Author : Karen Fisher-Vanden
Publisher :
ISBN 13 :
Total Pages : 51 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis Voluntary Corporate Environmental Initiatives and Shareholder Wealth by : Karen Fisher-Vanden
Download or read book Voluntary Corporate Environmental Initiatives and Shareholder Wealth written by Karen Fisher-Vanden and published by . This book was released on 2010 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Researchers debate whether environmental investments reduce firm value or actually improve financial performance. We provide some compelling evidence on shareholder wealth effects of membership in voluntary environmental programs (VEPs). Companies announcing membership in EPA's Climate Leaders, a program targeting reductions in greenhouse gas emissions, experience significantly negative abnormal stock returns. The price decline is larger in firms with poor corporate governance structures, and for high market-to-book (i.e., high growth) firms. However, firms joining Ceres, a program involving more general environmental commitments, have insignificant announcement returns, as do portfolios of industry rivals. Overall, corporate commitments to reduce greenhouse gas emissions appear to conflict with firm value-maximization. This has important implications for policies that rely on voluntary initiatives to address climate change. Further, we find that firms tend to join Climate Leaders either in response to climate-related shareholder resolutions or due to weak corporate governance standards which give managers the discretion to make such voluntary environmentally responsible investment decisions mdash; decisions that may result in lower firm value.