The impact of corporate sustainability performance on capital structure: A literature review

Kotryna Garmute
Additional contact information
Kotryna Garmute: Vilnius University

Transformations and Sustainability, 2026, vol. 2, issue 3, 180-191

Abstract: The aim of this article is to analyse the impact of corporate sustainability performance on capital structure, based on a review of recent literature and empirical studies. The article discusses how environmental, social and governance (ESG) factors influence corporate financial decisions, particularly the debt-to-equity ratio. Research shows that higher levels of ESG disclosure often led to lower cost of capital, lower financial leverage and greater investor confidence. ESG performance is becoming an indicator not only of reputation but also of financial efficiency, as transparency and responsible performance reduce risk and improve access to finance. The article highlights that the impact of sustainability factors on capital structure depends on the sector, region and size of the company, therefore it is important to assess these aspects in a contextual way. The article concludes that sustainable performance and ESG integration are becoming a cornerstone in shaping a modern, resilient and competitive capital structure.

Keywords: capital structure; ESG; debt; equity; sustainability information; sustainability activities; WACC; financial leverage (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.cpsa.lt/ts/article/view/31/40 (application/pdf)
https://journals.cpsa.lt/ts/article/view/31 (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:dbj:trasus:v:2:y:2026:i:3:p:180-191

DOI: 10.63775/70n0e609

Access Statistics for this article

More articles in Transformations and Sustainability from Centre for Productivity and Sustainability Analysis
Bibliographic data for series maintained by Tomas Balezentis ().