Fernando, Sharfman, and Uysal (2017)
Fernando, Chitru, Mark Sharfman, and Vahap Uysal. "Corporate Environmental Policy and Shareholder Value: Following the Smart Money." Journal of Financial and Quantitative Analysis, October 2017.
From the authors' abstrct: "We find a sharp asymmetry between corporate policies that mitigate the firm’s exposure to environmental risk and those that enhance its perceived environmental friendliness (“greenness”). Institutional investors shun stocks with high environmental risk exposure, which we show have lower valuations, as predicted by risk management theory. These findings suggest that corporate environmental policies that mitigate environmental risk exposure create shareholder value."