Stock price reactions to Environmental CSR

This paper examines the shareholder’s reactions to environmental news. The study was based on publicly traded companies within Europe with news events ranging from 2000 to 2017. An event study was performed to measure the effect of eco-friendly and eco-harmful events on the stock prices. The sample consists of 98 eco-harmful events and 99 eco-friendly events. This paper finds that there is a significant price decrease following eco-harmful events and a significant increase following eco-friendly events. Furthermore, stock prices react stronger to eco-harmful news then to eco-friendly news. It was also concluded that the reactions to eco-harmful news are increasing throughout time, while the reactions to eco-friendly news are decreasing.