EconPapers    
Economics at your fingertips  
 

How do financial markets reward companies tackling climate change concerns? A natural experiment based on the Brexit referendum

Riccardo Rodella and Maria Rosa De Giacomo

Corporate Social Responsibility and Environmental Management, 2023, vol. 30, issue 2, 979-990

Abstract: This paper explores whether environmental management activities and corporate commitment to tackle climate change concerns play a role in hedging a company's market valuation after a political or economic shock. Based on the literature on corporate social responsibility (CSR) and insurance‐like effects, this study advances knowledge on the impact of companies' engagement to tackle climate change on share price variation after the 2016 Brexit Referendum. The study also contributes to the limited number of studies using a difference‐in‐differences (DID) methodology in the CSR and climate change research area. Specifically, it uses DID, a natural experimental research design, and a multi‐variate regression analysis. The paper concludes that companies' concrete commitment to climate change has a buffer role in mitigating uncertainty related to Brexit. As the study found that financial markets reward companies that pay attention through the adoption of concrete actions and best practices on environmental issues during uncertain periods with respect to those that do not, the findings are in line with previous literature suggesting that corporate environmental commitment plays a buffering role during troubling periods. Results on the buffer role played by screenings, assessments, or disclosure activities to address environmental issues are unclear. We thus argue that during uncertain times, markets sustain companies taking proactive actions to tackle climate change.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1002/csr.2442

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:wly:corsem:v:30:y:2023:i:2:p:979-990

Access Statistics for this article

More articles in Corporate Social Responsibility and Environmental Management from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2024-07-01
Handle: RePEc:wly:corsem:v:30:y:2023:i:2:p:979-990