Corporate sustainability in the Nordic countries - The curvilinear effects on shareholder returns
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Corporate sustainability in the Nordic countries - The curvilinear effects on shareholder returns. / Lueg, Rainer; Pesheva, Radina.
In: Journal of Cleaner Production, Vol. 315, 127962, 15.09.2021.Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Corporate sustainability in the Nordic countries - The curvilinear effects on shareholder returns
AU - Lueg, Rainer
AU - Pesheva, Radina
N1 - Publisher Copyright: © 2021
PY - 2021/9/15
Y1 - 2021/9/15
N2 - The purpose of this paper is to investigate the effects of Corporate Sustainability (CS; actual practices and reporting) on total shareholder returns (TSR). We also investigate the subcomponents of Corporate Sustain ability, i.e., environmental, social, and governance practices. We use fixed effects regression models to investigate the relationship between Corporate Sustainability and TSR using 944 firm-year observations in Nordic stock markets. We proxy sustainability reporting through Bloomberg's Environmental Social Governance (ESG) scores. Our robustness checks include tests for causality and non-linearity of the relationship. We find a positive relation between CS and TSR. Especially disclosure on governance practices adds shareholder value. Firms that over report, however, experience declines in TSR. The robustness checks confirm our findings. This study highlights the value relevance of disclosing practices that relate to Corporate Sustainability. We extend previous studies that solely focus on disclosure.
AB - The purpose of this paper is to investigate the effects of Corporate Sustainability (CS; actual practices and reporting) on total shareholder returns (TSR). We also investigate the subcomponents of Corporate Sustain ability, i.e., environmental, social, and governance practices. We use fixed effects regression models to investigate the relationship between Corporate Sustainability and TSR using 944 firm-year observations in Nordic stock markets. We proxy sustainability reporting through Bloomberg's Environmental Social Governance (ESG) scores. Our robustness checks include tests for causality and non-linearity of the relationship. We find a positive relation between CS and TSR. Especially disclosure on governance practices adds shareholder value. Firms that over report, however, experience declines in TSR. The robustness checks confirm our findings. This study highlights the value relevance of disclosing practices that relate to Corporate Sustainability. We extend previous studies that solely focus on disclosure.
KW - Corporate social responsibility
KW - ESG
KW - Total shareholder returns
KW - Sustainability reporting
KW - Sustainability management practices
KW - Integrated reporting
KW - Value-based management
KW - Management studies
UR - http://www.scopus.com/inward/record.url?scp=85118560855&partnerID=8YFLogxK
U2 - 10.1016/j.jclepro.2021.127962
DO - 10.1016/j.jclepro.2021.127962
M3 - Journal articles
VL - 315
JO - Journal of Cleaner Production
JF - Journal of Cleaner Production
SN - 0959-6526
M1 - 127962
ER -