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Do Global Financial Markets Capitalise Sustainability? Evidence of a Quick Reversal

Fabio Moliterni
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Fabio Moliterni: Fondazione Eni Enrico Mattei

No 2018.25, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This study investigates the growing importance of sustainability in equity markets by estimating whether company commitment to sustainability matters in corporate valuation. The spreading concern for social and environmental issues, and especially for the material risks of climate change, induces policy to encourage companies to prioritise sustainability in their decision making. There is growing evidence that points to a rationale for a profit-driven response to social and environmental problems, uncovering the role of sustainability in investors’ decisions. Exploring a panel of 3,311 listed companies in 58 countries for the period 2010-2016, this study reveals that sustainability contributes to the creation of market value for listed companies, over the considered period. Furthermore, it investigates how this relationship changes according to environmental policy stringency and sector sensitivity to climate policies.

Keywords: Corporate Sustainability; Sustainable Investing; Climate-change; ESG Disclosures (search for similar items in EconPapers)
JEL-codes: O16 Q54 Q56 G32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-ene
Date: 2018-07
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2018.25

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