["Business Strategy and the Environment, Volume 35, Issue 4, Page 5879-5894, May 2026. ", "\nABSTRACT\nThis article evaluates the average business performance of construction firms across Spain's 17 autonomous communities within a decentralised governance framework. A regional composite sustainability index is developed, integrating economic, social and environmental intensity indicators. ANOVA, stepwise regression and k‐means clustering are applied to identify territorial differences and patterns. The findings reveal significant regional disparities: Galicia leads in environmental and overall sustainability, the Balearic Islands perform best in the social dimension and the Basque Country demonstrates the strongest economic performance alongside the weakest environmental profile. Positive predictors of sustainable performance include a higher share of nonresidential construction, labour productivity, employment levels, mixed income, fixed capital investment, business growth, contribution to gross value added (GVA) and wages. In contrast, key negative predictors include CO2 emissions, SOx, PM10, HFCs and temporary collective residential buildings. Cluster analysis identifies two business profiles: one prevalent in the Mediterranean arc, northern Spain and Madrid, characterised by high residential intensity and poor environmental metrics, and another dominated by nonresidential activity and stronger sustainability outcomes. From a managerial perspective, firms are encouraged to rebalance their portfolios toward nonresidential, efficient residential and rehabilitation projects; electrify construction processes; control particulate emissions; adopt design for disassembly principles; and implement reverse logistics. The proposed index is positioned as a performance dashboard to support interregional benchmarking and continuous improvement.\n"]