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The independent effects of environmental, social and governance initiatives on the performance of UK firms


  • Jacquelyn E Humphrey

    (School of Finance, Actuarial Studies and Applied Statistics, Australian National University, Australia)

  • Darren D Lee
  • Yaokan Shen

    (UQ Business School, University of Queensland, Australia)


We investigate the effect of environmental, social and governance factors on the financial performance of UK firms. We examine the three factors separately to disentangle the relation of each with performance. We find no difference in the performance of firms with high or low environmental, social or governance rankings. The firms also do not differ in their systematic risks, book-to-market ratios or momentum exposures. However, high-rated firms are consistently larger. Our findings demonstrate that UK investors can incorporate environmental, social or governance criteria into their investment strategies without incurring any significant cost (or benefit) in terms of risk or return.

Suggested Citation

  • Jacquelyn E Humphrey & Darren D Lee & Yaokan Shen, 2012. "The independent effects of environmental, social and governance initiatives on the performance of UK firms," Australian Journal of Management, Australian School of Business, vol. 37(2), pages 135-151, August.
  • Handle: RePEc:sae:ausman:v:37:y:2012:i:2:p:135-151

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    Cited by:

    1. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    2. repec:eee:juipol:v:48:y:2017:i:c:p:1-11 is not listed on IDEAS


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