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

Credibility of Sustainability Reports: The Contribution of Audit Committees

Concerns about the credibility of sustainability reports can be mitigated through assurance. Although audit committee remit encompasses monitoring of sustainability issues, there are potential complementary and substitution between governance mechanisms. This paper explores the relationship between audit committees and sustainability reporting assurance using resource dependency theory. We find audit committee characteristics have an impact, additional [...]

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

The Impact of Top Executive Gender on Asset Prices: Evidence from Stock Price Crash Risk

We examine the implication of executive gender on asset prices. Using a large sample of US public firms during 2006--2015, we find a negative association between female CFOs and future stock price crash risk. However, the impact of female CEOs on crash risk is not statistically significant. The results support the notion that CFOs play [...]

By | January 29th, 2018|New research|0 Comments

The Burden of Attention: CEO Publicity and Tax Avoidance

We use search volume index (SVI) for a CEO’s name and stock ticker from Google Trends to measure CEO publicity, and examine the competing hypotheses on its relation to tax avoidance. On the one hand, CEOs who receive more attention from retail investors may engage in tax evasion activities to meet investors’ performance expectations; on [...]

By | January 29th, 2018|New research|0 Comments

Moderating Powerful CEOs through Improved Governance

This paper interfaces with two controversies in the literature: how to reign in powerful CEOs, and whether and when shareholders gain governance mandates, such as those in the Sarbanes-Oxley Act (SOX) of 2002 and NYSE/NASDAQ listing rules. We use the concurrent passage of the Sarbanes-Oxley Act (SOX) of 2002 and NYSE/NASDAQ listing rule changes as [...]

By | January 29th, 2018|New research|0 Comments

An Analysis of Oil & Gas Company Disclosures from the Perspective of the TCFD

We conducted a type of “field experiment” to evaluate how difficult it will be for companies to implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) published in June of 2017. These recommendations are based on the four categories of governance, strategy, risk management, and targets and metrics. Beneath these are 11 [...]

By | January 29th, 2018|New research|0 Comments

New analysis of the Danish ESG reporting

FSR – danske revisorer (Danish Auditor Association) has published an analysis of the status of the non-financial reporting for all the listed Danish companies with more than 500 employees. The analysis showed many interesting insights – one of them being that, in general, there is a need for increased robustness to the reporting. If the [...]

By | January 13th, 2018|New research|0 Comments

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