From green to gold - alchemy in the 21st century? : the effect of voluntary environmental initiatives, certifications, and awwards on short-term stock returns in Norway and Sweden
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- Master Thesis 
This thesis aims at identifying the relationship between a company’s environmental and economic performance. Using an event study methodology, we study 125 environmental press releases on voluntary initiatives, awards and certifications from 43 companies listed in Norway and Sweden. Through both a univariate and a cross-sectional analysis, we find that although there is no overall relationship between environmental and economic performance, there are in fact differences related to the strength of the environmental press release; stronger announcements, with a higher environmental commitment, are met with a more negative reaction by investors than weaker ones. This suggests that investors believe that the benefits related to strong environmental performance will be more than offset by the corresponding costs. Further research should therefore aim to expand the understanding of when environmental policies are profitable, and under what circumstances they are unprofitable. This will clarify for managers which environmental policies to initiate, and for lawmakers what regulation is needed to protect the environment in a satisfactory way.