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What investors’ behavior tells us about firms with responsible strategies on environmental and climate issues during COVID -19 crisis

July 29, 2020
What investors’ behavior tells us about firms with responsible strategies on environmental and climate issues during COVID -19 crisis

According to recent research key findings, firms with greater environmental responsibility have better stock returns. It seems that the COVID-19 shock led investors to reward environmental responsibility to a large extent. The Center for Sustainability and Excellence (CSE) innovates in sustainability training and consulting and has an ambitious agenda for 2020 to continue supporting Fortune 500 and other organizations and keep them up to date with the latest research insights and best practices in Corporate Responsibility and Sustainability.

Using data from Thomson Reuters Asset4 ESG database for a sample of large US listed companies, Alexandre Garel ( Audencia Business School) and Arthur Petit-Romec ( SKEMA Business School) examine whether a firm’s environmental score affects its stock market reaction to the COVID-19 shock. The positive association between environmental responsibility and stock returns during the COVID-19 shock is significantly more pronounced for firms with greater long- term investor ownership.

Summing up the most important research insights:

  • The first semester of 2020 marked a surge in climate actions, with investors pilling pressure on companies to tackle global warming and climate change resolutions
  • For investors, environmental issues and in particular carbon emissions are likely to become an increasingly important factor for portfolio compositions and the pricing of stocks in the post-COVID world
  • The COP 21 Paris Agreement in 2015 may have played an important part in raising awareness on climate issues
  • The COVID-19 pandemic may mark a turning point in the relationship between environmental responsibility and financial performance

C-level executives and sustainability managers must take into consideration that companies with responsible initiatives on environmental climate issues are expected to do better in the future.

  • ESG Performance Certificate: This online course focuses on most widely used, globally, ESG ratings (CDP, DJSI, GMI ESG Ratings, CSRHub, Bloomberg), a Certificate on ESG Performance by the leading training provider on Sustainability, practical, updated knowledge on ESG issues and indicators, standards and rankings. Investors & Sustainability Professionals should register for this course
  • Always at the forefront of trends, CSE has had a suite of certified online courses since 2010.  This year, with the advent of COVID-19, CSE launched a digital version of its flagship course, the Certified Sustainability (CSR) Practitioner Program, Advanced Edition 2020.  This challenging, three-day digital training provides the latest practical tools and resources to implement or upscale corporate sustainability initiatives to the next level by generating value and creating effective strategies.

For more information on bringing a customized training to your team, contact [email protected]

Stay tuned for more information and check our upcoming open digital programs here


CSE Research Team

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