Environment, Development and Sustainability

, Volume 12, Issue 5, pp 825–837 | Cite as

The persistence of green goodwill

  • Sunderasan SrinivasanEmail author
  • Raj Kumar Singh


Civil coercion has its limitations, government regulation is only as effective as enforcement and investors base their estimates of firm value on information available from the firms themselves and from other sources. While voluntary disclosure is construed as being selective or incomplete, negative non-financial news such as details of fines imposed for environmental violation is reflected in lower stock prices for a short duration. This paper evaluates the persistence of goodwill capital for a sample of Indian companies from select industries, graded by their environmental performance. We conclude that investor concern differs across industries and that the correlation of environmental performance with firm valuation is, at best, weak and short-lived. Periodic scrutiny and announcement of industry environmental performance by appropriately equipped independent agencies could help coordinate and sustain stake-holder pressure on industry.


Emerging markets Green goodwill Implicit liabilities Civil regulation 



The views expressed in this article are of the authors themselves and do not necessarily reflect those of any organization.


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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  1. 1.Verdurous Solutions Private LimitedMysoreIndia
  2. 2.SDM—Institute for Management DevelopmentMysoreIndia

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