Greening of Corporate Governance: Wealth Effects of Sustainability Officer Hiring

Abstract

This study reports on the impact that firms’ hiring of sustainability officers has on their shareholders’ wealth. Our stock market tests show a significantly positive effect on the wealth of shareholders of firms around the time of sustainability officer hiring announcements. It appears that hiring these officers by publicly traded firms is a signal to the market that the firm is serious about its sustainability plans and actions. These results also suggest that shareholders view a firm’s commitment to sustainability as a sound strategic choice that will accrue financial benefits for the long term.