In this paper we investigate the relationship between Corporate Social Responsibility performance (CSP) and firms' financial standingcorporate financial performance (CFP) in ten Global Industry Classification System (GICS) sectors. The analysis of each sector provides unique opportunity of finding these CSR actions which nowadays play the most important role. We use Thomson Reuters ASSET4 ratings in order to proxy the CSR behaviour of 2428 companies from all over the world in the period of 2009-2012. We find CSR actions' effects measured by value increase as well as transitory effect on earnings conditional upon the company's sector. Firstly, we prove that eco-efficiency investments are value destructors in 8 out 10 sectors. For corporate governance we find significant results only in three sectors with ambiguous characteristic. Despite of adding the third, social dimension we observe relatively lesser impact of CSR actions on firms' financial performance in case of four sectors.

Purpose This study aims to verify whether non-financial disclosure in the construction industry (CI) responds to stakeholders’ information needs and explores the most frequent topics disclosed in terms of the environmental, social and governance (ESG) pillars. Design/methodology/approach This study uses a bag-of-words method and latent Dirichlet allocation to match stakeholders’ expectations with information disclosed by companies. This paper assesses the publicly available non-financial disclosure of the 46 European CI companies covered by the Refinitiv database with ESG scores. Findings This study provides two main findings. First, it shows the mismatch between stakeholders’ information needs and what they get in non-financial reporting. Despite non-financial information in CI disclosure, the information disclosed by many CI companies does not meet their users’ information needs. CI companies commonly focus on their sustainable products and health policy while omitting other topics of interest – the circular economy, unethical business behaviour, migrant policy and human trafficking. Second, this study indicates the defects of simple disclosure analysis based on keywords and highlights the importance of context in information analysis. Practical implications The proposed novel approach to text analysis offers several practical applications. It is a more effective tool for evaluating companies’ sustainability performance. It may be especially important to ESG rating providers. Additionally, the results may be of interest to companies wishing to improve their communication, and, in particular, to regulators and standard setters in two matters. The first is the need for more pressure to increase awareness among issuers to shift from disclosing large amounts of non-financial information to disclosing good quality non-financial information, which would be appropriate for meeting stakeholders’ expectations. The second is the necessity for deepening issuers’ understanding of the diverse stakeholders’ information needs, considering the substantial differences among industries and improving communication to meet them. Originality/value This study introduces text analysis that, apart from keywords, considers the context of these keywords’ appearances in a report’s narration. It allows a significantly improved understanding of the information disclosed and a more stable grounding for reasoning, leading to better and informed decisions. Moreover, this study verifies how the information disclosed matches stakeholders’ needs. Finally, it enriches the literature on sectoral analysis concerning non-financial disclosure.

Investor sentiment, optimism and excess stock market returns | We test the existence of a contemporaneous relationship between sentiment/optimism indexes and returns at the aggregate market level in eight emerging markets, namely: Brazil, China, India, Mexico, Poland, Republic of South Africa, Russia and Turkey. We use sentiment and optimism Thomson Reuters MarketPsych Indexes that are based on scanning media coverage for relevant text reflecting particular moods and opinions. We find that there is a positive relationship between investor sentiment index / investor optimism index and the excess stock market returns in Brazil and China, respectively. We also notice that excess returns are more sensitive to changes in investors moods during periods of negative sentiment/optimism index values in four out of eight researched markets, namely: Brazil, China, India and Mexico. Additionally, this relationship we find positive. JEL Classifications: G02, G14, G15

Environmental, social and governance (ESG) factors have become an important topic on capital markets amid an increasing interest in responsible investing. Despite this fact, public companies have been involved in a number of ESG misconducts in recent years, which were often against the interests of their stakeholders. In our research, we refer to stakeholder theory in order to show how disclosures of social misconducts against the companies’ stakeholders have affected market valuation of listed companies, which we treat as one of the measures of shareholders’ wealth. We conduct an event study on 235 ESG misconducts related to DAX companies. The data sample of ESG news was hand collected in a thorough content analysis in the period of 2000-2019. The main findings reveal that investors’ reactions were more severe for ESG news released after 2009 than before this date as illustrated by negative and significant cumulative average abnormal returns (CAARs) in different event windows, while before 2009 CAARs were insignificant. We also found out that investors reacted stronger to governance- rather than social or environmental news. Our results provide a guidance for listed companies on how ESG mismanagements might affect their market value, and for investors who intend to incorporate ESG factors in their investment decision processes.

The aim of the paper is to reveal how corporate social performance (CSP) affects market value and earnings capabilities of companies from banking industry: Banking Services and Investment Banking & Investment Services sub-industries in particular. For Banking Services, the research was extended to a link between corporate social performance and corporate financial performance (CSP-CFP) by classifying institutions into clusters based on a type of culture which dominates in a bank’s country of origin. Regression analysis was run on a unique dataset, which comprehensively captures the contextuality of CSP, measured with corporate governance, environmental and social characteristics. This research uses Refinitiv database of ESG Scores as CSP proxy for banks from all over the world in the period of 2009–2016. The results confirm that environmental performance and social performance have negative impact on CFP in banks and partly confirmed that governance performance has a positive impact on their CFP. This research proves that banks’ CSP performance and the CSP-CFP relationship differs with regard to the type of bank operations as well as the associated culture. This is an important conclusion for investors seeking to increase value of their holdings and bank management who wants to foster bank’s profitability through CSP-related decisions.