The literature indicates that firms with strong environmental, social, and governance (ESG) policies often have lower downside risk and enhanced resilience amid turbulence. This research note examines the association of one of hospitality firms’ ESG engagements, namely social ones, with companies’ reactions to the invasion of Ukraine by Russian troops and how stock markets reacted to such actions. Using a sample of 70 hotel and restaurant firms and classifying their anti-war actions based on their intensity, the results indicate that hospitality firms’ social engagement levels were not associated with their propensity to react. However, the effect of a firm’s anti-war actions on 2-month buy-and-hold abnormal returns following the invasion improved as the firm’s social engagement increased, indicating the markets’ positive evaluation of such firms regarding their anti-war actions.
Poretti et al. (Wed,) studied this question.