University of Cambridge - Judge Business School ; London Business School
Boston College - Department of Finance
Temple University - Department of Accounting
August 7, 2015
Review of Financial Studies (RFS), Volume 28, Issue 12, pp. 3225-3268, 2015.
Fox School of Business Research Paper No. 16-009
We analyze an extensive proprietary database of corporate social responsibility engagements with U.S. public companies from 1999-2009. Engagements address environmental, social, and governance concerns. Successful (unsuccessful) engagements are followed by positive (zero) abnormal returns. Companies with inferior governance and socially conscious institutional investors are more likely to be engaged. Success in engagements is more probable if the engaged firm has reputational concerns and higher capacity to implement changes. Collaboration among activists is instrumental in increasing the success rate of environmental/social engagements. After successful engagements, particularly on environmental/social issues, companies experience improved accounting performance and governance and increased institutional ownership.
Number of Pages in PDF File: 55
Keywords: Engagement, corporate social responsibility (CSR), environmental, social, and governance (ESG), socially responsible investing (SRI), universal ownership, shareholder activism
JEL Classification: G15, G23, G34
Date posted: October 1, 2012 ; Last revised: March 19, 2016