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 fails 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.
AguileraR. V.Aragón-CorreaJ. A.MaranoV.TashmanP. A. (2021). The corporate governance of environmental sustainability: A review and proposal for more integrated research. Journal of Management, 47(6), 1468–1497. https://doi.org/10.1177/0149206321991212
2.
Aragon-CorreaJ. A.MarcusA. A.RiveraJ. E.KenworthyA. L. (2017). Sustainability management teaching resources and the challenge of balancing planet, people, and profits. Academy of Management Learning & Education, 16(3), 469–483. https://doi.org/10.5465/amle.2017.0180
3.
BerchicciL.KingA. A. (2022). Building knowledge by mapping model uncertainty in six studies of social and financial performance. Strategic Management Journal, 43(7), 1319–1346. https://doi.org/10.1002/smj.3374
4.
BettisR. A.HelfatC. E.ShaverJ. M. (2016). The necessity, logic, and forms of replication. Strategic Management Journal, 37(11), 2193–2203. https://doi.org/10.1002/smj.2580
5.
BlakeL. (2020). RE: Proposed rule on ‘Fiduciary duties regarding proxy voting and shareholder rights’[RIN 1210-AB91]. Letter dated Oct 5, 2020.
6.
BloomfieldR.RennekampK.SteenhovenB. (2018). No system is perfect: Understanding how registration-based editorial processes affect reproducibility and investment in research quality. Journal of Accounting Research, 56(2), 313–362. https://doi.org/10.1111/1475-679X.12208
CrasiT. (2015). Testimony on behalf of the National Association of Home Builders before the Senate Committee on Energy and Natural Resources. Hearing on Energy Efficiency Legislation, April 30. https://www.energy.senate.gov/hearings/2015/4/hearing-on_1
9.
EcclesR. G.IoannouI.SerafeimG. (2014a). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. https://doi.org/10.1287/mnsc.2014.1984
10.
EcclesR. G.IoannouI.SerafeimG. (2014b). The impact of corporate sustainability on organizational processes and performance. SSRN Working Paper. https://doi.org/10.2139/ssrn.1964011
11.
EcclesR. G.IoannouI.SerafeimG. (2025). Erratum to “The Impact of Corporate Sustainability on Organizational Processes and Performance”. Management Science. https://doi.org/10.1287/mnsc.2025.00751
12.
EthirajS. K.GambardellaA.HelfatC. E. (2016). Replication in strategic management. Strategic Management Journal, 37(11), 2191–2192. https://doi.org/10.1002/smj.2581
GreeningD. W.TurbanD. B. (2000). Corporate social performance as a competitive advantage in attracting a quality workforce. Business & Society, 39(3), 254–280. https://doi.org/10.1177/000765030003900302
KingG.NielsenR. (2019). Why propensity scores should not be used for matching. Political Analysis, 27(4), 435–454. https://doi.org/10.1017/pan.2019.11
18.
KöhlerT.CortinaJ. M. (2023). Constructive replication, reproducibility, and generalizability: Getting theory testing for JOMSR right. Journal of Management Scientific Reports, 1(2), 75–93. https://doi.org/10.1177/275503112311760
19.
LeeA. H. (2020). Playing the long game: The intersection of climate change risk and financial regulation. Keynote remarks at PLI’s 52nd Annual Institute on Securities Regulation.
20.
LuntM. (2014). Selecting an appropriate caliper can be essential for achieving good balance with propensity score matching. American Journal of Epidemiology, 179(1), 226–235. https://doi.org/10.1093/aje/kwt212
21.
OrlitzkyM. (2011). Institutional logics in the study of organizations: The social construction of the relationship between corporate social and financial performance. Business Ethics Quarterly, 21(3), 409–444. https://doi.org/10.5840/beq201121325
22.
RosenbaumP. R.RubinD. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika, 70(1), 41–55. https://doi.org/10.1093/biomet/70.1.41
23.
RosenbaumP. R.RubinD. B. (1985). Constructing a control group using multivariate matched sampling methods that incorporate the propensity score. The American Statistician, 39(1), 33–38. https://doi.org/10.1080/00031305.1985.10479383
24.
RubinD. B. (1974). Estimating causal effects of treatments in randomized and nonrandomized studies. Journal of Educational Psychology, 66(4), 688. https://doi.org/10.1037/h0037350
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
