Do Investors Appreciate Information about Corporate Social Responsibility? Evidence from the Polish Equity Market.

Artykuł z zasobów e-mentora: University Social Responsibility Strategies. E-mentor - internetowe czasopismo poświęcone nastepującym zagadnienion:e-learning, czasopismo, sgh, szkoła główna handlowa, internetowe czasopismo, e-mentor, nauczanie przez internet, kształcenie ustawiczne, metody kształcenia, formy kształcenia.

Purpose: The article analyzes the consequences of transformation in governance structures of stock exchanges on their CSR initiatives, in particular relations between their organizational forms and the number and nature of CSR initiatives as well as their influence on stock exchanges’ performance. Methodology: In our study covering 40 European stock exchanges, we identified 527 sustainability practices implemented between 1992 and 2019. We divided these practices into two categories: internal, applying to the stock exchange itself, and external, targeted at listed companies. Moreover, we proposed a synthetic indicator of stock exchange development to measure its economic performance. Findings: We found that publicly traded stock exchanges undertake a greater number of CSR initiatives and have a higher proportion of internal practices, than stock exchanges organized as non-public entities. Our study also indicates that a large number of implemented CSR practices positively affects the economic performance of stock exchanges, and furthermore, that internal practices have a greater impact than external ones. Research limitations: The surveyed European stock exchanges may differ from stock exchanges in other regions regarding their CSR policies. Originality: Our study proved that the corporatization of stock exchanges affect their CSR practices. It also showed that some types of sustainability activities affect performance in a more significant way than others.

The growing importance of socially responsible investments is causing a rapid increase in the number of various ESG indices. This raises the question of whether the index design matters to stock market investors. The purpose of the article is therefore to analyze the impact of ESG index design on investor decisions motivated by announcements of index reconstitutions. It was assumed that information about company additions to, or deletions from, an index—signaling an improvement in or deterioration of its CSR standards—may be differently interpreted by investors depending on the context provided by the index design. This study used data on the reconstitutions of two ESG indices. One of them, FTSE4Good US, is based on negative screening. Due to its design, membership in it is strongly associated with legitimacy. The other index, DJSI North America, is a best-in-class index which confers a reputation effect. We have applied the event window methodology, which identifies the economic effects of an event by estimating its impact on share prices as reflected in the rate of return. Analysis encompassed 691 events concerning American listed companies in the years 2009–2019, of which 441 were additions and 250 were deletions. It was found that significant investor reactions were triggered only by reconstitutions of the index generating a reputation effect (DJSI). These results indicate that index design does matter. The reactions of investors were positive only when they associated a company’s social commitment with the creation of intangible resources contributing to its competitive advantage. Our results suggest that inclusion in a best-in-class index is more beneficial for a company than in an index based on negative screening.

Companies, by engaging in Corporate Social Responsibility (CSR) activities, can generate favorable stakeholder behaviors and build up their corporate reputations. On the other hand, stakeholders’ low awareness of these activities, and their lack of confidence in corporations, create major obstacles in gaining maximum benefits for these companies. This gives rise to a need for effective CSR communication. The purpose of the research presented in this paper was to identify how companies listed on the Warsaw Stock Exchange use their websites to communicate CSR activities. The research was based on the analysis of company documents. The main results show that company size was the most important factor differentiating CSR communication.