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Exploring environmental information in sell side analysts' research reports
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2008 (English)In: Progress in Industrial Ecology, An International Journal, ISSN 1476-8917, Vol. 5, no 2, 213-235 p.Article in journal (Refereed) Published
Abstract [en]

This study shows how environmental information is used by financial analysts when valuing companies. Unlike the previous studies on analysts' perceptions, we use content analysis to examine the actual use of environmental information in valuations. Research reports from large investment banks in the USA and Europe are collected. The sample consists of reports from two industries, oil and chemicals, where the operations have a considerable impact on the environment. The results show that analysts do use environmental information in 35% of the valuations. Most of the information utilised is for environmental expenditures and risk assessment. For instance, the information about environmental provisions and emissions is of relative importance. We also find that analysts use environmental information not only for the evaluations of risk, but also for the assessment of the future upside potential when valuing chemical companies. They make use of this information to motivate the relative valuations.

Place, publisher, year, edition, pages
2008. Vol. 5, no 2, 213-235 p.
Keyword [en]
environmental information, financial analysts, equity valuation, content analysis, investment banks, oil industry, chemical industry, environmental impact, environmental expenditure, risk assessment, industrial ecology.
URN: urn:nbn:se:umu:diva-10571DOI: doi:10.1504/PIE.2008.019126OAI: diva2:150242
Available from: 2008-10-01 Created: 2008-10-01 Last updated: 2011-01-10Bibliographically approved

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Nilsson, Henrik
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Umeå School of Business

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