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Business Sustainability and Its Effect on Performance Measures: A Comprehensive Analysis

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  • Raquel Pérez Estébanez

    (Department of Accounting and Finance, Universidad Complutense de Madrid, 28040 Madrid, Spain)

  • Francisco Javier Sevillano Martín

    (Department of Accounting and Finance, Universidad Complutense de Madrid, 28040 Madrid, Spain)

Abstract

In recent years, businesses have faced growing pressures from stakeholders, including investors, customers, and regulators, to adopt sustainable practices. These pressures stem from the global focus on environmental, social, and governance (ESG) criteria and their association with risk management and corporate resilience. As a result, understanding the connection between sustainability and performance indicators, such as return on equity (ROE) and return on assets (ROA), is crucial to determine whether sustainable practices positively influence financial outcomes or primarily serve to address external expectations. This study seeks to bridge the gap between theoretical frameworks and empirical evidence by employing a rigorous methodological approach—Structural Equation Modeling (SEM)—to assess the impact of sustainability practices on key performance measures. The inclusion of a diverse range of industries from the US and Europe enhances the relevance of the findings, as it facilitates their generalization across developed economies where sustainability initiatives are highly prioritized. Our results are consistent with prior research demonstrating a positive relationship between sustainability and financial performance, particularly in high-development contexts over a medium-term period. These findings carry important implications for managers and policymakers, emphasizing that sustainability is not a compromise but a catalyst for economic and financial profitability. This study contributes to the literature by illustrating how sustainability can simultaneously advance ethical objectives and enhance financial performance, establishing it as a critical area of focus for both academics and practitioners.

Suggested Citation

  • Raquel Pérez Estébanez & Francisco Javier Sevillano Martín, 2025. "Business Sustainability and Its Effect on Performance Measures: A Comprehensive Analysis," Sustainability, MDPI, vol. 17(1), pages 1-15, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:1:p:297-:d:1559357
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    References listed on IDEAS

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    Cited by:

    1. Joan R. Sanchis & Vanessa Campos & Ana T. Ejarque, 2025. "A Proposed Typology for the Validation of Corporate Sustainability," Sustainability, MDPI, vol. 17(16), pages 1-23, August.

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