Stakeholder Performance and Shareholder Value: Evidence from the Corporate Knights Global 100
Keywords:
: stakeholder theory; corporate social performance; shareholder value; asset pricing; benchmark sensitivity; JUST 100Abstract
Stakeholder theory holds that firms which attend to the interests of workers, customers, communities, and shareholders alike should, over time, outperform firms that narrowly pursue shareholder interests alone (Freeman, 1984; Jones, 1995), and a large empirical literature broadly, though not universally, supports a positive association between stakeholder-oriented conduct and financial performance (Orlitzky, Schmidt, & Rynes, 2003; Friede, Busch, & Bassen, 2015). This paper develops a Stakeholder Performance and Shareholder Value framework that integrates this literature with asset-pricing research on the gradual, attention-constrained pricing of non-financial signals (Edmans, 2011), specifying five constructs and six propositions that jointly predict when and how strongly stakeholder performance should translate into shareholder returns. To illustrate the framework, the paper presents a data-rich empirical analysis of the ten publicly traded companies ranked highest on JUST Capital's 2025 ranking of America's Most JUST Companies, tracking their individual and portfolio stock performance against the S&P 500 from 2021 through 2025 using six tables and four original figures, including a growth-of-$100 comparison and a risk–return scatter plot. Consistent with the framework's cautionary propositions, the results are benchmark-sensitive: the ten-firm equal-weighted portfolio achieved a 13.45% annualized return against a 14.43% return for the cap-weighted S&P 500 over the period studied, even though JUST Capital's own long-run, full-sample tracking shows the broader JUST 100 index outperforming an equally weighted Russell 1000 benchmark by a wide margin. The paper contributes an integrative framework and a transparent, replicable illustration of how sample breadth, benchmark choice, and market regime jointly shape conclusions about the financial value of stakeholder performance, offering both a research agenda and a methodological caution for scholars and practitioners in this area.
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Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, 5(4), 210–233. https://doi.org/10.1080/20430795.2015.1118917
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Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441. https://doi.org/10.1177/0170840603024003910
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