When and where does it pay to be green? – A look into socially responsible investing and the cost of equity capital

International Journal of Corporate Social Responsibility

Original Article

Michael S. Delgado¹  Yanbing Wang²  Jin Xu³ 

[1] Department of Agricultural Economics, Purdue University, West Lafayette, IN, USA;Economic Modeling and Policy Analysis Group, Agroscope, Tänikon, Switzerland;Agricultural Economics and Policy Group, ETH Zürich, Zürich, Switzerland;Pamplin College of Business, Virginia Tech, Blacksburg, VA, USA;

关键词: Socially responsible investing;    Corporate environmental performance;    Corporate social responsibility ;    Environmental, social, corporate governance;    Environmental self-regulation;   

DOI  :  10.1186/s40991-023-00077-5

 received in 2021-11-09, accepted in 2023-01-14,  发布年份 2023

来源: Springer

【 摘 要 】

We investigate the circumstances under which socially responsible investing (SRI) enhances firm long-term financial performance, and therefore provides incentives for firms to self-regulate their environmental performance. Aggregating portfolios across SRI mutual funds, we estimate the effect of SRI investment with environmental screening criteria on firm cost of equity capital. We find that accounting for interactions between firm and non-shareholder stakeholders, and potential agency costs associated with certain environmental activities of the firm, SRI can facilitate the alignment of firms’ environmental and financial goals. We also find that an industry group’s environmental performance and diversity influence the extent to which a firm in that group can benefit from SRI investment.

【 授权许可】

CC BY   
© The Author(s) 2023

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