An analysis of the stock market impact of environmental performance information

N. H. J. Lorraine, D. J. Collison, D. M. Power

    Research output: Contribution to journalArticlepeer-review

    105 Citations (Scopus)


    This paper examines whether publicity (either good or bad) about environmental performance affects companies’ share prices. To date, a lot of the research in this area has been conducted in a US setting and has arrived at inconclusive results. This investigation examines the topic in a UK context. Specifically, it looks at publicity about fines for environmental pollution as well as commendations about good environmental achievements to see whether such information influences share prices. The results indicate that there is a stock market response to such news especially for details on fines—typically up to 1 week after news is published. A cross-sectional analysis indicates that the share price response is mainly a function of the relative fine imposed on the firm; other explanatory variables such as environmental performance news or sector membership were unsuccessful in explaining variations in the market responses.
    Original languageEnglish
    Pages (from-to)7-26
    Number of pages20
    JournalAccounting Forum
    Issue number1
    Publication statusPublished - Mar 2004


    • Stock markets
    • Share prices
    • Environment Agency


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