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


  • Moliterni, Fabio


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.

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  • Moliterni, Fabio, 2018. "Do Global Financial Markets Capitalise Sustainability? Evidence of a Quick Reversal," SAS: Society and Sustainability 274853, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemss:274853
    DOI: 10.22004/ag.econ.274853

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    References listed on IDEAS

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    7. Adrian Wai Kong Cheung, 2011. "Do Stock Investors Value Corporate Sustainability? Evidence from an Event Study," Journal of Business Ethics, Springer, vol. 99(2), pages 145-165, March.
    8. Peter M. Clarkson & Yue Li & Matthew Pinnuck & Gordon D. Richardson, 2015. "The Valuation Relevance of Greenhouse Gas Emissions under the European Union Carbon Emissions Trading Scheme," European Accounting Review, Taylor & Francis Journals, vol. 24(3), pages 551-580, September.
    9. Adam Harmes, 2011. "The Limits of Carbon Disclosure: Theorizing the Business Case for Investor Environmentalism," Global Environmental Politics, MIT Press, vol. 11(2), pages 98-119, May.
    10. Campbell, Katherine & Sefcik, Stephan E & Soderstrom, Naomi S, 2003. "Disclosure of Private Information and Reduction of Uncertainty: Environmental Liabilities in the Chemical Industry," Review of Quantitative Finance and Accounting, Springer, vol. 21(4), pages 349-378, December.
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