Strategic Shift: The Power of Green Strategy on Sustainability Performance

ABSTRACT Employing FTSE Russell's unique Green Revenues data on S&P 1500 firms from 2016 to 2024, this study examines the long‐term effects of a corporate strategic shift toward green strategy, proxied by green revenue reporting, on corporate sustainability performance. Using ordinary least squares, complemented by the treatment model, the study's findings reveal that adopting a strategic shift to green strategy has a persistently positive effect on firm‐level sustainability performance. The treatment effects of green revenue reporting are exceptionally robust with firm‐level controls. This study further documents that the environmental innovation score mediates the relationship between green strategy and sustainability performance. Given the study's various novelties, the hypothesis is empirically robust and is of significant value to future studies.