Eco-Friendly Policies and Financial Performance: Was the Financial Crisis a Game Changer for Large US Companies?

22 Pages Posted: 21 Jan 2021

See all articles by Mikael Petitjean

Mikael Petitjean

Catholic University of Lille - IÉSEG School of Management, Lille Campus; Lille Economie & Management (LEM) UMR 9221; Louvain School of Management (UCL); Catholic University of Louvain (UCL) - Louvain Finance (LFIN)

Date Written: January 7, 2019

Abstract

Whether companies implementing eco-friendly policies are better immune to negative shocks in financial performance during crisis times and perform differently after the shocks remains an open question. We gather information on firms' CSR performance from the Bloomberg ESG Database, which contains environmental, social, and governance measures for thousands of companies. We build a panel dataset of large US caps included in the S&P 500 index between fiscal year 2005 and 2017. Controlling for financial health, social and governance performance, we employ seven proxies for environmental performance and look at both accounting- and market-based financial performance. We find that the existence of emission reduction or climate change policies in large US companies does not seem to be broadly associated with financial performance. Whether or not we condition the analysis on the occurrence of the 2008–2009 financial crisis, we do not observe clear-cut changes over time. Overall, we find weak evidence supporting the hypothesis that the relation between financial performance and environmental performance is specific to periods of low trust.

Keywords: Financial crisis, Environmental performance, Financial performance

JEL Classification: G10, G01

Suggested Citation

Petitjean, Mikael, Eco-Friendly Policies and Financial Performance: Was the Financial Crisis a Game Changer for Large US Companies? (January 7, 2019). Energy Economics, Vol. 80, 2019, Available at SSRN: https://ssrn.com/abstract=3769043 or http://dx.doi.org/10.2139/ssrn.3769043

Mikael Petitjean (Contact Author)

Catholic University of Lille - IÉSEG School of Management, Lille Campus ( email )

3 rue de la Digue
Lille, 59000
France
0032497301266 (Phone)
59000 (Fax)

Lille Economie & Management (LEM) UMR 9221 ( email )

Lille
France

Louvain School of Management (UCL) ( email )

Belgium

Catholic University of Louvain (UCL) - Louvain Finance (LFIN) ( email )

34 Voie du Roman Pays - L1.03.01
Louvain-la-Neuve, 1348
Belgium

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
15
Abstract Views
95
PlumX Metrics