Which three dimensions are compared in sustainability performance concerning their impact on firm value creation?

In the context of sustainability performance and its impact on firm value creation, the three dimensions that are widely recognized and compared are economic, social, and governance. These dimensions are often encapsulated in the acronym ESG, which has become a critical framework for understanding how organizations can create long-term value while also considering their societal and environmental impacts.

The economic dimension focuses on how a company's financial health and profitability can align with sustainable practices, ensuring that business operations not only generate profit but do so in a way that is sustainable over time. The social dimension examines how a company's actions affect its stakeholders, including employees, customers, suppliers, and the communities in which it operates. This involves considerations of labor practices, community engagement, and social responsibility. The governance dimension addresses the structure and practices of leadership and corporate governance, ensuring that companies adhere to ethical standards, transparency, and accountability, which are vital for fostering trust and securing sustained investment.

Together, these three elements create a comprehensive view of how sustainability can influence and enhance firm value by integrating responsible practices into the core of business strategy. This holistic approach supports not just compliance and risk management, but also innovation and competitive advantage in a marketplace that increasingly values corporate responsibility.