Impact of Sustainability Initiatives on Stock Value

Abstract

This study aims to investigate the impact of sustainability initiatives on stock value. This study uses environmental social governance initiatives as independent variable. Whereas, inflation, GDP and interest rate are used as control variables. However, stock value is used as the dependent variable. However, 8 countries (India, Japan, South Korea, Pakistan, Malaysia, Indonesia, China and Hongkong) are chosen to investigate the relationship between variables mentioned above. Historical data regarding these variables have been collected from the period of 2007 – 2019 (13 years) through secondary source of data (official website of Thomson Reuters). However, statistical tests (such as descriptive statistics, correlation and regression) have been used primarily to identify the relationship between variables of this study. Results were drawn through statistical tests with the help of Stata software. Based on the findings, correlation analysis has proved that environmental social governance initiatives and GDP are positively related with stock value with the magnitude of .4368 and .4139, respectively. Whereas, correlation analysis has proved that inflation and interest rate are negatively correlated with stock value with the magnitude of .4299 and .4313 respectively. In addition, regression analysis has proved a significant relationship between environmental social governance initiatives (independent variable), inflation, GDP, and interest rate (control variables) and stock value (dependent variable) in 8 countries.