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Measuring causal relations and identifying critical drivers for corporate sustainability: the quadruple bottom line approach

Pornanong Budsaratragoon (Chulalongkorn Business School, Chulalongkorn University, Bangkok, Thailand)
Boonlert Jitmaneeroj (School of Business, University of the Thai Chamber of Commerce, Bangkok, Thailand)

Measuring Business Excellence

ISSN: 1368-3047

Article publication date: 3 October 2019

Issue publication date: 15 October 2019

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Abstract

Purpose

The purpose of this study is to investigate the causal interrelations among the four pillars of corporate sustainability, which indicate a firm’s contribution to environmental, social, governance and economic activities. Moreover, this study identifies the critical drivers of corporate sustainability by focusing on the levels of market developments and geographical regions.

Design/methodology/approach

Based on corporate sustainability data of 2,725 global companies in 2016, this study uses a combination of analytical techniques including cluster analysis, data mining, partial least square path modeling and importance performance map analysis.

Findings

This study finds that companies in European developed markets exhibit the highest-ranking of corporate sustainability. In line with the social impact hypothesis, environmental, social and governance performance positively affects economic performance. Moreover, there is strong evidence of causal relationships and synergistic effects among the four pillars of corporate sustainability. In accordance with the institutional theory, the patterns of causal directions and the critical pillars depend on levels of market developments and geographical regions. Overall, social and environmental pillars are among the most critical drivers of corporate sustainability.

Research limitations/implications

The methodology does not aim to provide a new weighting scheme for calculating the corporate sustainability index.

Practical implications

Corporate managers should consider sustainability practices in all dimensions to benefit from synergistic effects among environmental, social, governance and economic activities. Furthermore, corporate sustainability strategies should not be generalized across countries with different levels of market developments and geographical regions.

Originality/value

This study prioritizes environmental, social, governance and economic pillars of corporate sustainability in emerging and developed markets across geographical regions.

Keywords

Acknowledgements

The authors are grateful to the editor and anonymous referees for their helpful comments. These have helped to clarify a number of issues and improve the overall exposition of the paper.

Citation

Budsaratragoon, P. and Jitmaneeroj, B. (2019), "Measuring causal relations and identifying critical drivers for corporate sustainability: the quadruple bottom line approach", Measuring Business Excellence, Vol. 23 No. 3, pp. 292-316. https://doi.org/10.1108/MBE-10-2017-0080

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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