Journal
JOURNAL OF ENVIRONMENTAL MANAGEMENT
Volume 82, Issue 4, Pages 529-537Publisher
ACADEMIC PRESS LTD- ELSEVIER SCIENCE LTD
DOI: 10.1016/j.jenvman.2006.02.010
Keywords
corporate social responsibility; environmental performance; event study; FTSE4Good
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This paper examines whether corporate financial performance is affected by public endorsement of environmental and social performance. Event study methodology, which relies on the notion of market efficiency, is used to examine the relationship between positive and negative announcements and changes in share prices or daily returns. Inclusion in and deletion from the FTSE4Good UK Index is used as a proxy measure for good (poor) corporate social responsibility. The abnormal or unexpected daily returns associated with an event are calculated and their significance tested. The results show a trend towards positive and negative announcements having the expected effects on daily returns. But these movements are not significant and the data do not suggest that a firm's presence oil the index brings it any significant financial return for signalling its corporate social responsibility. (c) 2006 Elsevier Ltd. All rights reserved.
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