Value, Values, and Opportunities in Corporate Environmental Practices
Working Paper Author/Authors
Key Finding
Sell-side analysts in China see environmental issues mainly as financially valuable opportunities, not just risks, with regulatory pressure driving corporate improvement more than investors or employees
Abstract
We study sell-side analysts’ perceptions of corporate environmental practices using survey responses from 505 analysts and 273,664 reports. Analysts devote substantial attention to environmental issues, far more than AI or cybersecurity, and overwhelmingly emphasize financial over non-financial considerations. Analysts view environmental factors not just as risks but more as opportunities. Their environmental perceptions shape both earnings forecasts and stock recommendations. Regulation and media are seen as key drivers of corporate environmental improvement, while institutions and employees matter less. Overall, the consistent survey and textual evidence underscore value-driven analysis, financial materiality of environmental factors, and offer guidance for sustainability policy interventions.
