The independent effects of environmental, social and governance initiatives on the performance of UK firms
- 11 June 2012
- journal article
- Published by SAGE Publications in Australian Journal of Management
- Vol. 37 (2), 135-151
- https://doi.org/10.1177/0312896211410081
Abstract
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.Keywords
This publication has 25 references indexed in Scilit:
- Revisiting the Vexing Question: Does Superior Corporate Social Performance Lead to Improved Financial Performance?Australian Journal of Management, 2009
- The “Best Corporate Citizens”: Are They Good for Their Shareholders?The Financial Review, 2009
- The Financial Review, 2009
- Universal Owners: challenges and opportunitiesCorporate Governance: An International Review, 2007
- Is Corporate Sustainability a Value‐Increasing Strategy for Business?Corporate Governance: An International Review, 2007
- Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate MeasuresFinancial Management, 2006
- Socially Responsible IndexesThe Journal of Portfolio Management, 2006
- Corporate Governance and Equity PricesThe Quarterly Journal of Economics, 2003
- Human Resource Systems and Sustained Competitive Advantage: A Competency-Based PerspectiveAcademy of Management Review, 1994
- An investigation of corporate social responsibility reputation and economic performanceAccounting, Organizations and Society, 1993