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Stock price reactions to the climate activism by Fridays for Future: The roles of public attention and environmental performance.
- Source :
-
Journal of environmental management [J Environ Manage] 2023 Oct 15; Vol. 344, pp. 118608. Date of Electronic Publication: 2023 Jul 18. - Publication Year :
- 2023
-
Abstract
- This research investigates how the European and U.S. stock markets reacted to the upheaval caused by Fridays for Future. We perform an event study on stocks listed in the Stoxx Europe 600 and S&P 500 to examine their price reactions to the Global Climate Strikes 1-11. We analyze the significance of abnormal stock returns utilizing three event windows covering anticipation, short-term, and lagged effects. We also divide the sample by environmental performance grades. Our findings reveal that climate activism significantly affected stock valuation for all 11 Global Climate Strikes. Superior environmental performance is comparatively beneficial for firm values when climate activism receives a high level of public attention. We identify differences in the market reactions between Europe and the U.S. Also, we enrich the literature on stock market reactions by demonstrating that investors react, not only to primary stakeholder events (i.e., enactment of regulations by governments) but also to secondary stakeholder pressure (i.e., NGO activism). Furthermore, we provide evidence that climate activism has a processual character that causes recurring effects on the stock market. Our study encourages policymakers to increase environmental pressure as a mechanism for guiding green transformation.<br />Competing Interests: Declaration of competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.<br /> (Copyright © 2023. Published by Elsevier Ltd.)
- Subjects :
- Europe
Climate
Government
Investments
Attention
Subjects
Details
- Language :
- English
- ISSN :
- 1095-8630
- Volume :
- 344
- Database :
- MEDLINE
- Journal :
- Journal of environmental management
- Publication Type :
- Academic Journal
- Accession number :
- 37473554
- Full Text :
- https://doi.org/10.1016/j.jenvman.2023.118608