Executive Summary:
Security analysts are increasingly awarding more favorable ratings to firms with corporate socially responsible (CSR) strategies, according to this paper by Ioannis Ioannou and HBS professor George Serafeim. Their work explores how CSR strategies can affect value creation in public equity markets through analyst recommendations. Key concepts include:
Top executives and managers interested in implementing CSR strategies in their organizations know that negative analysts' reactions, and subsequent value destruction in capital markets is a real possibility when they initially attempt to implement such strategies.
Managers should be aware that not only what is communicated matters but also to whom it is communicated in the investment community. Research analysts differ in their ability to understand the implications of CSR.
See full Article.
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