| Abstract: | During the past several years, an increasing body of evidence and opinion has formed concerning the relationships between advancements in environmental, health, and safety (EH&S) management and the financial performance of the organization. In recent work,1 we have described a new theoretical model linking improvements in environmental management systems and environmental performance to corporate risk, stock volatility, and market value, as well as an empirical evaluation that validated our model. A number of other studies2 have documented changes in the market value of corporate equity as a function of environmental accidents, incidents, and (conversely) accomplishments. These are in addition to the numerous examples presented in the literature and at EH&S conferences and symposia that suggest that concerted efforts to reduce the organization's environmental “footprint” can yield cost savings, increased market share, reduced time to market, and perhaps other financial benefits. Some have gone so far as to proclaim that a new era has begun, in which environment-friendly corporations will increasingly be recognized and rewarded by financial market participants, and organizations that lag behind will be severely penalized.3 This article documents a new survey undertaken to identify important environmental factors, if any, investors employ in evaluating the quality and worth of equity and debt financing instruments. |
