Is the Philosopher's Stone Green? An Event Study on Market Reactions to Green Initiatives in Listed Companies

Abstract

This thesis aims to investigate whether shifts in ESG can be driven by nancial incentives rather than sustainability itself by employing an event study methodology. We rst analyse abnormal trading volumes and nd that the shifts carry a signi cant weight. Next, we investigate if the shifts carry any price impact by analysing abnormal returns. We nd that only the more material shifts carry a price impact from the abnormal return analysis. Lastly, we nd that companies are improving their sustainable performance by analysing the development in ESG ratings and pillar scores following the shifts. We conclude that shifts in ESG are not driven by the hypothesised nancial incentives, and that companies are improving their sustainable performance after the announced shift.