Financial Constraints and Corporate Sustainability Performance: Do Climate Exposure and People's Climate Attention Matter?

Boying Xu; Ruth Owusu‐Mensah; Daniel Gyimah

doi:10.1002/bse.70772

Financial Constraints and Corporate Sustainability Performance: Do Climate Exposure and People's Climate Attention Matter?

Boying Xu
, Ruth Owusu‐Mensah
, Daniel Gyimah

Nottingham Trent University
Ajman University

Research output: Contribution to journal › Article › peer-review

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Abstract

This study investigates the relationship between financial constraints and a firm's sustainability performance. Our empirical analysis utilises a panel of 40,445 observations from 9466 listed non‐financial firms across 44 countries, spanning the period from 2002 to 2019. We provide strong evidence that financial constraints significantly hinder a firm's corporate sustainability performance. Further analyses show that a firm's climate exposure affects the negative impact of financial constraints on sustainability performance. In other words, firms exposed to climate change tend to show greater commitment to sustainability practices regardless of their financial constraints. However, we find no evidence that external and public attention to climate change issues persuades financially constrained firms to enhance their sustainability performance. Our study offers new insights into the link between financial constraints and corporate sustainability, as well as the implications of climate exposure and public attention to climate change.

Original language	English
Pages (from-to)	(In-Press)
Number of pages	35
Journal	Business Strategy and the Environment
Volume	(In-Press)
Early online date	13 Apr 2026
DOIs	https://doi.org/10.1002/bse.70772
Publication status	E-pub ahead of print - 13 Apr 2026

Bibliographical note

© 2026 The Author(s). Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd.

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 12 Responsible Consumption and Production
SDG 13 Climate Action

Keywords

climate attention
climate change exposure
corporate sustainability performance
financial constraints

Access to Document

10.1002/bse.70772Licence: CC BY

Xu2026VoRFinal published version, 766 KBLicence: CC BY

Cite this

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title = "Financial Constraints and Corporate Sustainability Performance: Do Climate Exposure and People's Climate Attention Matter?",

abstract = "This study investigates the relationship between financial constraints and a firm's sustainability performance. Our empirical analysis utilises a panel of 40,445 observations from 9466 listed non‐financial firms across 44 countries, spanning the period from 2002 to 2019. We provide strong evidence that financial constraints significantly hinder a firm's corporate sustainability performance. Further analyses show that a firm's climate exposure affects the negative impact of financial constraints on sustainability performance. In other words, firms exposed to climate change tend to show greater commitment to sustainability practices regardless of their financial constraints. However, we find no evidence that external and public attention to climate change issues persuades financially constrained firms to enhance their sustainability performance. Our study offers new insights into the link between financial constraints and corporate sustainability, as well as the implications of climate exposure and public attention to climate change.",

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AU - Gyimah, Daniel

N1 - © 2026 The Author(s). Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

PY - 2026/4/13

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N2 - This study investigates the relationship between financial constraints and a firm's sustainability performance. Our empirical analysis utilises a panel of 40,445 observations from 9466 listed non‐financial firms across 44 countries, spanning the period from 2002 to 2019. We provide strong evidence that financial constraints significantly hinder a firm's corporate sustainability performance. Further analyses show that a firm's climate exposure affects the negative impact of financial constraints on sustainability performance. In other words, firms exposed to climate change tend to show greater commitment to sustainability practices regardless of their financial constraints. However, we find no evidence that external and public attention to climate change issues persuades financially constrained firms to enhance their sustainability performance. Our study offers new insights into the link between financial constraints and corporate sustainability, as well as the implications of climate exposure and public attention to climate change.

AB - This study investigates the relationship between financial constraints and a firm's sustainability performance. Our empirical analysis utilises a panel of 40,445 observations from 9466 listed non‐financial firms across 44 countries, spanning the period from 2002 to 2019. We provide strong evidence that financial constraints significantly hinder a firm's corporate sustainability performance. Further analyses show that a firm's climate exposure affects the negative impact of financial constraints on sustainability performance. In other words, firms exposed to climate change tend to show greater commitment to sustainability practices regardless of their financial constraints. However, we find no evidence that external and public attention to climate change issues persuades financially constrained firms to enhance their sustainability performance. Our study offers new insights into the link between financial constraints and corporate sustainability, as well as the implications of climate exposure and public attention to climate change.

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KW - climate change exposure

KW - corporate sustainability performance

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Financial Constraints and Corporate Sustainability Performance: Do Climate Exposure and People's Climate Attention Matter?

Abstract

Bibliographical note

UN SDGs

Keywords

Access to Document

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