DOING GOOD AND DOING WELL: THE RELATIONSHIPS BETWEEN ESG AND STOCK RETURNS OF REITS

Abstract

Environment, Social, and Governance (ESG) has increasingly been entrenched into the DNA of many corporations, and also ESG research has attracted strong attention in the academic literature. However, understanding the motivations behind ESG disclosure, the strategies of firms, and how institutional investors could pressure firms to embrace ESG policies remains a puzzle in the literature. The empirical evidence in the REIT literature is even more limited. This study uses a panel of REITs listed in both the US and the developed countries stock markets covering the period from 2008 to 2022 to empirically test the relationships between ESG scores of these REITs and their corporate performance.