{"62462":{"#nid":"62462","#data":{"type":"news","title":"Study: Corporate Environmentalism Can Both Help, Hurt Stock Performance","body":[{"value":"\u003Cp\u003EWhile pleasing to green activists, some corporate efforts to\nbe environmentally friendly play better on Wall Street than others, according\nto a new study by Georgia Tech College of Management researchers.\u003C\/p\u003E\n\u003Cp\u003EThey found that announcements of major philanthropic gifts\nto benefit environmental causes tend to improve companies\u0027 stock price\nperformance. But that the reverse is true when it comes to announcing voluntary\nemission reductions.\u003C\/p\u003E\n\u003Cp\u003E\u0022Philanthropy can generate positive publicity and\ngoodwill among various stakeholders and can create value through more loyal\ncustomers and highly motivated employees\u2026.,\u0022 write the researchers in the\nstudy, published in the September 2010 issue of the\u003Cem\u003E Journal of Operations Management\u003C\/em\u003E. \u0022But the market reacts\nnegatively to voluntary emission reductions\u2026.Therefore, announcements of\nvoluntary emission reduction efforts should be accompanied by formal\njustifications as to why these efforts are being conducted (for instance,\npreparing for future legislation, competitive lobbying, or anticipated carbon\ntrading) and what the expected value from these efforts is likely to be.\u0022\u003C\/p\u003E\n\u003Cp\u003ETitled \u0022An empirical investigation of environmental\nperformance and the market value of a firm,\u0022 the study was conducted by\nVinod Singhal and Ravi Subramanian, a professor and assistant professor\n(respectively) of operations management at Georgia Tech in collaboration with\nBrian Jacobs of Michigan State University \u2013 a recent graduate of Georgia Tech\nCollege of Management\u0027s PhD program.\u003C\/p\u003E\n\u003Cp\u003EThe researchers studied the effects on stock prices of two\ntypes of environment-related announcements: corporate environmental initiatives\n(such as environmental business strategies, philanthropy, emission reductions,\neco-friendly products, renewable energy, and recycling) and environmental\nawards and certifications (LEED, ISO 14001, governmental and non-governmental).\nTheir results are based on an analysis of 780 announcements that appeared in\nthe daily business press from 2004 to 2006. They estimated the impact on stock prices\nover two days \u2013 the day of and the day before the announcement.\u003C\/p\u003E\n\u003Cp\u003EOn the whole, they found that most announcements have little\neffect on stock prices. \u0022Most of the time the effect is neutral,\u0022\nexplains Singhal. \u0022A lot of people think environmental initiatives are\nwin-win situations, but that doesn\u0027t necessarily seem to be the case\nfinancially. The good news is that it\u0027s not hurting companies in most\ninstances. So from a social perspective, they might still want to pursue\nopportunities to be environmentally friendly.\u0022\u003C\/p\u003E\n\u003Cp\u003EThe types of announcements that do significantly affect\nstock prices are the aforementioned philanthropic gifts (an increase of 0.46%)\nand voluntary emission reductions (a dip of 0.95%) as well as ISO 14001\ncertification, an international standard in the design and implementation of\neffective environmental management systems (an increase of 0.77%). The broad stock\nmarket typically moves about 1 percent a month.\u003C\/p\u003E\n\u003Cp\u003E\u0022Our results also indicate that the market reacts more\npositively to corporate environmental initiatives that are achievements as\nopposed to intents,\u0022 Singhal says. \u0022Since achievements provide a\nclearer signal of realized or future cost reductions and revenue gains,\ncompanies might want to place greater emphasis on those types of announcements\nin their external communications.\u0022\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003EWhile pleasing to green activists, some corporate efforts to\nbe environmentally friendly play better on Wall Street than others, according\nto a new study by Georgia Tech College of Management researchers.\u003C\/p\u003E","format":"limited_html"}],"field_summary_sentence":[{"value":"Some corporate efforts to be environmentally friendly play better on Wall Street than others."}],"uid":"27304","created_gmt":"2010-11-01 17:02:25","changed_gmt":"2016-10-08 03:07:42","author":"Matthew Nagel","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2010-11-01T00:00:00-04:00","iso_date":"2010-11-01T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"57063":{"id":"57063","type":"image","title":"Tech Tower","body":null,"created":"1449175327","gmt_created":"2015-12-03 20:42:07","changed":"1475894378","gmt_changed":"2016-10-08 02:39:38","alt":"Tech Tower","file":{"fid":"190534","name":"tgs93055.jpg","image_path":"\/sites\/default\/files\/images\/tgs93055_0.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/tgs93055_0.jpg","mime":"image\/jpeg","size":60499,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/tgs93055_0.jpg?itok=XdZvPISn"}},"62460":{"id":"62460","type":"image","title":"Vinod Singhal","body":null,"created":"1449176369","gmt_created":"2015-12-03 20:59:29","changed":"1475894523","gmt_changed":"2016-10-08 02:42:03","alt":"Vinod Singhal","file":{"fid":"191625","name":"Vinod_Singhal.jpg","image_path":"\/sites\/default\/files\/images\/Vinod_Singhal.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/Vinod_Singhal.jpg","mime":"image\/jpeg","size":65616,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/Vinod_Singhal.jpg?itok=qDwLk1a1"}},"62461":{"id":"62461","type":"image","title":"Ravi Subramanian","body":null,"created":"1449176369","gmt_created":"2015-12-03 20:59:29","changed":"1475894541","gmt_changed":"2016-10-08 02:42:21","alt":"Ravi Subramanian","file":{"fid":"191626","name":"Ravi_Subramanian.jpg","image_path":"\/sites\/default\/files\/images\/Ravi_Subramanian.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/Ravi_Subramanian.jpg","mime":"image\/jpeg","size":65383,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/Ravi_Subramanian.jpg?itok=DBe9JXbX"}}},"media_ids":["57063","62460","62461"],"groups":[{"id":"1183","name":"Home"}],"categories":[{"id":"139","name":"Business"},{"id":"135","name":"Research"}],"keywords":[{"id":"1072","name":"Business"},{"id":"11114","name":"Environmentalism"},{"id":"9313","name":"Georgia Tech College of Management"},{"id":"168076","name":"Stocks"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003E\u003Cbr \/\u003E\u003Cem\u003E\u003Cstrong\u003EBrad Dixon\u003C\/strong\u003E\u003C\/em\u003E\u003Cbr \/\u003EAssistant Director of Communications\u003Cbr \/\u003E404.894.3943\u003Cbr \/\u003E\u003Ca href=\u0022mailto:brad.dixon@mgt.gatech.edu\u0022\u003Ebrad.dixon@mgt.gatech.edu\u003C\/a\u003E\u003C\/p\u003E","format":"limited_html"}],"email":["brad.dixon@mgt.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}