(Sustainability, profitability and financial objective of the firm)

(Sustainability, profitability and financial objective of the firm)

Abstract:

The objective of this paper is to explain how we understand business sustainability, the ethical foundation of sustainability and how all this connects with the financial objective of the firm (maximizing shareholder’s wealth). Sustainable companies must be profitable, they must take care of their financial performance; moreover, the only way to meet the long-term financial objective of the firm will be to be sustainable: the result must be positive for the shareholders and for the rest of stakeholders. But for this to work, greenwashing and socialwashing must be avoided; sustainability cannot be cosmetic and therefore must be verifiable.

Keywords: Business sustainability, profitability, ethics, verifiability of information, transparency, social benefits.