Green revenues and stock returns: Cross-market evidence

Bassen, Alexander; Shu, Hao; Tan, Weiqiang

doi:10.1016/j.frl.2022.103550

Cited by 12 publications

(3 citation statements)

References 16 publications

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“…This allowed for calculation of portfolio level metrics such as carbon intensity, and the ability to measure a portfolio against targets. The concept of Green Revenues (Bassen et al 2022) signalled a change in focus towards opportunities associated with transitions to sustainable business activities. More recently, the investment community has developed a focus on measuring the intent of companies, which has led to the creation of 'forward-looking' metrics that document how companies are planning to move towards sustainability goals.…”

Section: The Carbon Modelmentioning

confidence: 99%

Short term solutions to biodiversity conservation in portfolio construction: forward looking disclosure and taxonomy-based metrics

Layman¹,

Akçakaya²,

Irwin³

et al. 2023

Preprint

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Demand is increasing amongst investors to create portfolios that encourage positive outcomes for biological diversity. The evolution of investment strategies for transitions to zero carbon over the last two decades provides insights that will assist in shaping strategies for biodiversity-positive investments. Many emerging approaches to capture company impact and dependence on biodiversity focus on nature-related threats to an organisation by looking at the composition of local ecosystems and sustaining ecosystem services. Other approaches have a different objective function, focusing on minimizing an organisation’s contribution to risks of species extinction by using data sets such as the IUCN’s Red List of Threatened Species. However, in both cases, many of the threat assessments that could link corporate activities to impacts are incomplete and omit critical information, and the models that use these links are largely untested for use in portfolio construction. If the investment community focuses on biodiversity without sufficient forethought, there is a risk of entrenching metrics with significant flaws. In this paper we suggest that until such time as species threat assessments are complete and the metrics to which they contribute are fully developed and tested for use, interim approaches to guide investments can leverage off disclosure-based or taxonomy-based approaches developed for climate investing. We present and discuss two potential such metrics, a Biodiversity Management Quality metric and a Biodiversity Revenues metric.

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Section: The Carbon Modelmentioning

confidence: 99%

Short term solutions to biodiversity conservation in portfolio construction: forward looking disclosure and taxonomy-based metrics

Layman¹,

Akçakaya²,

Irwin³

et al. 2023

Preprint

View full text Add to dashboard Cite

show abstract

“…This allowed for the calculation of portfolio-level metrics such as carbon intensity and the ability to measure a portfolio against targets. The concept of Green Revenues (Bassen et al, 2023) signalled a change in focus towards opportunities associated with transitions to sustainable business activities. More recently, the investment community has developed a focus on measuring the intent of companies, which has led to the creation of 'forward-looking' metrics that document how companies are planning to move towards sustainability goals.…”

Section: The Carbon Modelmentioning

confidence: 99%

Short‐term solutions to biodiversity conservation in portfolio construction: Forward‐looking disclosure and classification‐based metrics

Layman,

Akçakaya,

Irwin

et al. 2023

Bus Strat Env

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Demand is increasing among investors to create portfolios that encourage positive outcomes for biological diversity. The evolution of investment strategies for transitions to zero carbon over the last two decades provides insights that will assist in shaping strategies for biodiversity‐positive investments. Many emerging approaches to capture company impact and dependence on biodiversity focus on nature‐related threats to an organisation by assessing ecosystem integrity. Other approaches focus on minimising an organisation's contribution to risks of species extinction by using data sets such as the IUCN's Red List of Threatened Species. However, while these approaches are useful for assessing threats to and from biodiversity for individual companies, to be effective for investment portfolio construction, metrics need to be comparable across companies in an investment universe. Many of the threat assessments that could link corporate activities to impacts are incomplete and omit critical information. If the investment community focuses on biodiversity without sufficient forethought, there is a risk of entrenching metrics with significant flaws. In this paper, we suggest that interim approaches are needed to support investors in understanding the approaches being taken by potential investee companies. To that end, we present and discuss a disclosure‐based Biodiversity Management Quality and a classification‐based Biodiversity Revenues metric for biodiversity‐related investing.

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“…These studies provide evidence that companies with a strong green image tend to gain various benefits, including higher stock returns (Glavas, 2020;Qodratilah, 2021). For example, research by (Bassen et al, 2023;Glavas, 2020;Purwaningsih, 2017;Zulhaimi, 2015) found that companies with a positive green image experience better stock market performance compared to those with a weaker green image. Their studies show a positive relationship between green image and stock returns, highlighting the potential financial benefits of maintaining a strong environmental reputation (Adamska & Dąbrowski, 2021;Purwaningsih, 2017;Zheng et al, 2021) The role of green image as a moderator in the relationship between beta and stock returns has also been studied in the literature (Chen & Lee, 2018;Chen et al, 2020;Luo, 2022).…”

Section: Introductionmentioning

confidence: 99%

Moderating Effect of Green Image: The Influence of Beta on Stock Return

Sailendra

2023

J. Bus. Manag. Econ. Development.

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This study aims to analyze the influence of green image on beta and stock return by considering the moderating effect of green image. The research sample consists of 44 proper companies listed in the Indonesia Stock Exchange (IDX) from 2018 to 2022, with a total of 220 year-observations. The study was analyzed using SEM-PLS statistics. The results indicated that green image does not have a significant impact on stock returns but shows a positive directional relationship. Similarly, beta also has no significant effect on stock returns but shows a positive relationship. As a moderating variable, green image moderates the effect of beta on stock returns in a negative direction. This study concludes that companies with a weak green image tend to experience a decrease in stock returns, and vice versa. In this case, green image acts as a moderating factor that affects the strength of the relationship between beta and stock returns. The findings of this study have important implications for practitioners and decision makers in evaluating and improving corporate image related to environmental issues. In addition, this study contributes to the academic literature in the accounting, finance and sustainability by providing a better understanding of the relationship between green image, beta, stock returns, and relevant moderating factors.

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Green revenues and stock returns: Cross-market evidence

Cited by 12 publications

References 16 publications

Short term solutions to biodiversity conservation in portfolio construction: forward looking disclosure and taxonomy-based metrics

Short term solutions to biodiversity conservation in portfolio construction: forward looking disclosure and taxonomy-based metrics

Short‐term solutions to biodiversity conservation in portfolio construction: Forward‐looking disclosure and classification‐based metrics

Moderating Effect of Green Image: The Influence of Beta on Stock Return

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