Environmentally sensitive industries are often portrayed in a negative light as a result of corporate practices that harm the environment and society. In order to improve their reputation, firms should use strategies that could benefit both the firms themselves and the stakeholders. Therefore, firms categorized in these industries often participate in CSR activities to improve reputation, reduce the information asymmetry, and mitigate the firm’s risks. By using international samples, we investigate how CSR can influence the cost of equity financing for firms categorized as sensitive to the environment. We collected the data from 2008 to 2019 with total observations of 1.072. Our results show that firms in environmentally sensitive industries will experience lower equity financing costs when engaging in CSR activities. The results still hold when we analyze using the environmental pillar score and social pillar score individually, as well as when the individual cost of equity is used as the proxy for the dependent variable. Furthermore, we discovered that non-Asian firms will experience a lower cost of equity compared to the companies located in the Asia region.

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