We investigate the implications of having socially responsible investor ownership (SRIO) when firms violate environmental regulations. Our results show that SRIO concentration in listed corporations provides beneficial insurance-like effects against negative stock market reactions during such events. Moreover, following environmental violations, firms with higher SRIO outperform their lower peer group for up to 6 months. This confirms the real effect associated with SRIO, validating investors' perceptions. As economic mechanisms to our finding, we show that the presence of SRIO helps mitigate the adverse impact of violating companies' relationships with creditors and suppliers. These findings are consistent with the hypothesis that having SRIO in the share registry is perceived as a valuable signal to investors of “green” credibility in these violating companies.