Financial/ESG Sustainable Growth Theory and Practice

Purpose: This article applies and early tests the Financial/Environments, Social, Governance (ESG) Sustainable Growth matrix theory. Design/methodology/approach: A case study of Morgan Stanley Capital International ESG rated airlines. Findings: It shows how the matrix integrates financial sustainable growth, ESG, Corporate Social Responsibility, sustainable development, and stakeholder theories into a practical application that generates analysis of impact and strategic options prescriptions. Originality: This article illustrates the maximization of the allocation of societal surplus between shareholders and other stakeholders. It also constructs a proxy for ESG-sustainable growth rate, where no metrics still exist for this. Research limitations/implications: By the integration of the above theories, sustainable development can change from an all-encompassing umbrella concept to doable courses of actions and measurable metrics. Practical implications: The article shows the practical usefulness of the matrix for corporate strategists. Social implications: Industrial economists can also use the matrix to compare industries about their capacity to generate financial and ESG sustainable growth and allocate societal surplus.