Norwegian Pension Fund’s Portfolio: What Happens to the Companies Divested for Environmental Concerns?

We investigate how international investors evaluate the behaviour of those companies that have been excluded from the portfolio of the Norwegian Government Pension Fund-Global (GPF-G) due to environmental concerns. We concentrate on the excluded companies, to check if they are punished by SR concerned investors for their unethical environmental production and suffer from reputational damage. In particular, we focus on the 37 companies that have been excluded on the 14 of April 2016 that are listed on nine international stock markets. Building on the methodology generally used in these cases, we run an event study analysis to assess the stock price reaction to the public announcement of exclusion and to detect if an abnormal price reaction around the event exists.