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Corporate SDG performance and investor trading behavior

Author

Listed:
  • Yang, Xinglong
  • Chen, Zhang-HangJian
  • Feng, Yujia
  • Gao, Xiang
  • Koedijk, Kees G.

Abstract

This paper employs a novel sustainability rating from Robeco to examine the response of investors to firms’ SDG performance. We explore the underlying mechanism from the perspective of corporate reputation and financial performance. Our finding suggests that better SDG performance leads to a net outflow of funds, especially from individual investors. Such implication may be due to the existence of greenwashing behaviors by management, as firms’ sustainability performance in the society dimension significantly improves its reputation, but not its financial performance. Furthermore, the negative impact of SDG performance on individual investors’ fund flows becomes markedly pronounced in state-owned, heavily polluting, Northwest region enterprises and after the introduction of the “dual carbon” targets.

Suggested Citation

  • Yang, Xinglong & Chen, Zhang-HangJian & Feng, Yujia & Gao, Xiang & Koedijk, Kees G., 2024. "Corporate SDG performance and investor trading behavior," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324006895
    DOI: 10.1016/j.frl.2024.105659
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    Cited by:

    1. Qing Wu & Theeralak Satjawathee, 2024. "The Real Value of CSR Performance in the NEV Industry: Evidence from China," IJFS, MDPI, vol. 12(4), pages 1-19, October.

    More about this item

    Keywords

    Sustainability; SDG performance; Trading behavior; Corporate reputation;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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