Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data

This study investigates whether pollution data released by the EPA in the June 1989 Toxics Release Inventory (TRI) were "news" to journalists and investors. The results indicate that the higher pollution figures (such as air emissions or offsite shipments of toxic waste) were in a firm′s TRI reports, the more likely print journalists were to write about the firm′s toxic releases. Investors also found this pollution information of interest, since nearly three quarters of the TRI pollution releases came from publicly held companies. Stockholders in firms reporting TRI pollution figures experienced negative, statistically significant abnormal returns upon the first release of the information. These abnormal returns translated into an average loss of $4.1 million in stock value for TRI firms on the day the pollution figures were first released.