Sustainable business innovation boosts company value according to researchers from Aalto University in Finland have proved.
In the first study of its kind, the researchers tested how sustainability business innovations and the market value of companies in the construction sector are connected.
The most important finding of the study is that a positive and statistically significant association exists between sustainability innovation announcements and the market value of companies.
When sustainability innovation announcements are reported regularly it explains an increase of 0.82% in the market capitalisation of the studied companies.
Investments on sustainable practices by companies lead to the creation of economic value. The results imply that sustainability innovations can be relevant to the top management of companies operating in the business development.
On top of that, information on sustainability innovations can also be useful to stock market investors when they evaluate the future growth potential of companies, says Professor Seppo Junnila from Aalto University, Finland.
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