Navigating Multidimensional Sustainability: How Firms Can Balance Economic, Social, and Environmental Goals in the Transition to a Low-Carbon Economy

The transition to lower carbon emissions presents significant challenges for firms, driven by stakeholder pressure and regulatory demands. While prior research often examines economic, social, and environmental sustainability separately, little is known about how firms integrate these dimensions to achieve balanced performance. This study examines the multidimensional nature of corporate sustainability through an integrated multi-criteria decision-making approach, aiming to identify the trade-offs and synergies among sustainability dimensions. We analyze data on GHG emissions from Brazilian firms from 2008 to 2022, across high and low-polluting industries. The findings suggest that firms’ environmental performance is closely linked to their ability to balance economic, social, and environmental objectives simultaneously. Overall, the study shows that firms capable of coordinating strategies across all three dimensions achieve more consistent and impactful sustainability outcomes. We contribute to stakeholder theory by introducing a dynamic perspective on stakeholder influence in shaping corporate environmental strategies. For practitioners, our findings provide guidance on how to prioritize resource allocation across competing sustainability goals. For policymakers, the results underscore the importance of designing financial incentives and support mechanisms that empower resource-constrained firms to adopt sustainable practices and contribute more effectively to the transition toward a low-carbon economy.