Investor Rewards to Environmental Responsibility: Evidence from the COVID-19 Crisis

55 Pages Posted: 8 Jun 2020 Last revised: 27 Feb 2021

See all articles by Alexandre Garel

Alexandre Garel

Audencia Business School

Arthur Romec

Toulouse Business School

Date Written: June 5, 2020


The COVID-19 shock and its unprecedented financial consequences have brought about vast uncertainty concerning the future of climate actions. We study the cross-section of stock returns during the COVID-19 shock to explore investors’ views and expectations about environmental issues. The results show that firms with responsible strategies on environmental issues experience better stock returns. This effect is mainly driven by initiatives addressing climate change (e.g., reduction of environmental emissions and energy use), is more pronounced for firms with greater ownership by investors with long-term orientation and is not observed prior to the COVID-19 crisis. Overall, the results indicate that the COVID-19 shock has not distracted investors’ attention away from environmental issues but on the contrary led them to reward climate responsibility to a larger extent.

Keywords: COVID-19, Financial Crisis, Environmental Responsibility, Climate Change

Suggested Citation

Garel, Alexandre and Romec, Arthur, Investor Rewards to Environmental Responsibility: Evidence from the COVID-19 Crisis (June 5, 2020). Available at SSRN: or

Alexandre Garel (Contact Author)

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312

Arthur Romec

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068

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