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Do responsible real estate companies outperform their peers?

Cajias, M., Fuerst, F., McAllister, P. and Nanda, A., (2011) Do responsible real estate companies outperform their peers? Working Papers in Real Estate & Planning. 15/11. Working Paper. University of Reading, Reading. pp31.

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This paper investigates the relationship between corporate social and environmental performance and financial performance for a sample of publicly traded US real estate companies. Using the MSCI ESG (formerly KLD) database on seven Environmental, Social & Governance dimensions in the 2003-2010 period, and weighting the dimensions according to prominence in the real estate sector, we model Tobin's Q and annual total return in a panel data framework. The results indicate a positive relationship between ESG rating and Tobin's Q but this effect is driven by ESG concerns rather than strengths. Consistently across all model specifications, overall ESG ratings are associated with lower returns. Negative scores appear to result in higher returns in the short run but positive scores have no significant impact on returns.

Item Type:Report (Working Paper)
Divisions:Henley Business School > Real Estate and Planning
ID Code:26955
Uncontrolled Keywords:Environmental Social Governance, Corporate Social Responsibility, Corporate Financial Performance, Real Estate, Panel Data
Publisher:University of Reading
Publisher Statement:The copyright of each working paper remains with the author. If you wish to quote from or cite any paper please contact the appropriate author; in some cases a more recent version of the paper may have been published elsewhere.


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