The impact of sustainability orientation on performance in higher education. An empirical longitudinal investigation

Beyond the indisputable ethical value of integrating sustainability principles into the strategy and operations of organizations, their positive effect on financial and competitive performance represents a primary driver of sustainable innovation. Previous studies on the sustainability orientation-performance relationship have shown inconclusive findings and have never been conducted in higher education. This paper aims to examine whether different degrees of strategic orientation toward sustainability impact the financial and competitive performance of higher education institutions. The sustainable business model framework and the product and organizational architecture approach are used to assess sustainability integration in the strategies of all 61 Italian state universities, whereas panel regression analyses are utilized to investigate the sustainability orientation-performance relationship over the period 2017–2021. The findings reveal that, in general, sustainability orientation has a negative effect on financial performance and contradictory ones on competitive performance, but the impacts vary according to geographical location, type, and size of universities. • It examines the sustainability orientation-performance relationship in HEIs. • Sustainability orientation leads to higher costs and does not generate revenue. • Sustainability orientation increases the attraction of non-local students. • The weight of sustainability performance goals should be higher in funds allocation. • Generalist and smaller HEIs should strengthen collaboration and networking.