This study investigates the relationship between the implementation of a corporate social responsibility (CSR) strategy and the corporate financial performance for a sample of 191 listed real estate investment companies from nine different countries. The sustainability of a company is measured using various self-constructed indices based on the Guidelines of the Global Reporting Initiative (GRI). A two-stage least squares regression framework is used to account for the problem of endogeneity. 

Overall, a positive association can be observed between the amount of disclosed overall CSR information of a listed real estate investment company and its market valuation. In general, the results from the empirical analysis conducted do not lend support to the neo-classical idea that the engagement in CSR activities and the implementation of a comprehensive CSR strategy destroy shareholder wealth. In fact, it is rather the opposite that is true. With regard to listed real estate investment companies, evidence shows that there is strong reason to suggest that a convincing business case for CSR can be made. Furthermore, investors value initiatives which have a clear and coherent link to the enhancement of future value creation processes such as efforts to mitigate environmental impacts by reducing resource and energy consumption of buildings. 

It therefore makes sense for business executives of such companies to implement appropriate CSR strategies into their core business functions. In order to reap the benefits from these activities, a listed real estate company has to report on its CSR engagements in detail and make this information public in a structured way. With regard to the implemented CSR strategy, a focus should be put on areas which directly relate to the core business and entail future cost advantages such as the investment into sustainable buildings or the enhancement of energy efficiency in portfolio properties. Reporting such efforts effectively is then key to enjoying the benefits of an enhanced valuation by capital markets.