Tag Archives: Climate Change

Climate-Related Uncertainty and Managerial Short-Termism

By | August 12, 2022

In a new study, we examine whether climate-related uncertainty leads to increased managerial short-termism. “Climate-related uncertainty” refers to managers’ inability to predict the scale and costs of climate change on their firm’s operating environment. Managers, policy makers, and institutional investors have all expressed increased concern about climate-related uncertainty, especially uncertainty stemming from exposure to natural… Read More »

How to Contract for ESG: Sustainability-Linked Bonds and a New Investor Paradigm 

By | July 14, 2022

Companies today are facing unprecedented pressure to make progress on environmental, social, and governance (ESG) issues. The demand for companies to address these issues is not new, but a relatively recent development is that this demand now comes from investors, rather than activists or other stakeholders. The pressure from investors has caused many companies to… Read More »

ESG Commitment and the Value of “Walking the Talk”: Evidence from Closed-End Funds

By | April 5, 2022

Does a firm’s initiative for Environmental, Social, and Governance (ESG) increase firm value? In our recent working paper, we investigate how a firm’s commitment to ESG can increase (or decrease) the firm value using closed-end funds (CEFs) as an empirical laboratory. In particular, we focus on the role of credible commitments to ESG in determining the… Read More »

The role of capital markets in saving the planet and changing capitalism – just kidding 

By | March 31, 2022

Given the emphasis on Environmental, Social, and Governance (ESG) in the media and among the finance community, one could easily believe that capital markets are a major contributor to the goal of limiting global warming. We argue this perception is largely false; a narrative strongly pushed by the finance industry to highlight green initiatives and,… Read More »

Giving the ‘green light’ to executive pay? Shareholder monitoring and pay-for-carbon-performance

By | March 7, 2022

Climate change poses significant risks to the private sector, which researchers estimate to be in the order of $2.5-24 trillion, or up to 17% of global assets under management. However, given the most significant climate change risks may not materialize within the tenure of current corporate and financial actors, direct incentives to avert the tragedy of the horizon may… Read More »

Financing Climate Justice: Taxation-and-Bonds Strategy

By | March 2, 2022

During the most recent United Nations Conference of the Parties (COP-26) on Climate Change, fair financialization of climate justice endeavors gained unprecedented momentum. This post proposes a novel taxation-and-bonds strategy that targets redistributing the gains of a warming earth around the world to offset the losses of global warming. Contemporary attempts to finance climate change mitigation… Read More »

Freedom of Information and Industrial Pollution

By | February 15, 2022

Industrial pollution has staggering consequences in terms of premature deaths, productivity losses, and health care costs. In 2015, conservative estimates put the number of pollution-related deaths at nine million, which represents roughly 16% of all deaths worldwide, and the financial cost of pollution-related deaths and sickness at 4.6 trillion US dollars, which represents about 6.2%… Read More »

Recent Comments on Improving Accountability in Net-Zero Commitments

By | February 9, 2022

With the rapid expansion of corporate net-zero commitments and the recent pledge by financial institutions (FIs) – with over $130 trillion in assets – at COP26 in Glasgow to hit net-zero emissions by 2050, a credible mechanism to measure these commitments and hold companies accountable for meeting them is of critical importance. To that end,… Read More »

Comments to the Commodity Futures Trading Commission on the proposed creation of a carbon markets subcommittee of the Energy and Environmental Markets Advisory Committee

By | September 23, 2021

The following is an edited comment letter that was submitted to the Commodity Futures Trading Commission (CFTC, or Commission) on September 22nd for the invitation to comment on the proposal by the Commercial Energy Working Group to form an EEMAC carbon markets subcommittee.[1] The proposed stakeholder group would produce a report on principles for designing the derivatives… Read More »

Nature’s locus standi: Taking the Environment to Court

By | September 6, 2021

With institutions, both public and private, defining the functioning of major world economies, we have come a long way from the early days of industrialization to extensive urban development and technical advancement. In this developmental process, vital players in the economy seem to have neglected the importance of safeguarding the natural environment. Actions of individuals,… Read More »