The effect of Sustainability Innovation, Proactive Sustainability Strategy, and Digital Transformation on Corporate Sustainability Performance

Abstract

Purpose: Business sustainability is widely accepted as a crucial approach to ensure the long-term success of enterprises. This research aims to explore how proactive sustainability strategies, sustainable innovation, and digital transformation impact a company's sustainability performance. Method: Additionally, the study will use organizational culture as a moderator and add size and leverage as control variables to evaluate their effects. A total of 705 sample data were collected from the financial statements, annual reports, and sustainability reports of non-financial companies listed on the Indonesia Stock Exchange (IDX) between 2018 and 2022. To test the hypotheses investigated, multiple regression analysis was used. Results and conclusion: The findings reveal that proactive sustainability strategy, sustainability innovation, and digital transformation have a positive impact on corporate sustainability performance. Secondly, it was found that organizational culture cannot act as a moderator in the relationship between proactive sustainability strategy, sustainability innovation, and digital transformation. Research implications: The research highlights that to enhance long-term performance, environmental, economic, and social strategies should be supported by stakeholder engagement, governance and leadership, and communication strategies. Among these six elements, stakeholder engagement and communication strategies have the most positive impact on sustainability performance. Originality/value: This study has introduced three new aspects for measuring the Proactive Sustainability Strategy.