Does it pay to invest in environmental stocks?

Tzouvanas, Panagiotis and Mamatzakis, Emmanuel C (2021) Does it pay to invest in environmental stocks? International Review of Financial Analysis, 77. a101812 1-15. ISSN 1057-5219

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Abstract

This paper examines market-based returns and risks of environmental vis-à-vis non environmental stocks from a portfolio selection point of view. The selection of environmental stocks is a function of greenhouse gas emissions of firms in S&P 500 for the period from 2005 to 2018. Our findings show that stocks with superior environmental performance have lower idiosyncratic risk, but higher systematic risk, while we also control for endogeneity issues. We show that that it pays to invest in environmental stocks. Robustness analysis, such as counterfactual regressions and panel VAR, confirms our main findings, though it demonstrates some of underlying complexities.

Item Type: Article
Keywords: environmental stocks, firm risk, stock return
Schools and Departments: University of Sussex Business School > Accounting and Finance
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 11 Jun 2021 14:55
Last Modified: 25 Oct 2021 12:36
URI: http://sro.sussex.ac.uk/id/eprint/99744

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