Relationship between Corporate Sustainability Performance and Tangible Business Performance: Evidence from Oil and Gas Industry

Abstract

Sustainability has become an important domain for business researchers in the current decade due to the imperative that businesses must create values for their stockholders while simultaneously meet their social responsibilities in order to make a sustainable world. To this end, the current empirical study examined the impact of Corporate Sustainability Performance (CSP) on a firm’s Tangible Business Performance (TBP) in the context of Oil and Gas industry due to their significant sustainability footprints. Using the data set called Pacific Sustainability Index (PSI), published by the Roberts Environmental Center, the research studied the direction and magnitude of relationships between key strategic factors. Hierarchical Regression Analysis was utilized to study the relationship between a firm’s business performance with respect to various dimensions of accounting and marketing based performance as well as the sustained growth rate. The study also explored the relationships between TBP and several strategic factors such as the size of the firm, manufacturing cost efficiency, capital intensity, debt leverage, and labor productivity. The study concludes that PSI and Research and Development (R&D) Intensity are major determinants of business performance in the Oil and Gas Industries across countries.