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Sustainability 2016, 8(3), 276; doi:10.3390/su8030276

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

1
Deusto Business School, University of Deusto, 48014 Bilbao, Spain
2
Laureate Online Education, 1101 BH Amsterdam, The Netherlands
*
Author to whom correspondence should be addressed.
Academic Editor: Giuseppe Ioppolo
Received: 27 January 2016 / Revised: 10 March 2016 / Accepted: 10 March 2016 / Published: 16 March 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [546 KB, uploaded 23 March 2016]   |  

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. View Full-Text
Keywords: corporate financial performance; corporate sustainability; shareholder wealth; socially responsible investing; sustainable corporate finance corporate financial performance; corporate sustainability; shareholder wealth; socially responsible investing; sustainable corporate finance
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Gómez-Bezares, F.; Przychodzen, W.; Przychodzen, J. Corporate Sustainability and Shareholder Wealth—Evidence from British Companies and Lessons from the Crisis. Sustainability 2016, 8, 276.

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