Do green supply chain management initiatives impact stock prices of firms?

Although firms have been taking green supply chain management (GSCM) initiatives, it is not known whether they create value for firms. We analyze 104 announcements related to GSCM using an event study, and determine what causes statistically significant gain in stock prices for these firms. Manufacturing firms, firms with high R&D expenses, and early adopters show a strong increase in stock prices on the day of the announcement. At the same time, small firms, firms not well-known for taking green initiatives, as well as firms that are low in growth potential considerably surprise the market when they make such announcements.

► Announcements of green supply chain management (GSCM) impact a firm's stock price.
► Such announcements are significantly and positively heralded by investors.
► Impact is pronounced for manufacturing firms, early adopters, firms that stress R&D.