INVESTIGATING THE RELATIONSHIPS AMONG THE THREE DIMENSIONS OF CORPORATE SUSTAINABILITY PERFORMANCE

Abstract

The concepts of corporate sustainability performance (CSP) calls for a
convergence between the three overlapping aspects: economic development,
social equity, and environmental protection. Integration of sustainable business
practices (SBPs) (i.e. economic, environmental and social) in businesses has
gained extensive attention in recent times owing to the escalating pressures
from different stakeholder groups. To investigate this phenomenon, this study
developed a conceptual framework to explore the impact of environmental
and social performance on a firm’s economic bottom line, based on a largescale
questionnaire survey in the Bangladeshi RMG industry. A total of 255
responses were analyzed using Structural Equation Modelling (SEM) to identify
the relationships among the different performance dimensions of CSP. This
study confirmed that there is a positive impact of both environmental and social
performance on economic performance. It is worth noting that environmental
performance has a more significant positive effect on a firm’s financial
performance than social performance. The results of this study offer valuable
insights into the managerial decision-making process by informing corporate
managers, as well as policymakers, the interlink among all three dimensions and
how the improved environmental and social performances positively influence a
firm’s economic performance.