Is There Any Economic Penalty for Sustainability? A Difference-in-Differences Analysis of Italian Wineries

Amid increasing pressure on sustainability across sectors, the wine industry is also being called to adopt sustainable and responsible practices. However, a potential concern for firms is whether and to what extent sustainability efforts, while beneficial for the environment and society, require some sacrifice on the economic side. Specifically, this study investigates whether adopting a holistic sustainability approach by wine firms leads to economic issues in the short term. We focus on Italian wineries certified under Equalitas certification, a three-pillar certification integrating environmental, social, and economic dimensions, and evaluate their financial performance using a difference-in-differences (DiD) approach. The analysis relies on firm-level economic data from the AIDA database, covering a sample of 631 companies observed over a six-year period from 2018 to 2023. Overall, the results show no statistically significant short-term changes in profitability or liquidity indicators across the entire sample. These findings suggest that, while short-term economic gains are not guaranteed, embarking on a sustainability path does not undermine financial performance and may offer benefits under certain organizational conditions. The study contributes to the literature by providing robust empirical evidence on the economic implications of the adoption holistic sustainability approaches in the wine sector.