- List of Figures
- List of Tables
- List of Abbreviations
- List of Contributors
- Retrospective, Perspective, and Prospective: Introduction to the Oxford Handbook on Business and the Natural Environment
- Competitive Strategy and the Environment: A Field of Inquiry Emerges
- International Business and the Environment
- Environmental Entrepreneurship
- The Value of Managing Stakeholders
- Industry Self-Regulation and Environmental Protection
- Environmental Governance
- Business and Environmental Law
- Cognitive Barriers to Environmental Action: Problems and Solutions
- Intergenerational Beneficence and the Success of Environmental Sustainability Initiatives in Organizational Contexts
- Organizational Culture and Environmental Action
- Institutional Approaches to Organizations and the Natural Environment
- Institutional Pressures and Organizational Characteristics: Implications for Environmental Strategy
- Social Movements, Business, and the Environment
- Greener Supply Chain Management
- Closed-Loop Supply Chains
- Industrial Ecology: Business Management in a Material World
- Information Systems, Business, and the Natural Environment: Can Digital Business Transform Environmental Sustainability?
- From Green Marketing to Marketing for Environmental Sustainability
- Why not Choose Green? Consumer Decision Making for Environmentally Friendly Products
- Using Market Segmentation Approaches to Understand the Green Consumer
- Sustainability and Social Responsibility Reporting and the Emergence of the External Social Audits: The Struggle for Accountability?
- Environmental Management, Measurement, and Accounting: Information for Decision and Control?
- Corporate Environmental Financial Reporting and Financial Markets
- Values-Driven and Profit-Seeking Dimensions of Environmentally Responsible Investing
- Environmental Risks and Financial Markets: A Two-Way Street
- Corporate Decision-Making, Net Present Value, and the Environment
- The Relevance of the Natural Environment for Corporate Social Responsibility Research
- Business, Society, and the Environment
- The New Corporate Environmentalism and the Symbolic Management of Organizational Culture
- Critical Perspectives on Business and the Natural Environment
- Approaching Business and the Environment with Complexity Theory
- Beyond the Brave New World: Business for Sustainability
- Looking Back, Thinking Forward: Distinguishing Between Weak and Strong Sustainability
- Enterprise Sustainability 2.0: Aesthetics of Sustainability
- Tomorrow's C-Suite Agenda
- The Third-Generation Corporation
- Capitalism Critique: Systemic Limits on Business Harmony with Nature
Abstract and Keywords
This article analyzes theoretical studies on environmentally responsible investing, empirical studies on investor behavior, and evidence on the returns of environmentally screened investments. It also explains the implications of the values-driven and profit-seeking movements for practitioners and researchers. Values-driven investors can affect the functioning of financial markets, and ultimately persuade firms to be environmentally more responsible. It then addresses the empirical questions on the effect of values-driven investors on capital costs and stock returns. Investors in the financial market could be surprised about the value-relevance of certain information about corporate environmental performance. Recent research concludes that values-driven and profit-seeking investors co-exist. It is noted that investors fully anticipate the negative effects of poor environmental performance on firms' future cash flows, but not fully the potentially positive effects linked with strong environmental performance. It is concluded that environmentally responsible investing attracts both values-driven investors and profit-seeking investors.
Rob Bauer is Manager of the Research Department of ABP Investments and Professor of Finance at Maastricht University in the Netherlands. His present research focus is on asset liability management, risk budgeting, stock selection models, socially responsible investments (SRI), and corporate governance. His recent work has been published in The Journal of Banking and Finance and Financial Analysts Journal. He is a member of the board of the postgraduate course on investments at the Free University of Amsterdam, and teaches on various executive courses, among others IIR, TIAS, AIF, and the Dutch Financial Analysts Association (VBA). Address is Limburg Institute of Financial Economics, University of Maastricht, PO Box 616, 6200 MD Maastricht, Netherlands. Email: firstname.lastname@example.org
Jeroen Derwall, Assistant Professor of Finance, Maastricht University, European Centre for Corporate Engagement (ECCE), and Assistant Professor, Tilburg Sustainability Center (TSC), Tilburg University, Netherlands.
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