Stock Price Reaction to Being Named an International Sustainability Leader

Document Type

Peer-Reviewed Article

Publication Date



This study examines the link between being named a leader in sustainability and stock market performance and whether that link differs between US and non-US firms. Specifically, we examine abnormal returns following the announcement of the addition of companies to the widely recognized list of “Global 100 Most Sustainable Corporations in the World” indicating global leadership in sustainability. We find that there is no significant short-term reaction to this announcement of being added to the Global 100 list for either US or non-US firms. However, we find that non-US firms have a 5.6 percent cumulative abnormal return during a three-month window following the announcement, compared to statistically insignificant returns on US stocks during the same window. We interpret this result as evidence of investors of non-US firms placing greater value on being named a leader in sustainability due to different reporting requirements as well as differing cultural attitudes towards the role of the firm with respect to corporate social responsibility.