Stock market response to unsustainable conduct within listed companies

Abstract

News spreads quickly in our rapidly innovative world, which has implications for companies when scandals are exposed to the public. In this report, we explore whether there is a connection between unethical actions and the reaction and publication of those acts in terms of environmental and social issues. More specifically, an event study is undertaken to determine if there is a stock market reaction to the public announcement of corporate environmental and social scandals. To see whether there is a correlation between the publication of the scandals and a shift in the share price, a t-test is used. In addition, the test is used to determine if there is a major reaction.When the news about the social scandals was released, the share price of the social scandals fell more than the environmental scandals, according to the report. These assumptions may be focused on the values and ethics of investors. A comparison may also be drawn from the fact that the average value of CAR has decreased over time, which can be explained by the increased focus on sustainability in general.