THE IMPACT OF SUSTAINABLE LEADERSHIP ON LONG-TERM CORPORATE PERFORMANCE: BUSINESS CASE OF LIGHTNING INDUSTRY

Abstract

The study aims to evaluate the impact of sustainable leadership practices on long-term corporate performance within the European lighting industry. In light of the global transition toward low-carbon and resource-efficient economies, the research explores how the integration of economic, environmental, and social sustainability dimensions contributes to the creation of shareholder value, competitive advantage, and organisational resilience. Specifically, the study seeks to identify the specific leadership practices that enable companies to successfully balance financial stability with ethical responsibility, innovation, and environmental stewardship. To gain insights from business representatives, the paper focuses on lightning, using Philips Lighting (now known as Signify) as a representative case study. By focusing on Signify’s strategic transformation between 2016 and 2024, the research examines how sustainable leadership principles are embedded into corporate governance, investment decisions, and stakeholder relations. The purpose is to generate empirical insights into how sustainability-oriented leadership can drive measurable, long-term performance and support the broader objectives of sustainable development in dynamic and innovation-driven markets. Methodology. The research is based on secondary quantitative data derived from Philips Lighting (Signify) annual and sustainability reports for 2016–2024. Fourteen indicators were grouped into three categories—economic, environmental, and social and analysed through correlation analysis to determine their relationship with the company’s share price, representing shareholder value. The latter enabled the identification of interdependencies between sustainability-related metrics and market valuation over time. Results. The results demonstrate that economic indicators remain the primary drivers of market valuation, with Return on Equity and EBITA showing the strongest positive correlations. Social indicators, including gender diversity in leadership and training investments, also positively affect share price, while safety incidents and energy consumption display negative relationships. Environmental improvements, such as reduced carbon emissions, are associated with higher investor confidence. Overall, sustainable leadership enhances long-term corporate value through the balanced integration of profitability, environmental responsibility, and social development. Practical implications. The findings suggest that companies should combine financial performance with social inclusion, environmental efficiency, and strong corporate governance to achieve genuine sustainability. Integrating these dimensions into leadership and decision-making processes strengthens corporate reputation, mitigates risks, and enhances investor trust. Value/Originality. This paper presents one of the few empirical analyses that quantifies the relationship between sustainable leadership practices and long-term financial outcomes. By applying correlation analysis to longitudinal company data, it bridges the gap between conceptual theories of sustainable leadership and measurable business performance, demonstrating how sustainability-oriented leadership can serve as a source of competitive advantage and strategic resilience.