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October 04, 2001
Research Paper on Corporate Global Environmental Standards Wins Moskowitz Prize
by Mark Thomsen
For the first time, judges also give Honorable Mention to a paper that provides compelling evidence
of no significant cost for actively managed screened portfolios.
SocialFunds.com --
Multinationals employing the lowest environmental standards possible in their overseas operations
would be considered a bad investment by social investors. Those investors would be right on the
money, say the winners of this year's Moskowitz Prize, the social investment industry's prestigious
award for outstanding research in the field of socially responsible investing.
 Glen Dowell, Stuart Hart and Bernard Yeung
were given the prize for their paper entitled "Do Corporate Global Environmental Standards Create
or Destroy Market Value?" at the recent SRI in the Rockies Conference held in Tucson, Arizona.
Their paper deals with the empirical relationship between business success and the adoption of
strong environmental standards by multinational corporations. It argues that successful companies
have strong environmental policies, and that lax environmental regulations do not facilitate a
healthy business climate over the long term.
The authors are backed by strong academic
credentials. Glen Dowell is a Doctorate Candidate at the University of Michigan Business School,
and Stuart Hart is Professor of Strategic Management and Director of the Sustainable Enterprise
Initiative at the Kenan-Flagler Business School at the University of North Carolina. Bernard Yeung
is the Abraham Krasnoff Professor of Global Business at New York University's Stern School of
Business, and Area Research Director of the University of Michigan Business School's William
Davidson Institute.
"The evidence from our analysis indicates that positive market
valuation is associated with the adoption of a single stringent environmental standard around the
world," write the authors. They are conservative, however, regarding arguments about causality in
the relationship.
"Their paper was chosen for this prize because it has the potential to
meaningfully impact corporate business behavior and the regulatory schemes put into place by
governments," said Daniel diBartolomeo, one of the judges for the prize. Mr. diBartolomeo is
founder and president of Northfield Information Services, Inc., a firm that helps investment
professionals avail themselves to the latest financial research. The other judges were Pietra
Rivoli, Associate Professor of Finance at Georgetown University, and Brian Bruce, Editor of the
Journal of Investing and Director of Global Investments at Panagora Asset Management.
In a
first for the Moskowitz Prize, the judges also named an Honorable Mention. Bernell Stone, John
Guerard Jr., Mustafa Gultekin and Greg Adams were distinguished for their paper entitled "Socially
Responsible Investment Screening: Strong Evidence of No Significant Cost for Actively Managed
Portfolios." It is to be published in an upcoming issue of The Journal of Investing.
The Stone, Guerard, Gultekin and Adams paper confirms that socially responsible investing
constraints on U.S. equity investment portfolios do not handicap performance meaningfully. This
result has been found in several previous studies, but according to Mr. diBartolomeo, "the Stone,
et al methodology is the most sophisticated ever applied to this issue."
The Moskowitz
Prize was created in 1996 by the Social Investment Forum, a U.S. association of social investment
professionals. It is named for Milton Moskowitz, senior editor of Business and Society Review and
co-author of "The 100 Best Companies to Work for in America." The Moskowitz Prize is given
annually and carries $2,500 cash award as well as publication of the winning paper in The
Journal of Investing.
©
SRI World Group, Inc. All Rights Reserved.
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