Stock price reactions to the climate activism by Fridays for Future: The roles of public attention and environmental performance
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung
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in: Journal of Environmental Management, Jahrgang 344, 118608, 15.10.2023.
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung
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TY - JOUR
T1 - Stock price reactions to the climate activism by Fridays for Future: The roles of public attention and environmental performance
AU - Schuster, Mario
AU - Bornhöft, Sophie Constance
AU - Lueg, Rainer
AU - Bouzzine, Yassin Denis
N1 - © 2023 Published by Elsevier Ltd.
PY - 2023/10/15
Y1 - 2023/10/15
N2 - This research investigates how the European and U.S. stock markets reacted to the upheaval caused by Fridays for Future. We perform an event study on stocks listed in the Stoxx Europe 600 and S&P 500 to examine their price reactions to the Global Climate Strikes 1–11. We analyze the significance of abnormal stock returns utilizing three event windows covering anticipation, short-term, and lagged effects. We also divide the sample by environmental performance grades. Our findings reveal that climate activism significantly affected stock valuation for all 11 Global Climate Strikes. Superior environmental performance is comparatively beneficial for firm values when climate activism receives a high level of public attention. We identify differences in the market reactions between Europe and the U.S. Also, we enrich the literature on stock market reactions by demonstrating that investors react, not only to primary stakeholder events (i.e., enactment of regulations by governments) but also to secondary stakeholder pressure (i.e., NGO activism). Furthermore, we provide evidence that climate activism has a processual character that causes recurring effects on the stock market. Our study encourages policymakers to increase environmental pressure as a mechanism for guiding green transformation.
AB - This research investigates how the European and U.S. stock markets reacted to the upheaval caused by Fridays for Future. We perform an event study on stocks listed in the Stoxx Europe 600 and S&P 500 to examine their price reactions to the Global Climate Strikes 1–11. We analyze the significance of abnormal stock returns utilizing three event windows covering anticipation, short-term, and lagged effects. We also divide the sample by environmental performance grades. Our findings reveal that climate activism significantly affected stock valuation for all 11 Global Climate Strikes. Superior environmental performance is comparatively beneficial for firm values when climate activism receives a high level of public attention. We identify differences in the market reactions between Europe and the U.S. Also, we enrich the literature on stock market reactions by demonstrating that investors react, not only to primary stakeholder events (i.e., enactment of regulations by governments) but also to secondary stakeholder pressure (i.e., NGO activism). Furthermore, we provide evidence that climate activism has a processual character that causes recurring effects on the stock market. Our study encourages policymakers to increase environmental pressure as a mechanism for guiding green transformation.
KW - Stakeholder activism
KW - Climate change
KW - Green transition
KW - Social movement
KW - Climate risk
KW - Stock performance
KW - Management studies
UR - http://www.scopus.com/inward/record.url?scp=85165407327&partnerID=8YFLogxK
U2 - 10.1016/j.jenvman.2023.118608
DO - 10.1016/j.jenvman.2023.118608
M3 - Journal articles
C2 - 37473554
VL - 344
JO - Journal of Environmental Management
JF - Journal of Environmental Management
SN - 0301-4797
M1 - 118608
ER -