Glen Dowell, Stuart Hart and Bernard Yeung were given the prize for their paper entitled “Do Corporate Global Environmental Standards Create or Destroy Market Value?” at the recent SRI in the Rockies Conference held in Tucson, Arizona. Their paper deals with the empirical relationship between business success and the adoption of strong environmental standards by multinational corporations. It argues that successful companies have strong environmental policies, and that lax environmental regulations do not facilitate a healthy business climate over the long term.
The authors are backed by strong academic credentials. Glen Dowell is a Doctorate Candidate at the University of Michigan Business School, and Stuart Hart is Professor of Strategic Management and Director of the Sustainable Enterprise Initiative at the Kenan-Flagler Business School at the University of North Carolina. Bernard Yeung is the Abraham Krasnoff Professor of Global Business at New York University’s Stern School of Business, and Area Research Director of the University of Michigan Business School’s William Davidson Institute.
“The evidence from our analysis indicates that positive market valuation is associated with the adoption of a single stringent environmental standard around the world,” write the authors. They are conservative, however, regarding arguments about causality in the relationship.
“Their paper was chosen for this prize because it has the potential to meaningfully impact corporate business behavior and the regulatory schemes put into place by governments,” said Daniel diBartolomeo, one of the judges for the prize. Mr. diBartolomeo is founder and president of Northfield Information Services, Inc., a firm that helps investment professionals avail themselves to the latest financial research. The other judges were Pietra Rivoli, Associate Professor of Finance at Georgetown University, and Brian Bruce, Editor of the Journal of Investing and Director of Global Investments at Panagora Asset Management.
In a first for the Moskowitz Prize, the judges also named an Honorable Mention. Bernell Stone, John Guerard Jr., Mustafa Gultekin and Greg Adams were distinguished for their paper entitled “Socially Responsible Investment Screening: Strong Evidence of No Significant Cost for Actively Managed Portfolios.” It is to be published in an upcoming issue of The Journal of Investing.
The Stone, Guerard, Gultekin and Adams paper confirms that socially responsible investing constraints on U.S. equity investment portfolios do not handicap performance meaningfully. This result has been found in several previous studies, but according to Mr. diBartolomeo, “the Stone, et al methodology is the most sophisticated ever applied to this issue.”
The Moskowitz Prize was created in 1996 by the Social Investment Forum, a U.S. association of social investment professionals. It is named for Milton Moskowitz, senior editor of Business and Society Review and co-author of “The 100 Best Companies to Work for in America.” The Moskowitz Prize is given annually and carries $2,500 cash award as well as publication of the winning paper in The Journal of Investing.