Voluntary Carbon Disclosure Produces Positive Returns for Shareholders

Nonsense.

From a CSRWire news release:

What is the relationship between voluntarily disclosing your Greenhouse Gas Emissions (GHG) and CSRwire? According to a new study conducted by the University of California Davis and Berkeley, companies saw significant increases in their stock prices just days after issuing corporate social responsibility (CSR) releases through CSRwire.

Titled Going Green: Market Reactions to CSR Newswire Releases, the study was conducted by two University of California management professors Paul Griffin, Ph.D. and Yuan Sun, Ph.D.

Their motivation: “A lot of people were saying we need to engage in a climate change strategy but there was little or no evidence that this was improving shareholder value,” says Dr. Griffin, adding, “We wanted to look at whether there was an association between voluntary disclosure and shareholder price”…

Some thoughts:

  • The claimed relationship between carbon disclosure and stock price increase are mere correlations — not demonstrated cause-and-effect — and probably chance correlations at that.
  • The researchers pretend that the only factor affecting stock price is the disclosure — ignoring other myriad company, industry and market factors.
  • Giving the researchers the benefit of doubt, an ephemeral stock price rise of 1-2 percent is hardly anything to write home about.
  • Economist Art Laffer did the first empirical study of CSR and profitability in 2004. He found no relationship.
  • Nothing has changed since Laffer did his paper.

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