Does Sustainable Development Foster Value Creation? Empirical Evidence from the Global Energy Industry

ABSTRACT The relationship between a firm's sustainability efforts and its financial performance has gained increasing interest among academia and in the press in recent years. In this study we focus on the energy industry in which sustainability issues are of special interest, but in which context the association between firm performance and sustainable development has not yet been studied. The data for this study consists of two groups of firms: firms that are included in the Dow Jones Sustainability Indexes (DJSI), and the biggest firms from the global energy sector. The financial performance of the companies is analyzed from different perspectives, and the data is gathered from years 2000, 2005, and 2009. The empirical analysis finds evidence of a positive association between sustainable development and firms' financial performance, especially when performance is measured as the market capitalization value. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment