Key points are not available for this paper at this time.
Ratings of corporations' environmental activities and capabilities influence billions of dollars of “socially responsible” investments as well as some consumers, activists, and potential employees. In one of the first studies to assess these ratings, we examine how well the most widely used ratings—those of Kinder, Lydenberg, Domini Research & Analytics (KLD)—provide transparency about past and likely future environmental performance. We find KLD “concern” ratings to be fairly good summaries of past environmental performance. In addition, firms with more KLD concerns have slightly, but statistically significantly, more pollution and regulatory compliance violations in later years. KLD environmental strengths, in contrast, do not accurately predict pollution levels or compliance violations. Moreover, we find evidence that KLD's ratings are not optimally using publicly available data. We discuss the implications of our findings for advocates and skeptics of corporate social responsibility as well as for studies that relate social responsibility ratings to financial performance.
Building similarity graph...
Analyzing shared references across papers
Loading...
Aaron Chatterji
David I. Levine
Michael W. Toffel
Journal of Economics & Management Strategy
Harvard University
University of California, Berkeley
Duke University
Building similarity graph...
Analyzing shared references across papers
Loading...
Chatterji et al. (Mon,) studied this question.
www.synapsesocial.com/papers/69da18e10f778bd2e4684064 — DOI: https://doi.org/10.1111/j.1530-9134.2009.00210.x