At the recent Group of Twenty summit in Osaka, Japan, leaders from the countries with the largest and fastest-growing economies discussed major economic and environmental challenges the world is facing right now. Based on the stock-market reaction, some may have falsely believed that things are going smoothly and the task of preserving peace and achieving environmental sustainability is being carried out.

All the papers and news programs were talking about an agreement that had been reached between Presidents Xi Jinping and Donald Trump. The US party promised not to implement new tariffs on US$300 billion worth of Chinese imports “at least for the time being” and that negotiations to end the year-long US-China trade war would resume, which provoked US equities to set new records.

Unfortunately, these numbers have obscured other important news – the US declined to cooperate with the other 19 members of the G20 on climate. Trump earlier announced Washington’s withdrawal from the 2015 Paris Agreement. Thus the world’s largest economy shows its priority is creating value for shareholders instead of the stakeholders.

However, as we know from the history of major brands, this strategy will not work in the long term. Back in 2015, one of the major car manufacturers in Germany found itself at the center of an unprecedented scandal. It has been dubbed the “diesel dupe.” Long story short, the US Environmental Protection Agency (EPA) found that many Volkswagen cars being sold in America had a “defeat device,” or software in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. The German car giant has since admitted cheating emissions tests in the US.

As a result, Volkswagen has lost more than 56% of its stock value, together with its chief executive officer, Martin Winterkorn, who had no choice but to resign. This was supposed to  “teach a lesson” to all those companies that run after shareholder value. But apparently it wasn’t enough to convince everyone.

One year later, in March 2016, The Economist published an article that defended the shareholder-value idea. True shareholder-value theory, according to the article, is pure, noble and socially beneficent. And that is despite admitting that it may be “a license for bad conduct, including skimping on investment, exorbitant pay, high leverage, silly takeovers, accounting shenanigans and a craze for share buy-backs, which are running at $600 billion a year in America.”

On the other hand, according to research by the School of Business and Law, Edith Cowan University, in Perth, Australia, “the promotion of sustainable development by the Chinese government increases information credibility towards corporate sustainability engagement, and relevant news can effectively increase market confidence, thereby reducing market dispersion through stock return volatility. The results show that firms with higher frequencies of sustainability news releases are associated with higher stock returns, suggesting that the market looks favorably on firms’ sustainability news releases and sustainability engagement increases market confidence and reduces stock return volatility.”

Still, it should be noted that the relationship between stock returns and sustainability news releases varies. The two are relatively less correlated in turbulent conditions and highly correlated during a period of calm. This pattern may be associated with investors’ short-term opportunistic behavior and the government’s direct market intervention, especially during a turbulent period.

A study provided by the School of Business, Hanyang University in South Korea, and Auburn University in the US state of Alabama also suggests that in daily data from 2010 to 2015, sustainability performance in the Asia-Pacific region is positively associated with major Asian stock markets. The authors found that “sustainable management helps firms or institutions perform innovative processes, reduce waste, and gain insight into possible growth areas. Therefore, sustainability is not an environmentally oriented strategy but a multifaceted solution that subsumes environment, society, and governance in public and private sectors.”

In conclusion, despite the fact that the US government is betting on shareholder value, multiple studies have shown that in the long term this might be a problem. Fortunately, consumers show their position by supporting environmentally friendly companies, such as Tesla. This month, the US electric-vehicle maker reported record deliveries (it is true that a Tesla Model 3 produces more carbon dioxide than a diesel car, but nevertheless, the trend toward electric cars supports the idea that consumers are becoming more environment-conscious).