Corporate value changes arising from demonstrated sustainability Online publication date: Sat, 21-Feb-2015
by Petr Michlik, Arlyn R. Rubash
International Journal of Sustainable Strategic Management (IJSSM), Vol. 3, No. 1, 2011
Abstract: The importance of corporation attention to sustainability has grown over recent decades. We examine the magnitude of connections between sustainability and company worth. This paper provides insights and summarises mechanisms explaining how company value may be affected by a management decision to adopt steps recognised as sustainable strategies. We assess measurable effects relative to immediate market reactions to significant corporate communications in the realm of sustainability (namely with respect to being a component of Dow Jones Sustainability Index, DJSI). Longer terms connections between corporate sustainability and corporate value are also discussed. We find no significant short-term effect from disclosure of DJSI participation. We divide the potential benefit of a sustainability focus into five areas: investor relations, customer relationships, proximity to regulator, improvement of internal processes and impact on employees. The data suggest that the advantages of sustainable strategies may be significant but if so, are realised over a period of years and investors do not immediately realise benefits from announcements confirming DJSI membership.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Sustainable Strategic Management (IJSSM):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com