REAKCJE RYNKU NA ZMIANY SKŁADÓW INDEKSÓW ESG
MARKET REACTIONS TO ESG INDEX RECONSTITUTION

Summary/Abstract: The purpose of the article is to explore the subject of investor reactions to changes in the composition of ESG indices based on the results of previous research. The used research method is a critical review of the literature. The results of the most studies to date show that investors react to a signal in the form of a company's inclusion in or exclusion from an ESG index. However, the results widely vary in terms of the nature of this reaction. And there is much to indicate that this reaction may be contextual and modifying, depending on the pattern of other factors such as environmental conditions or company characteristics. Understanding the mechanisms of investor reaction to ESG indices reconstitution is important both for market functioning and for the companies themselves. In the case of the latter, it will allow more informed decisions to change ESG policies resulting in a company's inclusion or exclusion from an index, and to make choices about the indices in which a company wants to be present.

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