[KN]It can damadge their reputation.
[APP]For example an oil company responsible for an oil spill may see its share price fall as people boycott its products.
[AN]Thus when investors lose confidence in a company’s future profits or reputation due to environmental issues, demand for its shares falls, causing the share price to decrease which can lead towards a decline in brand image and thus reduce customer loyalty.
12 Analyse how a company's poor environmental record could negatively affect its share price
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Fatima ibtehaj
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Aarib Saad
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Re: 12 Analyse how a company's poor environmental record could negatively affect its share price
(KN)Shareholders will not want to associate with a business with bad publicity, due to high risk.
(APP)For instance, a steel mill that has statistically contributed a high amount to air pollution, will be heavily criticized by environmentalists.
(AN)Thus, making it so that business will have a smaller consumer base as many people might boycott due to this, leading to poorer cash-flow, thus lower number of investors, so business will be forced to lower prices.
(APP)For instance, a steel mill that has statistically contributed a high amount to air pollution, will be heavily criticized by environmentalists.
(AN)Thus, making it so that business will have a smaller consumer base as many people might boycott due to this, leading to poorer cash-flow, thus lower number of investors, so business will be forced to lower prices.