Examining Firms’ Sustainability Frontier: Efficiency in Reaching the Triple Bottom Line

Yiming Zhuang (), Meltem Denizel and Frank Montabon
Additional contact information
Yiming Zhuang: College of Business, Frostburg State University, Frostburg, MD 21532, USA
Meltem Denizel: Debbie and Jerry Ivy College of Business, Iowa State University, Ames, IA 50011, USA
Frank Montabon: Debbie and Jerry Ivy College of Business, Iowa State University, Ames, IA 50011, USA

Sustainability, 2023, vol. 15, issue 11, 1-22

Abstract: Sustainability has become a significant concern worldwide in recent decades. There seems to be implicit competition among firms for better sustainability performance. Like any other firm activity, sustainability undertakings require resources and their efficient use to achieve the desired performance. Firms may hesitate to undertake sustainability initiatives due to the underlying costs, leading to the question of how efficient they are in their sustainability practices. Relying on data from CSRHub and COMPUSTAT, we employed data envelopment analysis to evaluate the sustainability efficiency of 1141 large U.S. manufacturing firms from 2009 to 2018. We measured the sustainability efficiency of each firm relative to those on the efficient frontier for all the firms in our sample and also separately for each industry. The analysis results indicate that firms’ sustainability efficiency varies across years and industries. Furthermore, we show a quadratic relationship between sustainability performance and sustainability efficiency. This finding implies a process that begins with firms struggling to streamline their sustainability efforts and decreasing their efficiency as sustainability performance increases. Sustainability efficiency starts increasing only after a certain threshold is reached in sustainability performance. Our findings offer valuable insights for firms and stakeholders in their efforts to achieve desired levels of sustainability efficiency.

Keywords: data envelopment analysis; sustainability efficiency; maturity theory; CSRHub (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/11/8871/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/11/8871/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:11:p:8871-:d:1160652

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().