Who Is More Likely to Become a Sustainable Corporation? An Empirical Research Based on Corporate Sustainability Performance

ABSTRACT To achieve the sustainable development goals (SDGs), it is imperative to discern the catalysts behind corporate sustainability performance (CSP) to attain sustainability. However, these drivers were commonly perceived as following parallel trajectories, neglecting their hierarchical progression nature and leading to misinterpretation when identifying their internal influencing mechanisms. Therefore, this paper employed a three‐layer hierarchical linear models (3 L‐HLM) on a sample comprising 6139 listed companies worldwide to investigate the factors influencing a firm's CSP outcomes from the external context and internal strength perspectives. Our findings reveal that country‐level sustainability performance and corporate financial performance (CFP) positively impact CSP, while sector‐level pollution degree negatively affects CSP. Furthermore, country‐level and sector‐level sustainability indirectly promote CSP by moderating the CFP‐CSP relationship, highlighting the context‐dependent nature of the improvement effect driven by CFP. Our study delivers policy implications for governments, investors and other stakeholders to further enhance sustainable development.