Research on impact of listed companies sustainable development on company’s value

Abstract

Sustainable development is not only hardly measurable phenomenon, but it is also quite a challenge to determine its impact on the company’s activities and the results. The scientific literature presents lot of areas reflecting sustainable development, but there is no definite opinion how to quantify the impact of sustainable development for listed companies’ value. Proper assessment of sustainable development is particularly important in order to represent the company and to attract new investors. The purpose of this paper is to evaluate what kind of impact sustainable development has on the value of listed companies. According to the results of scientific literature, two hypotheses were proposed: (H1) Sustainable development of listed company has an impact on the company’s weighted average capital costs, and it has a reflection in company’s value. (H2) The results of sustainable development activities are seen in indices of company's value assessment. The hypotheses were verified by evaluating companies which are listed in NASDAQ OMX BALTIC stock exchange and participate in UN Global Compact. The research shows different results for both hypotheses, H1 could be approved and only two of the three companies of H2 results confirmed the hypothesis.