From Ashes to Action: The Effect of Wildfires on the Growth of Local Corporate Environmental Sustainability in Areas where Governments are Eco-friendly But Lack Commitment

66 Pages Posted: 20 Jul 2020 Last revised: 6 Feb 2024

See all articles by Ioannis Branikas

Ioannis Branikas

University of Oregon, Lundquist College of Business, Department of Finance

Gabriel Buchbinder

University of Oregon - Charles H. Lundquist School of Business

Yugang Ding

Guangdong University of Foreign Studies School of Finance; Peking University

Nan Li

University of Toronto - Rotman School of Management; University of Toronto at Scarborough - Division of Management

Date Written: July 1, 2020

Abstract

Extracting data on wildfires and measuring an area's corporate sustainability using its firms' ESG ratings, we show that severe wildfires in a county significantly enhance its corporate environmental sustainability growth. To address the omitted variables concern, we use as an instrument the Hot Dry-Windy Index. The impact dominates in counties whose governments participate in voluntary environmental programs. Within that set of counties, the effect is stronger when the environmental commitment of local governments is low, suggesting that, given an area's eco-friendly inclination, local firms take initiatives after a severe wildfire to fill in the gaps in public officials' engagement with sustainability.

Keywords: Corporate Social Responsibility (CSR), Sustainability (ESG), Environmental Disasters, Wildfires, Climate Change, Government Environmental Sustainability and Commitment (ICLEI)

JEL Classification: D22, D64, G3, G30, M14, Q01, Q50, Q51, Q53, Q54, Q56, Q58

Suggested Citation

Branikas, Ioannis and Buchbinder, Gabriel and Ding, Yugang and Li, Nan, From Ashes to Action: The Effect of Wildfires on the Growth of Local Corporate Environmental Sustainability in Areas where Governments are Eco-friendly But Lack Commitment (July 1, 2020). Available at SSRN: https://ssrn.com/abstract=3640791 or http://dx.doi.org/10.2139/ssrn.3640791

Ioannis Branikas (Contact Author)

University of Oregon, Lundquist College of Business, Department of Finance ( email )

Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States

Gabriel Buchbinder

University of Oregon - Charles H. Lundquist School of Business ( email )

1208 University of Oregon
Eugene, OR 97403-1208
United States

Yugang Ding

Guangdong University of Foreign Studies School of Finance ( email )

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Nan Li

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada
416-946-3126 (Phone)

University of Toronto at Scarborough - Division of Management ( email )

1265 Military Trial
Scarborough, Ontario M1C 1A4
Canada

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