Corporate Sustainability and Shareholder Wealth—Evidence from British Companies and Lessons from the Crisis

Fernando Gómez-Bezares, Wojciech Przychodzen and Justyna Przychodzen
Additional contact information
Fernando Gómez-Bezares: Deusto Business School, University of Deusto, 48014 Bilbao, Spain
Wojciech Przychodzen: Deusto Business School, University of Deusto, 48014 Bilbao, Spain
Justyna Przychodzen: Laureate Online Education, 1101 BH Amsterdam, The Netherlands

Sustainability, 2016, vol. 8, issue 3, 1-22

Abstract: This study examines the impact of corporate sustainability (CS) on stock market returns for FTSE 350 companies over the period 2006–2012. We find that an investment strategy that bought shares in companies with balanced financial, social, and environmental activities would have earned an annual four-factor alpha for a value-weighted portfolio of 3.54% per year during the sample period and 2.98% above industry benchmarks. In addition, we find that CS is negatively correlated with stock return volatility, and investing in companies with CS not only generates higher returns during peak phases, but also diminishes shareholders’ losses during bear phases. We have also carried out an additional, out-of-the-sample analysis for the years 2013–2015 which confirmed our results.

Keywords: corporate financial performance; corporate sustainability; shareholder wealth; socially responsible investing; sustainable corporate finance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.mdpi.com/2071-1050/8/3/276/pdf (application/pdf)
https://www.mdpi.com/2071-1050/8/3/276/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:8:y:2016:i:3:p:276-:d:65900

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().