result, there is confirmation of the positive impact of sustainable practices in adding value and improving the financial performance of organizations, especially for those located in emerging countries.
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