An independent think tank that conducts and disseminates research on ESG and finance

Does gender diversity on corporate boards reduce information asymmetry in equity markets?

We examine the relation between the gender diversity on boards of corporations and the levels of information asymmetry in the stock market. Prior evidence suggests that the presence of women on director boards increases the quantity and quality of public disclosure by firms, and we therefore expect firms with higher gender diversity on their boards [...]

By | December 19th, 2017|New research|0 Comments

The Impact of the Morningstar Sustainability Rating on Mutual Fund Flows

We examine the effect of the introduction of Morningstar’s Sustainability Rating in March 2016 on U.S. mutual equity fund flows. Using panel regressions, propensity score matching, and an event study methodology we find strong and robust evidence that retail investors shift money away from low-rated and into high-rated funds. The effect is driven by the [...]

By | December 19th, 2017|New research|0 Comments

Oxford University WP: Corporate Sustainability Performance and Bank Loan Pricing: It Pays to Be Good, but Only When Banks Are Too

This study examines whether and under what conditions corporate sustainability performance is reflected in bank loan prices. By taking the sustainability performance of the lending bank into account, I show that borrowers with strong sustainability performance pay lower loan spreads than borrowers with weak sustainability performance--however, only when the lending bank exhibits strong sustainability performance. [...]

By | December 19th, 2017|New research|0 Comments

CFA Institute survey: Global perceptions of ESG investing 2017

Global CFA Institute members share their views on how ESG issues influence the investment process. 73% take ESG Issues into account – same as in 2015 – primarily to manage risks. The biggest factors that limit the ability to use non-financial information include: ·         Lack of appropriate quantitative ESG info 55% ·         Lack of comparability [...]

By | December 7th, 2017|Ikke kategoriseret, New research|0 Comments

Quality of Corporate Social Responsibility Disclosure and Cost of Equity Capital

This article explores the relationship between the quality of corporate social responsibility (CSR) disclosure and the cost of equity capital by analyzing the financial data and CSR reports of A-share listed firms in China from 2008 to 2014. It is shown that the quality of CSR disclosure is negatively related to cost of equity capital [...]

By | December 3rd, 2017|New research|0 Comments

Corporate Social Responsibility and Capital Allocation Efficiency

We investigate the relationship between corporate social responsibility (CSR) and firm-level capital allocation efficiency. Using seminal investment-Q framework, we provide evidence that CSR distorts investment sensitivity to Q. We further determine that this effect of CSR is moderated by the assumed level of agency conflict, stakeholder engagement, as well as financial slack. We also document [...]

By | December 3rd, 2017|New research|0 Comments

The Effect of Investor Inattention on Voluntary Disclosure

We employ a shock to institutional investor attention developed by Kempf, Manconi, and Spalt (2016) to examine whether investor attention influences firms’ voluntary disclosure decisions. Using three common voluntary disclosure methods (management guidance, non-GAAP disclosures, and conference calls), we investigate whether a change in investor attention affects firms’ propensity to provide voluntary disclosure and the [...]

By | December 3rd, 2017|New research|0 Comments