CleanWorld News

Study: Companies that volunteer emissions strategies see stock prices rise

Posted at February 2, 2012

Read the original article at: Study: Companies that volunteer emissions strategies see stock prices rise | Sacramento Business Journal

Green is a new driving force behind business. Consumers want to be assured they’re making the right choices, even as companies meet standards. And now a study finds that companies that plug their emissions strategies saw a financial benefit when they saw stock prices rise.

University of California Davis Graduate School of Management study examined stock prices of companies that publicized their strategies to reduce greenhouse gas emissions. After the announcements, companies had higher stock prices, according to the study.

“When a company makes a voluntary disclosure of this kind, it signals to the investment community that this is a firm that is environmentally responsible,” Paul Griffin, a professor with the graduate school and co-author of the study, said in a statement.

The study, co-authored by Yuan San of the University of California Berkeley, analyzed a number of industries, from information technology, health care, telecommunications, financial services, energy and utilities.

The study examined 172 companies volunteering their emissions information, and found that average stock prices went up about a half of a percent in a week.

The study also looked at companies that didn’t share emissions information, and there was not a significant change in stocks.

“The matched sample companies do not behave the same way as the companies that disclose,” Griffin said.

The study also found that smaller companies divulging emissions information actually saw a greater increase in stock values, 2.32 percent, possibly partly because investors don’t know as much about these companies. The authors think the emissions information thus has a bigger effect.

Click here to read the study, “Going Green: Market Reaction to CSR Newswire Releases.”