Survey of the association between financial performance and corporate sustainability performance (Case study: cement companies accepted at Tehran Stock Exchange)

Abstract

In the modern world, companies can not achieve profitability with concentrating on consumers. Indeed because of the growth of societies, enlarging companies and competitive situations of business, it is necessary for companies to be responsible to the wide range of stakeholders. So companies try to survive and achieve legitimacy from their stakeholders via improving their overall performance. Corporate Sustainability Performance (CSP) measures the extent to which a firm embraces economic, social and environmental factors into operations. Hence in resent years, sustainability performance was found as an efficient management approach. Although Dow Jones Sustainability Index (DJSI) is a global index of corporate sustainability performance, it is not available for Iranian companies therefore it is replaced by the Green Management Award. Researchers and managers gave attention to The association between Financial Performance and Corporate Sustainability Performance. Hence lots of studies were tested it in all over the world and most of them found a positive association between Financial Performance and Corporate Sustainability Performance. Accordingly, the main aim of this survey was to find the association between Financial Performance and Corporate Sustainability Performance by considering size, leverage, free cash flow, profitability and growth of the companies as financial performance indexes. This study is typically practical and methodologically, descriptive. The association between variables was surveyed with a multivariate logistic regression equation. Panel data was selected for this research analysis. For testing research hypothesis, 26 companies (117 year-company) were chosen from the Cement Companies Accepted at Tehran Stock Exchange. The period of the research was between 2007 and 2011. The hypothesis testing results stated that there is no association between Financial Performance and Corporate Sustainability Performance. It means that financial indexes do not show the investing motivation of companies in sustainability performance . Economic and political situations such as international sanctions, unstable exchange rate and new established concept of sustainability in Iran were the most important reasons of this result.