What does it mean to be green? Ahead of this October’s fourth
annual corporate environmental scores, Thomas P. Lyon of the
University of Michigan and Jay P. Shimshack of Tulane University
investigate in “Environmental Disclosure: Evidence From
Newsweek’s Green Companies Rankings,” published on August 13,
2012 in Business & Society. The abstract: Corporate-level
environmental information disclosure is increasingly common.
This article studies the impact of a prominent media-generated
sustainability ratings program, Newsweek’s 2009 ranking of the
500 largest U.S. firms. Using an event study methodology, the
authors find the rankings had a significant impact on
shareholder value. Firms in the top 100 experienced abnormal
returns after the information release that were 0.6%–1.0% higher
than returns of firms in the bottom 400. The form of the
information released had significant effects as well. Nuanced
environmental score variables had no independent impact on
market outcomes; only the final ranking mattered. Thi