Going Green: Market Reaction to CSR Newswire Releases

Voluntary disclosure theory predicts that an optimal disclosure decision should produce an overall net benefit for shareholders, and that such net benefit should decrease in public information availability.This study by Professor Paul Griffin and co-author Yuan Sun from the UC Berkeley Haas School of Business supports the predictions of disclosure theory in the context of climate change.

Using voluntary disclosures made through the CSR newswire service, the authors find that managers’ disclosure decisions involving greenhouse gas emissions produce positive returns to shareholders. This response varies negatively with company size and public information availability.