Environmental health security as a developmental goal is directly linked to environmental quality across the globe. China believes that maintaining an attractive, stable and profitable environmental stock market can provide the needed private sector support for national environmental protection initiatives. However, the environmental stock market in China is unstable relative to others, and highly susceptible to frequent and contemporaneous mass movement of investors to perceived safer stocks. This study analysed the degree to which environmental stock investors move away in herds in response to sporadic shocks on the Chinese stock market. Four robust econometric models are used analysed environmental stocks classified as the KGRM MSCI China IMI Environment 10/40 Index. The study shows endemic presence of herding behaviour among investors based on the results of three of the models. If this condition continues, it will negatively affect capital flow for environmental protection and affect environmental health security in China.
