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
Sustainability 2016, 8(3), 276; https://doi.org/10.3390/su8030276
Received: 27 January 2016 / Revised: 10 March 2016 / Accepted: 10 March 2016 / Published: 16 March 2016
(This article belongs to the Section Economic and Business Aspects of Sustainability)
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.
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Keywords:
corporate financial performance; corporate sustainability; shareholder wealth; socially responsible investing; sustainable corporate finance
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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. https://doi.org/10.3390/su8030276
AMA 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(3):276. https://doi.org/10.3390/su8030276
Chicago/Turabian StyleGómez-Bezares, Fernando, Wojciech Przychodzen, and Justyna Przychodzen. 2016. "Corporate Sustainability and Shareholder Wealth—Evidence from British Companies and Lessons from the Crisis" Sustainability 8, no. 3: 276. https://doi.org/10.3390/su8030276
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