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Determinants of corporate sustainability performance – evidence from Brazilian panel data

Vicente Lima Crisóstomo (Federal University of Ceara, Fortaleza, Brazil)
Fatima de Souza Freire (University of Brasilia, Brasília, Brazil)
Maria Rafaela De Oliveira Freitas (Tribunal de Justiça do Estado do Ceará (Ceará State Court) and Federal University of Ceará, Fortaleza, Brazil)

Social Responsibility Journal

ISSN: 1747-1117

Article publication date: 28 August 2019

Issue publication date: 20 October 2020



Over the past two decades, there has been an increasing interest on corporate social responsibility by a number of constituencies – corporate managers, research scholars, policymakers and investors. In this context, corporate sustainability performance (CSP) has been a central focus of attention. This paper aims to analyze CSP determinants in Brazil, an important emerging market. Firm CSP is proxied by the membership to the Corporate Sustainability Index (ISE) which comprises environmental, social, economic and governance issues.


Logit panel data models are estimated for a sample of 2,685 firm-year observations in the period of 2006-2015.


Results show that firms operating in environmental risky industries tend to be leading CSP firms in Brazil which might be a positive consequence of the Brazilian environmental legislation that could be forcing such firms to be more committed to environmental issues. High ownership concentration reduces the probability of a firm’s membership to the ISE index signaling that large controlling blockholders may not see sustainability and governance concerns as relevant. Larger Brazilian firms and the ones with more growth opportunities tend to be CSP leaders. Additionally, the financial crisis of 2007-2009 had a negative effect on CSP in Brazil.

Practical implications

The implications of the present findings may be of interest to academics and firms’ stakeholders. The fact that firms from environmental risky industries exhibit higher concerns with CSP, probably because of the Brazilian environmental rules that has advanced in the past decades, show the prominence of policymakers in the critical scenario of environmental issues. When designing regulation, policymakers should be conscious of the importance of social issues and pay attention to all ways available to foster firm sustainability concerns. The additional evidence that dominant shareholders do not appear to see CSP as a relevant concern in Brazil points out an agency conflict in which large blockholders’ interests may be prevailing over other stakeholders’ interests. That is important to academics who study the role played by ownership structure on firm’s policies. Furthermore, larger firms, as well as the ones with more growth opportunities, seem to invest in CSP, possibly for seeing it as a way to generate competitive advantage.


As per the authors’ knowledge this is the first paper to point out the relevance of industry environmental sensitivity over firm’s commitment to sustainability issues in Brazil. Additional evidence is provided on the negative effect of ownership concentration on the probability of firm’s membership to the ISE sustainability index using a longer period as well as robust logit panel data model estimates compared to previous studies. Unlike previous works, the paper analyzes the complexity of a sustainability index in the Brazilian market. Such index comprises corporate social responsibility, sustainability and corporate governance concerns. This set of concerns makes it a complex index and requires a deeper rationale for the determinants of CSP as proxied by the membership to it, under the stakeholder and agency theoretical frameworks.



Crisóstomo, V.L., Freire, F.d.S. and Freitas, M.R.D.O. (2020), "Determinants of corporate sustainability performance – evidence from Brazilian panel data", Social Responsibility Journal, Vol. 16 No. 8, pp. 1053-1072.



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