Is commiting to sustainable development valuable? - The stock market reaction to SDG reports in Germany

Noah Speidel, Florian Grebe and Leonard Grebe

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This study contributes to the discussion on the indication of sustainable companies. The United Nations Sustainable Development Goals (SDGs) have emerged as a potential framework to identify sustainable intentions. Various companies link their strategic goals with the SDGs (SDG commitment) to promote sustainable development. This study takes a novel approach, delving into the German DAX's stock market response to the publication of the United Nations SDG reports. The SDG report is analyzed as a sustainability indicator, aiming to uncover the role of SDG commitment for investors. While the market reacts with abnormal negative returns on the publication of SDG reports, the event study results reveal no effect of SDG commitment on market perception. We conclude that SDG commitment is an insufficient indicator of investor reaction to the SDG reports.

Date: 2024
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Published in Corporate Finance 9-10 (2024) : pp. 220-223

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:150008

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