Corporate social performance and stock returns: UK evidence from disaggregate measures

Brammer, S., Brooks, C. ORCID: https://orcid.org/0000-0002-2668-1153 and Pavelin, S. (2006) Corporate social performance and stock returns: UK evidence from disaggregate measures. Financial Management, 35 (3). pp. 97-116. ISSN 1755-053X doi: 10.1111/j.1755-053X.2006.tb00149.x

Abstract/Summary

This study examines the relation between corporate social performance and stock returns in the UK. We closely evaluate the interactions between social and financial performance with a set of disaggregated social performance indicators for environment, employment, and community activities instead of using an aggregate measure. While scores on a composite social performance indicator are negatively related to stock returns, we find the poor financial reward offered by such firms is attributable to their good social performance on the environment and, to a lesser extent, the community aspects. Considerable abnormal returns are available from holding a portfolio of the socially least desirable stocks. These relationships between social and financial performance can be rationalized by multi-factor models for explaining the cross-sectional variation in returns, but not by industry effects.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/20507
Identification Number/DOI	10.1111/j.1755-053X.2006.tb00149.x
Refereed	Yes
Divisions	Henley Business School > Finance and Accounting
Publisher	Wiley
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