Governmental and scientific news and insights on investor oriented environmental, social, and governance (ESG) data.

Environmental Performance and Analyst Information Processing Costs

This study tests the hypothesis that analyst information processing costs vary positively in the level of firms’ environmental performance ratings. Based on proxies for analyst information processing costs (e.g., the number of stocks followed, frequency and timeliness of earnings revisions, the accuracy of earnings forecasts), we find results to support this hypothesis. These findings deepen [...]

By | 2016-09-18T12:11:18+00:00 September 18th, 2016|CSR, Firm Value, Indicators, Investors|0 Comments

The Tiny Trumpet: The Surprisingly Weak Relationship from Advertising to Corporate Social Responsibility

Theorists have given strategic and political explanations to expect a relationship from advertising to CSR. Contrary to this expectation, the nearly thirty studies that have tested the relationship from advertising to CSR have yielded evidence that is surprisingly weak. The current chapter systematically reviews this literature and conducts its own international panel study. The present [...]

By | 2016-09-18T12:08:45+00:00 September 18th, 2016|CSR, Governance|0 Comments

CEO Wealth Sensitivity and Corporate Social Responsibility

We use CEO wealth sensitivity to stock performance (delta) and stock volatility (vega) to provide empirical evidence that CEO compensation structure influences firm Corporate Social Responsibility (CSR) ratings. We find that delta has no significant effect on CSR rating, while vega has a strong, causal relationship with CSR. This leads us to believe that CEOs [...]

By | 2016-09-18T12:05:58+00:00 September 18th, 2016|Financial, Firm Value, Governance, Investors|0 Comments

PWC report: It’s not just about the financials – the widening variety of factors used in investment decision making

Investment professionals are becoming more and more interested in understanding how environmental, social and governance matters affect businesses. So PWC asked them to talk candidly and in some depth about how they use ESG information, how well they think companies do in communicating it, whether it is growing in importance and where the gaps are [...]

By | 2016-09-18T12:03:29+00:00 September 18th, 2016|CSR, Financial, Firm Value, Integrated Reporting, Investors|0 Comments

Peer Effects of Corporate Social Responsibility

We investigate how firms react to their peers’ commitment to corporate social responsibility (CSR), using a regression discontinuity design that relies on the passing or failing of CSR proposals by a small margin of votes during shareholder meetings. We find the passage of a close-call CSR proposal is followed by the adoption of similar CSR [...]

By | 2016-09-18T12:01:16+00:00 September 18th, 2016|CSR, Firm Value, Governance|0 Comments

Singapore Exchange introduces mandatory sustainability reporting

The Singapore Exchange (SGX) has introduced a comply or explain requirement for their issuers, to be introduced after 31st December 2017. The Policy Statement on Sustainability Reporting: Issuers make regular financial reports to their investors that are used for assessment of the likelihood of repayment (in the case of debt securities) and the returns on [...]

By | 2016-09-10T17:58:18+00:00 September 10th, 2016|CSR, Firm Value, Governments, Investors, Law|0 Comments

Corporate Social Responsibility and CEO Risk-Taking Incentives

In this paper, we explore how firms adjust CEO compensation incentives in response to corporate social responsibility (CSR) standing. Specifically, we focus on the effect of CSR standing on CEO’s risk-taking incentives. We hypothesize that because firms possessing better social performance generate insurance-like moral capital that protects managers from market discipline, risk averse managers tend [...]

By | 2016-09-10T17:55:55+00:00 September 10th, 2016|CSR, Firm Value, Governance, Investors, Risk|0 Comments

Sustainability Rating – Credit Rating – Approaching the Legal Perspective

Sustainability rating has been developed and shaped by actors within financial markets. Any analytical and systematic approach to the sustainability rating sector has been facing mainly a mélange of descriptions, statements and business practices of the market players involved. The research question of this paper is to explore whether legal aspects of European credit rating-based [...]

By | 2016-11-24T12:14:08+00:00 September 10th, 2016|Financial, Firm Value, Governance, Investors|0 Comments

Causal Effect of Analyst Following on Corporate Social Responsibility

I examine the influence of sell-side financial analysts on corporate social responsibility (CSR), and find that firms with greater analyst coverage tend to be less socially responsible. To establish causality, I employ a difference-in-differences (DiD) technique, using brokerage closures and mergers as exogenous shocks to analyst coverage, as well as an instrumental variables approach. Both [...]

By | 2016-11-24T12:14:08+00:00 September 10th, 2016|CSR, Firm Value, Investors|0 Comments

Environmental Performance and Analyst Information Processing Costs

This study tests the hypothesis that analyst information processing costs vary positively in the level of firms’ environmental performance ratings. Based on proxies for analyst information processing costs (e.g., the number of stocks followed, frequency and timeliness of earnings revisions, the accuracy of earnings forecasts), we find results to support this hypothesis. These findings deepen [...]

By | 2016-09-05T09:57:51+00:00 September 5th, 2016|Environmental, Firm Value, Indicators, Investors|0 Comments