Is Greed Good for Green Firms? Evidence From Corporate Donations to Anti-Climate Politicians
Posted: 15 Dec 2021 Last revised: 22 Apr 2022
Date Written: April 20, 2022
Firms with excellent environmental scores donate more to climate-obstructionist politicians. Ownership by “brown” institutional investors who regularly endorse anti-climate politicians is a channel underlying this result. Green firms with more donations to obstructionists experience stock value increases upon the passing of anti-environment bills and upon the election of anti-climate politicians facing close congressional races. These results withstand numerous robustness tests including the use of two major environmental policies as separate exogenous shocks to firms’ environmental scores. Our findings indicate that greed with respect to the environment is value-creating for green firms as supporting anti-climate politicians proves profitable.
Keywords: ESG, Political Donations, Anti-Climate Shareholders, Environmental Laws
JEL Classification: D72; G38; P48; Q58
Suggested Citation: Suggested Citation