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

Are Passive Investors a Challenge to Corporate Governance?

Corporate governance theories generally suggest that institutional investors could effectively improve the quality of governance through intervention and threat to exit. However, passive institutional investors such as index funds and ETFs lack the ability to exit and may not have strong motivation to intervene, thus lowering the quality of governance of the firms they heavily [...]

By | June 28th, 2018|New research|0 Comments

Yale University: Corporate Sustainability Metrics: What Investors Need and Don’t Get

While traditional socially responsible investors use Environment, Social, and Governance (ESG) performance metrics to exclude “bad actor” companies from their portfolios, the new interest comes from those who hope to match or beat market performance benchmarks. The prevailing wisdom suggests, however, that corporate sustainability leadership only rarely translates into marketplace success and recent studies to [...]

By | June 28th, 2018|New research|0 Comments

Accountancy Europe & WBCSD: Responding to assurance needs on non-financial information

Non-financial information (NFI) provides a clearer picture of a company’s financial performance than only financial information. NFI is increasingly important for investors and other stakeholders, who ask for assurance on NFI as they want to know whether they can trust the reported information. Due to different levels of maturity in NFI reporting, professional accountants approach [...]

By | June 28th, 2018|New research|0 Comments

BlackRock vs Norway Fund at Shareholder Meetings: Institutional Investors’ Votes on Corporate Externalities

Do institutional investors engage with companies on corporate externalities such as greenhouse gas emissions? And if so, why? We study voting at shareholder meetings by two emblematic global investors: BlackRock, a major asset manager, and the Norway Fund, a responsible sovereign wealth fund. Our data cover 2014 and include the two institutions’ votes on 35,382 [...]

By | March 30th, 2018|New research|0 Comments

Consequences of CEO Paycuts

Boards sometimes cut a CEO’s pay following poor performance. This study examines whether such CEO paycuts really work. We identify 1,496 instances of large CEO paycuts during the period 1994-2013. We then create a propensity-score-matched control group of firms that did not cut their CEOs’ pay and employ a difference-in-differences approach to examine the consequences [...]

By | March 30th, 2018|New research|0 Comments

PCAOB Inspection Reports and Shareholder Ratification of the Auditor

We examine the effect of unfavorable PCAOB inspection reports, which contain audit deficiencies related to GAAS and/or GAAP violations, on shareholder voting for the auditor ratification. We further investigate whether shareholders likely vote against ratification for the auditors receiving deficiency reports in a weak corporate governance environment. Overall, we do not find evidence that shareholders [...]

By | March 30th, 2018|New research|0 Comments

High Level Expert Group on Sustainable Finance (HLEG): Final Report 2018

The European Commission established the EU High-Level Group on Sustainable Finance (HLEG) to help develop an overarching and comprehensive EU roadmap on sustainable finance. It requested advice on how to ‘steer the flow of capital towards sustainable investments; identify steps that financial institutions and supervisors should take to protect the financial system from sustainability risks; [...]

By | March 2nd, 2018|New research|0 Comments

UNCTAD/ISAR publishes research paper by Center for ESG Research: Reporting on the Sustainable Development Goals

“The SDGs present an opportunity for business-led solutions and technologies to be developed and implemented to address the world’s biggest sustainable development challenges,” As noted in the SDG Compass. But if neither the corporate nor its capital providers can accurately and easily interpret information from Environmental, Social, and Governance (ESG) reporting, is ESG reporting really [...]

By | March 2nd, 2018|New research|0 Comments

Insights from the Reporting Exchange: ESG reporting provisions trends

The research conducted as part of the Reporting Exchange project supports the existing argument that the variety and overlap of corporate reporting provisions make this field complicated and confusing 1,2. The research has allowed us to draw the conclusions outlined in this paper: • There are currently over 1000 reporting requirements for sustainability information, representing [...]

By | March 2nd, 2018|New research|0 Comments

The Role of Information Asymmetry in CSR Reporting: A Comparison of Publicly-Traded and Privately-Held Firms

There is no consensus in the literature regarding what motivates firms to voluntarily publish corporate social responsibility (CSR) reports or who are the intended audiences of such reports. To help address this gap in the literature, I test whether the degree of information asymmetry between the firm and its owners is a significant factor contributing [...]

By | March 2nd, 2018|New research|0 Comments