EconPapers    
Economics at your fingertips  
 

Voluntary Corporate Environmental Initiatives and Shareholder Wealth

Karen Fisher-Vanden and Karin Thorburn

No 6698, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Researchers debate whether environmental investments reduce firm value or can actually improve financial performance. We provide some first evidence on shareholder wealth effects of voluntary corporate environmental initiatives. Companies announcing membership in Climate Leaders and Ceres - two voluntary environmental programs related to climate change - experience significantly negative abnormal stock returns. The price decline is smaller in carbon-intensive industries, where regulatory actions are more likely, and for high book-to-market firms, suggesting that "green" expenditures crowd out growth-related investments. We also document insignificant announcement returns for portfolios of industry rivals. Overall, the environmental investments appear to conflict with shareholder value-maximization. This has far reaching implications since the U.S. government relies on voluntary initiatives to reduce the emissions of greenhouse gases.

Keywords: capital expenditures; climate change; corporate social responsibility; environmentally responsible investing; shareholder wealth (search for similar items in EconPapers)
JEL-codes: G31 G38 Q5 (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-env and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6698 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Voluntary corporate environmental initiatives and shareholder wealth (2011) Downloads
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:cpr:ceprdp:6698

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=6698

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2022-11-24
Handle: RePEc:cpr:ceprdp:6698