Sustainability Management and Market Risk
| Autor | María del Carmen Valls Martínez, Pedro Antonio Martín Cervantes, Rafael Soriano Román, Antonio Díaz Restoy |
| Páginas | 29-33 |
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SUSTAINABILITY MANAGEMENT AND MARKET RISK
María del Carmen Valls Martínez
University of Almería, Spain
!
Pedro Antonio Martín Cervantes
University of Almería, Spain
!
Rafael Soriano Román
University of Almería, Spain
!
Antonio Díaz Restoy
University of Almería, Spain
DOI: 10.14679/1233
1.!INTRODUCCIÓN
Sustainability is a concern in companies in the last decades. Economic development implies negative
consequences for the environment and causes social changes that are not always desirable. In this sense, and
because of the scandals produced by large corporations regarding polluting activities, the exploitation of
workers, etc., a code of ethical conduct was imposed to oblige those companies that want to stay in the mar-
ket to apply corporate social respons ibility (CSR) policies. Companies have to be accountable for their ac-
tions. In this sense, the United Nations established the Agenda 2030, a set of sustainable development goals
to care for the planet and people, including fighting against poverty, clean water and energy, decent work,
gender equality, etc. All of this implies cost to companies. However, do the benefit they get in return com-
pensates for such efforts?
CSR has been widely studied in the literature. An extensive array of research has focused on measuring
its three components: environmental, social and governance (ESG), to determine the final ESG score. Anoth-
er line of work has established, in general, a positive relationship between financial performance, which is
measure as accounting profitability or market valuation, and CSR. There are even comprehensive previous
theoretical and empirical analyses about the composition of board of directors and CSR’s extent, focusing on
gender diversity (Valls Martínez et al., 2019). However, so far, little attention has been paid to the relation-
ship between sustainability and market risk.
Today, portfolio managers and individual invest ors consider ESG-score as a critical variable in financial
asset selection. Every rational investment decision must consider two basic parameters: profitability and
risk. Currently, the concept of profitability includes not only financial performance but also social and envi-
ronmental performance, and even psychic performance (feel good about their own decisions). The risk is the
possibility of not obtaining the expected returns. Therefore, are sustainable companies more or less risky
than those that do not apply sustainability measures?
There is little empirical research on this issue, but most find that those market indices that comprise sus-
tainable businesses are more stable over time. Similarly, those companies with better ESG-scores have a less
volatile share price.
2.!RELATIONSHIP BETWEEN SUSTAINABILITY MANAGEMENT AND MARKET RISK IN RE-
SEARCH. A BIBLIOMETRIC ANALYSIS.
Bibliometric analysis has been carried out on the research papers published up to the end of 2020 to an-
alyze the relat ionship between sustainability and market risk concepts. For this purpose, a search was done
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