Certain economic actors are considered by many as involved in or associated with an activity that is considered unethical or immoral, such as the producers of tobacco, alcohol and firearms (often referred to as sin stocks). In an environment in which stakeholders are increasingly interested in sustainable development and corporate social responsibility, it is important to understand how firms respond to these issues which divide public opinion. Our study compares the environmental, social and governance (ESG) performance for a targeted sample of 79 sin stocks and a control group of comparable firms. We observe that sin stocks have a lower overall ESG performance as well as for each of the three ESG pillars, and that this difference is more significant in relation to governance and some key social and environmental issues for which sin stocks could have compensated risk exposure with responsible management practices. In other words, our results demonstrate that sin stocks are exposed to more severe ESG issues and consistently lack the necessary practices to mitigate these issues. Our study provides relevant insights into the informativeness of ESG scores to distinguish firms (and sectors) investing in management practices that offset ESG risk exposure.
机构:
China Life Insurance Grp Co, Postdoctoral Res Stn, Beijing 100033, Peoples R China
Nankai Univ, Postdoctoral Mobil Stn, Tianjin 300071, Peoples R China
Univ Int Business & Econ, China Sch Banking & Finance, Beijing 100029, Peoples R ChinaChina Life Insurance Grp Co, Postdoctoral Res Stn, Beijing 100033, Peoples R China
Chai, Hongrui
Cheng, Zhenhao
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机构:
Univ Int Business & Econ, China Sch Banking & Finance, Beijing 100029, Peoples R ChinaChina Life Insurance Grp Co, Postdoctoral Res Stn, Beijing 100033, Peoples R China
Cheng, Zhenhao
Wu, Weixing
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机构:
Capital Univ Econ & Business, Sch Finance, 121 Zhangjialukou, Beijing 100070, Peoples R ChinaChina Life Insurance Grp Co, Postdoctoral Res Stn, Beijing 100033, Peoples R China
机构:
Natl Energy Univ, Sultan Hj Ahmad Shah Campus, Muadzam Shah, Pahang, MalaysiaNatl Energy Univ, Sultan Hj Ahmad Shah Campus, Muadzam Shah, Pahang, Malaysia
Mohamad, Nor Edi Azhar
Saad, Noriza Mohd
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机构:
Natl Energy Univ, Sultan Hj Ahmad Shah Campus, Muadzam Shah, Pahang, MalaysiaNatl Energy Univ, Sultan Hj Ahmad Shah Campus, Muadzam Shah, Pahang, Malaysia
Saad, Noriza Mohd
Abdullah, Fatihah Norazami
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机构:
Univ Teknol Mara, Merbok Campus, Merbok, Kedah, MalaysiaNatl Energy Univ, Sultan Hj Ahmad Shah Campus, Muadzam Shah, Pahang, Malaysia
Abdullah, Fatihah Norazami
9TH INTERNATIONAL ECONOMICS AND BUSINESS MANAGEMENT CONFERENCE (IEBMC 2019),
2020,
100
: 532
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540