Is Greed Good for Green Firms? Evidence From Corporate Donations to Anti-Climate Politicians

Posted: 15 Dec 2021 Last revised: 22 Apr 2022

See all articles by Eliezer M. Fich

Eliezer M. Fich

Drexel University - Department of Finance

Guosong Xu

Rotterdam School of Management, Erasmus University

Date Written: April 20, 2022

Abstract

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

Fich, Eliezer M. and Xu, Guosong, Is Greed Good for Green Firms? Evidence From Corporate Donations to Anti-Climate Politicians (April 20, 2022). Available at SSRN: https://ssrn.com/abstract=3980416

Eliezer M. Fich

Drexel University - Department of Finance ( email )

LeBow College of Business
3220 Market Street – 11th Floor
Philadelphia, PA 19104
(215) 895-2304 (Phone)

Guosong Xu (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

Rotterdam
Netherlands

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

Paper statistics

Abstract Views
374
PlumX Metrics