WThis study examines whether the relationship between financial stability and sustainability
performance may serve as an empirical indicator of managerial intent. Although previous
studies have mostly concentrated on ESG performance metrics, there is limited understanding
of how sustainability outcomes are integrated into the fundamental financial stability
of organizations. A sample of 1,857 publicly listed companies from 2011 to 2019 is
utilized to assess earnings quality via earnings persistence, while sustainability
is evaluated through ESG persistence and long-term ESG development. A multivariate
OLS model, accounting for business development, profitability dynamics, and industry
effects, examines whether these dimensions demonstrate synchronized stability. The
findings indicate no statistically significant relationship between earnings persistence
and either ESG persistence or ESG development. Financial stability is primarily influenced
by fundamental economic factors, especially the growth of firms and the volatility
of profitability. These findings corroborate strategic decoupling theory, indicating
that sustainability programs frequently function as an independent strategic domain.
The study offers a dynamic viewpoint on ESG integration and underscores the significance
of examining long-term alignment in measuring company resilience.
