Corporate SDG performance and investor trading behavior

Xinglong Yang, Zhang-HangJian Chen, Yujia Feng, Xiang Gao and Kees G. Koedijk

Finance Research Letters, 2024, vol. 66, issue C

Abstract: This paper employs a novel sustainability rating from Robeco to examine the response of investors to firms’ SDG performance. We explore the underlying mechanism from the perspective of corporate reputation and financial performance. Our finding suggests that better SDG performance leads to a net outflow of funds, especially from individual investors. Such implication may be due to the existence of greenwashing behaviors by management, as firms’ sustainability performance in the society dimension significantly improves its reputation, but not its financial performance. Furthermore, the negative impact of SDG performance on individual investors’ fund flows becomes markedly pronounced in state-owned, heavily polluting, Northwest region enterprises and after the introduction of the “dual carbon” targets.

Keywords: Sustainability; SDG performance; Trading behavior; Corporate reputation (search for similar items in EconPapers)
JEL-codes: G32 G41 I31 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324006895

DOI: 10.1016/j.frl.2024.105659

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