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The effect of environmental, social and governance risks

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  • Dogru, Tarik
  • Akyildirim, Erdinc
  • Cepni, Oguzhan
  • Ozdemir, Ozgur
  • Sharma, Abhinav
  • Yilmaz, Muhammed Hasan

Abstract

This study examines the effect of environmental, social and governance risks on firm value. We analyze the extent to which environmental, social and governance related news affect tourism firms' abnormal returns using event study methodology. The results show that environmental, social and governance related news releases do not significantly affect firm value in the short-term. We further investigate the effect of environmental, social and governance risks on the value of tourism firms during the recent pandemic utilizing difference-in-differences analysis. The results provide robust evidence that sustainable business practices provide higher resilience to pandemic-like external shocks. Also, the presence of a sustainability committee mitigates the adverse effects of environmental, social and governance risks on firm value. Theoretical and practical implications are discussed.

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  • Dogru, Tarik & Akyildirim, Erdinc & Cepni, Oguzhan & Ozdemir, Ozgur & Sharma, Abhinav & Yilmaz, Muhammed Hasan, 2022. "The effect of environmental, social and governance risks," Annals of Tourism Research, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:anture:v:95:y:2022:i:c:s0160738322000834
    DOI: 10.1016/j.annals.2022.103432
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    3. Wang, Yangjie & Zang, Shoujuan & Qiang, Hongjie & Wang, Jinxian, 2023. "Air pollution disclosing and tourism: Who are winners?," Annals of Tourism Research, Elsevier, vol. 103(C).
    4. Li, Hui & Zeng, Min & Liu, Ya-Fei, 2023. "Secret sentiments make for good announcements: Does unjustified managerial belief benefit tourism firm performance?," Annals of Tourism Research, Elsevier, vol. 103(C).
    5. C. José García & Begoña Herrero & Francisco Morillas‐Jurado, 2024. "The impact of the environmental, social and governance dimensions of sustainability on firm risk in the hospitality and tourism industry," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2783-2800, July.
    6. Indah Fajarini Sri Wahyuningrum & Linda Agustina & Kuat Waluyo Jati & Muhammad Ihlashul Amal & Sriningsih Sriningsih, 2024. "A Slight Look Environmental Disclosure Score Trends during Covid-19 Outbreak: What’s Driver the Environmental Disclosure in Indonesian Mining and Manufacturing Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 160-171, March.

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