The dark side of sustainability orientation for SME performance

This article examines how a firm’s willingness to make trade-offs that favour sustainability over profitability attenuates the relationship between firm-level sustainability orientation and subsequent performance. Our analysis is based on two waves of original survey data on Finnish manufacturing SMEs. We surveyed different top management team members for each of the key variables. We find that sustainability orientation is positively associated with performance only when the willingness to make sustainability trade-offs is low, whereas the relationship becomes negative when the willingness to make such trade-offs is high. Our findings thus suggest that the popular adage of ‘doing well by doing good’ might only hold if ‘doing good’ does not conflict with business interests.