Do sustainable companies have better financial performance? Revisiting a seminal study

Do high-sustainability companies have better financial performance? An extremely influential publication, “The Impact of Corporate Sustainability on Organizational Processes and Performance,” claims they do. Its 2014 appearance preceded a boom in sustainable investing, and scholars and practitioners have used it to explain these investments. Yet I report here that replication and extension of the original analysis fai ls to reveal evidence that corporate sustainability influences either stock-market or accounting returns. I then show that the original study also lacks evidence to support an inference that corporate sustainability leads to superior financial performance. Finally, I discuss the importance of my findings for the practical accretion of knowledge.