The Performance of Environmental and Social Activities in a Crisis

Fassi, Ismail El; Oyón, Daniel; Derchi, Giovanni Battista

doi:10.5465/ambpp.2022.17081abstract

Cited by 1 publication

(1 citation statement)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…for highly impacted industries by the crisis, there was the increased influence of social media followers on customer-related corporate response and a reduced influence of employees on employee-related corporate response. Furthering the application of stakeholder salience theory to the travel and leisure industry, El Fassi et al . (2022) found a neutral relationship between CSR and corporate financial performance (stock return and risk) in times of COVID-19 pandemic.…”

Section: Literature Reviewmentioning

confidence: 99%

Environmental, social and governance performance: influence on market value in the COVID-19 crisis

Bodhanwala

2023

View full text Add to dashboard Cite

PurposeThe aim of this paper is to study whether adoption of sustainability policies by firms makes their stock market performance resilient to the downside risk during the crisis period.Design/methodology/approachThe paper empirically examines the relationship between environmental, social and governance (ESG) and stock market performance for Indian companies that have consistently been a part of Refinitiv Eikon ESG database. Further, the study examines whether there exist significant differences in stock market performance of high ESG and low ESG-compliant firms during crisis period. The sample was made up of 70 Indian firms studied over the period 2016–2019 defined as “normal period” as well as for the declared COVID-19 crisis period, i.e. January–March 2020, and full year 2020. The authors used multivariate panel data regression, robust least square multivariate regression, pooled OLS model and two-stage least square regression method.FindingsThe study extends the existing literature by investigating the impact of ESG performance on market value of firms during the crisis period. Based on the stakeholder and “flight to safety” theory, the authors hypothesized that ESG would have significant positive effect on the stock market performance during crisis period; however, the results provide robust evidence that in a well-specified model capturing the effect of accounting-based measures of performance, Size, Growth, Risk and Dividend yield, ESG had no explanatory power over the stock market performance of ESG-compliant firms during crisis period. Furthermore, no significant difference in stock market performance indicators between high and low ESG-compliant firms was observed during the crisis period of 1Q2020 as well as for full year 2020. On contrary, the study finds dividend yield to be statistically significant in determining stock market performance of Indian firms during crisis period. The study extends the existing literature by coining the term, “ESG irrelevance” during crisis period.Research limitations/implicationsThe main limitation of this study is its limited sample size because there are very few Indian firms that have secured consistent ESG rating. The study focuses on consistently rated firms to avoid the impact of “greenwashing”. Further, the study is focused on India, which limits the generalizability of our findings to other emerging countries.Originality/valueTo the best of our knowledge, this is among the first few studies that examines sustainability and stock market performance of Indian firms during COVID-19-led crisis period. Our findings highlight no significant difference between stock market performance of high ESG firms and low ESG firms indicating that investors who wish to create wealth by investing in ESG-compliant stocks in India can do so without worrying about the companies’ ESG rating scores.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Environmental, social and governance performance: influence on market value in the COVID-19 crisis

Bodhanwala

2023

View full text Add to dashboard Cite

show abstract

The Performance of Environmental and Social Activities in a Crisis

Cited by 1 publication

References 0 publications

Environmental, social and governance performance: influence on market value in the COVID-19 crisis

Environmental, social and governance performance: influence on market value in the COVID-19 crisis

Contact Info

Product

Resources

About