Measuring sustainability in social enterprises: Development and validation of a multi-dimensional framework

Abstract

Social enterprises (SEs) are instrumental in achieving the Sustainable Development Goals (SDGs) by addressing persistent social, environmental, and economic challenges. However, the lack of validated frameworks to measure SE sustainability limits their ability to measure and strengthen their sustainable performance, which further hinders the capacity to drive transformative change as intended by the SDGs. Hence, this study aims to develop and validate a multidimensional scale for measuring the sustainability performance of SEs, enabling them to realise their potential and enhance their contributions to the SDGs. This study utilized (Churchill, 1979) three-phase methodology to develop and validate sustainability performance measurement scale for SEs. Phase 1 identified sustainability-related items through a literature review and qualitative analysis, finalized by an expert panel. Phase 2 refined these items using exploratory factor analysis (EFA) on 149 SEs (sample 1) data. Phase 3 validated the structure with confirmatory factor analysis (CFA) on data from 435 SEs (sample 2). The final scale included 36 items across five dimensions: social, economic, environmental, political, and governance, subject to the validity and reliability of the newly developed scale. Reliability was confirmed, with Cronbach's alpha exceeding 0.7 for all dimensions. Convergent validity was supported by AVE scores above 50 %, while HTMT ratios below 0.85 established discriminant validity. This research significantly contributes to the literature on SE sustainability by providing a validated performance measurement tool, which enables SEs to optimize their operations, strengthen their impact, and contribute more effectively to the SDGs.