Green contract awards show a significant 5.6% return when tested in a 3-day event study analysis using market-adjusted CARs. 

This is the key finding from the study conducted by TenderAlpha and Penn State University on the differential response of stock prices to green public contract awards. 

The preliminary analysis, which used two of TenderAlpha’s data feeds - the Unified Global Government Contracts Feed and the Global Green Public Procurement Contracts Feed - showed that on average the market responds positively to green contract awards when various benchmark models are used to estimate abnormal returns.

Table 1 below shows the average returns around green (about 4% of the contracts) and non-green contracts. 

	Green	Non-green	Difference
Market adjusted CAR (%)	0.056	-0.008	0.064∗∗
FF CAR (%)	0.046	-0.013	0.059∗∗
FFM CAR (%)	0.058	-0.004	0.062∗∗
Market adjusted BHAR (%)	0.037	-0.023	0.060∗
FF BHAR (%)	0.029	-0.027	0.056∗
FFM BHAR (%)	0.040	-0.019	0.059∗

Table 1 source: Preliminary analysis by Mihail Velikov and Han Xiao from Penn State University

Further, the research also sought results where CAR is the 3-day cumulative abnormal returns based on different adjustments, Market, FF3, and FFM, as well as where BHAR is the 3-day buy-and-hold abnormal returns based on different adjustments, Market, FF3, and FFM. 

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