The US bond market seems to value firms’ CSR performance, say Wenxia Ge and Mingzhi Liu of the University of Manitoba. A 1-point increase in a company’s score on the researchers’ open-ended CSR-performance metric is associated with a decrease of 3.20 basis points in the risk premium that firms must pay for bond financing. The effect can save a company with high-performing CSR $1.66m per bond issue in interest costs, according to an analysis of more than 4,000 new public-bond issues.

(Source: Journal of Accounting and Public Policy)

Published in Dawn, Economic & Business, August 31st, 2015

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