Advances in Economics and Business Vol. 14(1), pp. 1 - 22
DOI: 10.13189/aeb.2026.140101
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Bridging the Gap between Sustainability and Financial Performance through a Proposed Model for Determining the Optimal Capital Required for Achieving Sustainable Development in American Companies

Essam AlArbed ^*
Department of Accounting, Faculty of Economics, Damascus University, Syria

ABSTRACT

This study bridges the gap between sustainability and financial performance by proposing a comprehensive model to determine the optimal capital required for achieving sustainable development in American companies. Recent global pressures, including regulatory reforms, investor expectations, and the shift toward environmentally responsible economies, have heightened the need for companies to integrate environmental, social, and governance (ESG) considerations into strategic and financial decisions. Despite growing interest in ESG performance, the relationship between sustainability initiatives and financial outcomes remains contested, particularly regarding the capital investment needed to generate measurable improvements in both sustainability and profitability. To address this challenge, the study employs a quantitative research design using panel data from 100 U.S. publicly listed companies over ten years. The methodology integrates ratio analysis, principal component analysis (PCA), and regression modeling to examine the impact of ESG indicators on financial performance, as measured by return on assets. The proposed model identifies the level of capital allocation that maximizes sustainability outcomes without undermining financial performance. Results indicate that targeted capital investment in sustainability activities enhances long-term financial stability. The findings have practical implications for corporate managers, investors, and policymakers who must integrate sustainable corporate practices into their decision-making processes. Social implications include improved environmental responsibility and strengthened stakeholder trust. However, the study is constrained by data availability and industry-specific differences, which may limit the extent to which the findings are generalizable. The primary contribution of the research is a structured model to guide sustainable capital allocation and strengthen the financial sustainability nexus in American companies.

KEYWORDS
Sustainability Disclosures, ESG Accountability, CPA Assurance, Optimal Capital, Asset Allocation, Matrix Model, Sustainable Development, Integrated Reporting, ESG Reporting, Financial Performance

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Essam AlArbed , "Bridging the Gap between Sustainability and Financial Performance through a Proposed Model for Determining the Optimal Capital Required for Achieving Sustainable Development in American Companies," Advances in Economics and Business, Vol. 14, No. 1, pp. 1 - 22, 2026. DOI: 10.13189/aeb.2026.140101.

(b). APA Format:
Essam AlArbed (2026). Bridging the Gap between Sustainability and Financial Performance through a Proposed Model for Determining the Optimal Capital Required for Achieving Sustainable Development in American Companies. Advances in Economics and Business, 14(1), 1 - 22. DOI: 10.13189/aeb.2026.140101.