The Impact of CSR on Investors’ Behaviour

Abstract: There has been an increased attention to sustainability in the society which has affected bothconsumers’ and investors’ behaviour. Consequently, companies are pressured to include CSR intheir businesses. Further, the media is quick to report when companies are acting sociallyirresponsible. For this reason it is of interest to investigate whether these news reports affectinvestors. One way to examine this is to study the stock price during such events. In addition, ithas been shown that women tend to value sustainability higher than men when consuming goodsand services. Hence, it is relevant to study if this trend is shown in their investment attitudes aswell. The method in this study consists of an event study which has been used to investigate theimpact of CSR events on stock prices of Swedish listed companies. In addition, a survey wasconducted to examine the attitudes towards CSR among Swedish private investors.The average two-day CAR for negative events was -0.18 percent, which suggests an existingeffect of negative CSR events on stock prices of listed Swedish companies belonging to OMX30.The findings in the survey showed that there is a great interest in CSR among Swedish investors.Further, a larger proportion include CSR in their investment decision compared to those who donot. Our findings showed that there exist differences in attitudes towards CSR within differentcategories of investors such as gender, age and trading habits. A larger proportion of femalerespondents have a greater interest in CSR and include CSR aspects in their investmentdecisions compared to males. A greater amount of female participants believe that a company'sCSR performance is at least as important as its financial one compared to males. Further, asignificant smaller proportion of investors between 18-24 years include CSR aspects when theymake investment decisions compared to those between 55-64 years. Our results suggest that themain underlying reason for respondents to include CSR was risk mitigation for the ones who trademore often and moral concerns for those who trade less often. Lastly, a larger proportion of thosewho trade less frequently believe that a company's CSR performance is at least as important asits financial one, compared to those who trade more frequently.