The impact of sustainable development on the financial performance of organizations: Substantiating the effectiveness of investments

The paper assesses the influence of sustainable development (SD) on an organization’s financial performance to determine its effectiveness in improving enterprise financial indicators. Data were collated and analyzed from a study sample of 93, using an enumeration sampling technique on the two firms under study. Findings indicated a negative association between return on equity and SD practices. A significant positive association exists between SD practices and firm size, suggesting that larger firms adopt more sustainable practices. No significant association was found between earnings per share and SD practices. The study recommended that sustainability reports should be made mandatory through legislation, and that the government should allow tax credits and other incentives for corporate bodies that engage in practices that support sustainability, to encourage them to contribute more to SD.