Corporate Sustainability: First Evidence on Materiality | Zendy

Mozaffar Khan | Zendy; George Serafeim | Zendy; Aaron Yoon | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Corporate Sustainability: First Evidence on Materiality

Author(s) -

Mozaffar Khan,

George Serafeim,

Aaron Yoon

Publication year - 2016

Publication title -

the accounting review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 5.678

H-Index - 156

eISSN - 1558-7967

pISSN - 0001-4826

DOI - 10.2308/accr-51383

Subject(s) - sustainability , materiality (auditing) , portfolio , sustainability reporting , business , stock (firearms) , sustainability organizations , accounting , enterprise value , return on assets , corporate sustainability , economics , finance , stock exchange , ecology , philosophy , biology , aesthetics , mechanical engineering , engineering

Using newly available materiality classifications of sustainability topics, we develop a novel dataset by hand-mapping sustainability investments classified as material for each industry into firm-specific sustainability ratings. This allows us to present new evidence on the value implications of sustainability investments. Using both calendar-time portfolio stock return regressions and firm-level panel regressions, we find that firms with good ratings on material sustainability issues significantly outperform firms with poor ratings on these issues. In contrast, firms with good ratings on immaterial sustainability issues do not significantly outperform firms with poor ratings on the same issues. These results are confirmed when we analyze future changes in accounting performance. The results have implications for asset managers who have committed to the integration of sustainability factors in their capital allocation decisions.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research