University of Bath

About: University of Bath is a education organization based out in Bath, Bath and North East Somerset, United Kingdom. It is known for research contribution in the topics: Population & Photonic-crystal fiber. The organization has 15830 authors who have published 39608 publications receiving 1358769 citations. The organization is also known as: Bath University.

Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate Measures

Abstract: This study examines the relationship between corporate social performance and stock returns in the UK. Using a set of disaggregated social performance indicators for environment, employment and community activities, we are able to more closely evaluate the interactions between social and financial performance than would be the case for an aggregate measure. While scores on a composite social performance indicator are significantly negatively related to stock returns, we find that the poor financial reward offered by such firms is attributable to their good social performance on the employment and to a lesser extent the environmental aspects. Interestingly, we find that considerable abnormal returns are available from holding a portfolio of the socially least desirable stocks. These relationships between social and financial performance cannot be rationalised by multi-factor models for explaining the cross-sectional variation in returns or by industry effects.