The Role of Share Repurchases for Firms’ Social and Environmental Sustainability

Abstract This article embarks on ethical trade-offs at the sustainability/finance interface by contrasting shareholders’ interest in short-term financial returns with society’s counteracting ecological and social grievances. Scrutinizing share repurchases, we investigate a firm’s communicated sustainability orientation (i.e., its environmental value orientation) as well performance. Our results are based large-scale panel dataset of 491 U.S. firms observed from 2004 to 2016. The combines buyback data scores shareholder letters performance ratings. econometric models suggest no association between repurchase volumes, but significantly negative relationship buybacks cubic form. Executive stock options partially attenuate this relationship. Share repurchases turn negatively affect future study grasps consequences firms’ satisfaction discusses implications context contribution sustainable development, thereby providing important insights business ethics discourse.