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New Research: Voluntary Disclosure Produces Positive Returns for Shareholders

Titled Going Green: Market Reactions to CSR Newswire Releases, the study was conducted by two University of California management professors Paul Griffin, Ph.D. and Yuan Sun, Ph.D.

Their motivation: "A lot of people were saying we need to engage in a climate change strategy but there was little or no evidence that this was improving shareholder value," says Dr. Griffin, adding, "We wanted to look at whether there was an association between voluntary disclosure and shareholder price."

Top Findings: It Pays To Be Green (with CSRwire)

By using CSRwire as a source for voluntary disclosures comparable over a decade, the study determines:

    1. Companies' market values increased following CSRwire release: Sample of
       disclosing companies received an aggregate market value boost following
       their CSRwire releases of approximately ten billion dollars, independent
       of differences in public information availability.
    2. Voluntary green disclosure produce positive returns to shareholders: As
       predicted, the study found that shareholders on average respond
       positively to a CSRwire release by 0.468 percent over the three-day
       window (of the posting).
    3. Small companies tend to benefit more: Shareholders of smaller companies
       with limited public information availability benefit the most from
       voluntary green disclosure [with prices increasing as much as 2.32
       percent].

"Making the connection between voluntary disclosure and increased shareholder value demonstrates investors appetite for increased transparency where everyone wins," says CSRwire CEO Joe Sibilia.

Methodology

172 GHG releases by 84 companies from a total of 18,588 releases on CSRwire between 2000 and 2010 containing the phrases "greenhouse gas emissions," "carbon emissions," or "CO2 emissions."

Criteria:

The study examined shareholders' response to a unique set of disclosures about climate change made by U.S. companies through CSRwire based on the following criteria:

    1. Companies' CSR releases meet the criteria of a voluntary disclosure since
       companies decide on the content, timing, and the dissemination (CSR in
       this case) of a disclosure.

    2. CSRwire is the global leader in disseminating news about corporate social
       responsibility and sustainability, currently with one-quarter of one
       million page views every month. This enabled the researchers to study a
       large sample of disclosures over several years for a wide range of
       industries made through a single channel.
    3. CSRwire conveys fresh information to users, a critical aspect of the
       University of California's research design. While the Carbon Disclosure
       Project (CDP) is another leading source of GHG data, "investors and
       others receive information on large companies' emissions at best nine to
       10 months after year end, by which time other channels, including
       CSRwire, may have preempted much of the news content of that
       information."

"We were looking for information that relates to companies making voluntary disclosures and CSRwire had the largest collection of disclosures. CSRwire's archival content also allowed us to work with a few years' worth of comparative data because we wanted to be able to cover more than two years for stock market analysis," says Dr. Griffin.

"I am not aware of any other source of data across industries and companies that we could have used as efficiently for our research," he adds.

To download the complete report, visit http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1995132

To speak to CSRwire CEO Joe Sibilia, email Editorial Director Aman Singh.

CONTACT: Aman Singh, +1-212-231-2824, aman@csrwire.com

SOURCE CSRwire