This research analyses market response to the announcement on Environmental, Social, Governance and Sustainability initiatives undertaken by 17 listed companies in Hong Kong from 2010 to 2012. Prior studies have examined market reaction to different kinds of initiatives within environmental and social aspects. This study further explores whether investors react differently to environmental, social, governance and sustainability initiatives. There is weak evidence supporting that the market responds positively to these initiatives. However, we found that the investors were selective in reacting to different kinds of initiatives. Compared with environmental, social and governance (ESG) initiatives, the market reacted less positively to corporate sustainability initiatives, such a...[ Read more ]

This research analyses market response to the announcement on Environmental, Social, Governance and Sustainability initiatives undertaken by 17 listed companies in Hong Kong from 2010 to 2012. Prior studies have examined market reaction to different kinds of initiatives within environmental and social aspects. This study further explores whether investors react differently to environmental, social, governance and sustainability initiatives. There is weak evidence supporting that the market responds positively to these initiatives. However, we found that the investors were selective in reacting to different kinds of initiatives. Compared with environmental, social and governance (ESG) initiatives, the market reacted less positively to corporate sustainability initiatives, such as the announcement of inclusion in sustainability indices.