Tag Archives: Climate Change

Propagation of Climate Disasters Through Ownership Networks

By | March 7, 2024

Climate risk is one of the greatest challenges facing the world today and investors are taking notice.  But a full understanding of how climate risks get implemented into firm policy remains elusive. In our recent paper, we study the propagation of climate disasters through common ownership networks as a mechanism through which investors may impact… Read More »

Environmental Externalities of Corporate Culture: Evidence from Firm Pollution 

By | January 8, 2024

In recent decades, there has been a marked increase in concerns about the adverse environmental impacts of corporate production activities. This heightened awareness stems from the growing threats posed by climate change, resource depletion, and ecological degradation. As companies continue to prioritize profit maximization and shareholder value, their toxic emissions have come under scrutiny. These… Read More »

Where the Wild Things Are? The Governance of Private Companies 

By | April 20, 2023

Privately owned companies far outnumber public ones. They constitute the lion’s share of the companies in our world and, accordingly, have a comprehensive impact on commercial reality. There are over 25,000,000 private companies in the U.S. and around 4,000 public ones. Furthermore, while the number of public corporations is lower than its peak in the… Read More »

Climate Disclosure Line-Drawing – and Why to Take Both Sides in the ESG Debate Seriously 

By | April 20, 2023

Over the past year, three converging trends have put environmental, social, and governance (“ESG”) topics at the center of yet another polarizing national debate.   ESG Mainstreaming. The first is that investments that integrate ESG factors in some way have gone mainstream over the past decade.  ESG is no longer limited to “sustainable, responsible, and impact”… Read More »

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 »