Corporate social performance and stock returns: UK evidence from disaggregate measures

Stephen Brammer*, Chris Brooks, Stephen Pavelin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

427 Citations (Scopus)


This study examines the relation between corporate social performance and stock returns in the UK. We closely evaluate the interactions between social and financial performance with a set of disaggregated social performance indicators for environment, employment, and community activities instead of using an aggregate measure. While scores on a composite social performance indicator are negatively related to stock returns, we find the poor financial reward offered by such firms is attributable to their good social performance on the environment and, to a lesser extent, the community aspects. Considerable abnormal returns are available from holding a portfolio of the socially least desirable stocks. These relationships between social and financial performance can be rationalized by multi-factor models for explaining the cross-sectional variation in returns, but not by industry effects.

Original languageEnglish
Pages (from-to)97-116
Number of pages20
JournalFinancial Management
Issue number3
Publication statusPublished - 2006
Externally publishedYes


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