Ioannou and Serafeim (2015)

Ioannou, Ioannis and George Serafeim. "The Impact of Corporate Social Responsibility on Investment Recommendations: Analysts’ Perceptions and Shifting Institutional Logics." Strategic Management Journal, July, 2015.

From the authors’ abstract: “We explore the impact of corporate social responsibility (CSR) ratings on sell-side analysts’ assessments of firms’ future financial performance… Using a large sample of publicly traded US firms over 15 years, we confirm that in the early 1990s, analysts issue more pessimistic recommendations for firms with high CSR ratings. However, in more recent years analysts progressively assess these firms less pessimistically, and eventually they assess them optimistically. Furthermore, we find that more experienced analysts and analysts at higher-status brokerage houses are the first to shift the relation between CSR ratings and investment recommendation optimism. We find no significant link between firms’ CSR ratings and analysts’ forecast errors, indicating that learning is unlikely to account for the observed shifts in recommendations.”

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1507874