Impact of Sustainability Certification on the Financial Performance of Firms in Italy

This thesis examines how sustainability certifications affect the financial performance of Italian firms, focusing on their revenue growth. The study looks at both the short-term and longer-term effects of certification adoption, with an emphasis on identifying causal relationships while controlling for potential confounding variables. We evaluate the effect of sustainability certifications on revenue growth using a combination of Ordinary Least Squares (OLS) regression, Difference-in-Differences (DiD) analysis, event study, and Random Forest prediction model. The findings show a positive correlation between certification and revenue growth in the baseline OLS model, but the DiD model, which accounts for firm-specific and time-specific effects, reveals a modest negative post-certification growth effect. The event study further supports these findings, showing that while firms experience a temporary boost in the adoption year, growth declines in subsequent years. Additionally, the Random Forest model highlights that certification contributes moderately to predicting future growth, but firm-specific characteristics, such as past revenue and company size, are more influential. According to the study's findings, sustainability certifications have a limited direct financial impact on revenue development, despite their reputational and operational advantages. The findings emphasize how crucial it is to take business characteristics, market conditions, and historical revenue trends into account when assessing the influence of certifications. Across methods, the message is consistent: we find no robust evidence that sustainability certifications raise short-run revenue growth. Event-time results show pre-adoption run-ups and mostly flat or negative post-estimates, and certification variables add negligible predictive signal in the machine-learning check. Limitations include annual timing of adoption, noisy growth outcomes, and incomplete coverage for some certificates. Implication: certifications may still matter, for compliance, risk management, procurement access, or longer-horizon performance, but, on average, they do not deliver immediate revenue growth in this setting.