Does Sustainability Pay Off for European Listed Real Estate Companies? The Dynamics Between Risk and Provision of Responsible Information

Posted: 8 Jan 2011

See all articles by Marcelo Cajias

Marcelo Cajias

PATRIZIA AG; Universit├Ąt Regensburg

Sven Bienert

University of Regensburg - International Real Estate Business School (IREBS)

Date Written: January 6, 2011

Abstract

The last decade has revealed an increasing interest in sustainable activities among companies and their attempts to combine economic, social and environmental aspects within their business strategy. In order to investigate firm-specific sustainability strategies we focus on the quality of information provided by European listed real estate companies in 13 different countries. Our study captures the individual disclosure level and intensity of information on activities regarding sustainability as a proxy for responsible information provision to both investors and capital markets. Our first research question concludes that human resources and price volatility play a significant role in the company's strength with respect to CSR-activities. While business complexity and financial transparency enhance the provision of sustainable information to capital markets, business experience does not appear to be a key factor in the decision to go CSR. Our second approach reveals that the benefits of ex ante responsible activities are reflected in lower levels of idiosyncratic risk, but only for firms that provide high levels of quantitative information, that is, clear signals to external investors and markets. Our econometric methodology includes latent ordered probit and panel regressions and provides evidence that CSR-activities vary for real estate companies across Europe. We contribute to the real estate literature, by examining both the quality and quantity of sustainability information provided and its economic impact.

Keywords: CSR, Sustainable Real Estate, Sustainability, Transparency, Disclosure Quality, Information Risk, Idiosyncratic Risk, EPRA, GRI and Latent Ordered Probit Regression

Suggested Citation

Cajias, Marcelo and Bienert, Sven, Does Sustainability Pay Off for European Listed Real Estate Companies? The Dynamics Between Risk and Provision of Responsible Information (January 6, 2011). Available at SSRN: https://ssrn.com/abstract=1736104 or http://dx.doi.org/10.2139/ssrn.1736104

Marcelo Cajias (Contact Author)

PATRIZIA AG ( email )

Fuggerstr. 26
Augsburg, 86150
Germany
+49 (0) 151 17215198 (Phone)

HOME PAGE: http://www.patrizia.ag

Universit├Ąt Regensburg ( email )

93040 Regensburg
D-93040 Regensburg, 93053
Germany

Sven Bienert

University of Regensburg - International Real Estate Business School (IREBS) ( email )

Universitaetsstrasse 31
Regenburg, Bavaria 93040
Germany

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