Engage-wl-3097-Are Green Volunteer Companies Glamorous?

What is it about?

How does the market treat companies that are more transparent, undertake sustainability reporting, and are corporate social responsibility (CSR) volunteers? Are their shares likely to be treated as glamour or value shares? We examine this in the context of the Indian stock market over the decade of 2009 to 2019 for BSE500 companies.

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Why is it important?

We find that companies that are both CSR and Global Reporting Initiatives (GRI) volunteers report the largest proportion of value shares—most closely aligned market values to book values. We expected that the non-volunteers would have the largest proportion of glamour shares, but we found that the group that volunteers for GRI but is not a CSR volunteer has the highest proportion of glamour shares. One possible explanation could be that the market perception of value is possibly driven by a company’s voluntary CSR status rather than the GRI reporting.