Companies and investors have increasingly focused on embedding Environmental, Social, and Governance (ESG) considerations into their strategies. While the term ESG has no official definition and defies easy description, we define companies with an ESG strategy as those making a good faith commitment to managing ESG-related risks to enhance long-term shareholder value. To use the… Read More »
The debate on whether environmental, social and governance (ESG) reporting should be mandatory is ongoing and of growing importance for regulators. Different institutions are working on new mandatory ESG disclosures. For example, the European Union passed the Corporate Sustainability Reporting Directive (CSRD) in 2014 and is now preparing to adopt the European Sustainability Reporting Standards… Read More »
Environmental, Social, and Governance (ESG) investing has been gaining momentum in recent years as investors increasingly recognize the importance of incorporating ESG factors into their investment decisions. ESG investors rely on third party rating agencies that specialize in measuring the ESG performance of companies. There are many ESG rating agencies in the market and some… Read More »
Sustainable finance is a burgeoning sector, and the jury is still out on whether this is just a bubble, inflated by greenwashing practices, or a genuine step towards better ESG (environmental, social, and governance) conditions – or a combination of the two. Whatever the answer, sustainable finance is likely to remain high on the agenda… Read More »
Do firms engage in political competition in environmental lobbying when they have opposing environmental stances? If yes, is there any deadweight loss of corporate value and social resources due to such political competition? Our recent working paper theoretically and empirically explores how firms can compete to capture an environmental policy through lobbying. Corporate lobbying is… Read More »
Since 2007, a novel debt type, green bonds, has emerged as a popular instrument to raise and direct capital toward projects that curb climate change risk. Corporations, government agencies, supranational entities, and municipalities issue these bonds mainly in the US, China, and Europe. Annual green bond issuance has experienced exponential growth from $37.1 in 2014… Read More »
Over the last decade, there has been a significant increase in the popularity of socially responsible investment (SRI) funds. These funds claim to incorporate environmental and social (E&S) risks into the selection of their portfolio firms and the majority of these funds also claim that they engage with their portfolio firms to improve the real-world… Read More »
This essay summarizes new research findings regarding cryptocurrency-exposed companies (companies that hold cryptocurrencies) and why they should be excluded from Environmental, Social, and Governance (ESG) investment funds. ESG is an amorphous term with no universally agreed-upon definition. The environmental factor includes considerations like a company’s pollution, water usage, and effects on biodiversity. Social factors include… Read More »
Being green is not easy, but is it costly? Our recent paper attempts to answer this question for the U.S. federal government. The federal government is the largest consumer in the world, spending more than $650 billion buying products and services from firms in the private sector each year. Government contracts are considered green if… Read More »
In a new paper, I examine changes in CEO labor market outcomes following corporate environmental misconduct, which creates negative externalities that firms are required by law to prevent. Corporate activities create significant negative environmental externalities. These economic costs can exceed $4.7 trillion a year, are multi-sectoral, and appear through the entire lifecycle of products. Externalities… Read More »
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