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

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

PRI publishes voluntary climate reporting indicators based on TCFD recommendations

Following COP23, the PRI has published new voluntary climate-related indicators in its Reporting Framework aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. As of the 2018 reporting cycle, signatories will be able to voluntarily report and disclose on 14 new indicators and six original indicators which have been updated following TCFD recommendations. [...]

By | November 27th, 2017|New research|0 Comments

Pay for Praise: Do Rating Agencies Get Paid More When They Provide Higher Ratings? An Examination of the Consequences of the Recalibration of Municipal Debt

We ask whether credit rating agencies receive higher fees and gain greater market share when they provide more favorable ratings. We investigate this issue using Fitch and Moody’s 2010 recalibration of their rating scales, which increased ratings in the absence of any underlying change in issuer credit quality. Consistent with concerns raised by critics of [...]

By | November 24th, 2017|New research|0 Comments

Member State Implementation of Directive 2014/95/EU

A comprehensive overview of how Member States are implementing the EU Directive on Non-financial and Diversity Information.  The last two years have been a defining time for corporate non-financial reporting in Europe. The introduction of the EU Directive on the disclosure of non-financial and diversity information (Directive 2014/95/EU) has set a clear course towards greater [...]

By | November 24th, 2017|New research|0 Comments

Corporate ESG Profiles and Investor Horizons

Questions and debate surround institutional investor preferences regarding the Environmental, Social and Governance (ESG) profiles of their portfolio firms. To address these issues, we examine changes in their portfolios and find that preferences for corporate ESG depend critically on investor horizons: Investors with longer horizons tend to prefer higher-ESG firms, while short-term investors prefer the [...]

By | November 18th, 2017|New research|0 Comments

The Effects of Environmental, Social and Governance Disclosures and Performance on Firm Value: A Review of the Literature in Accounting and Finance

This paper not only attempts to survey the burgeoning literature on environmental, social and governance disclosures and performance and their effects on firm value, but its focus also lies on highlighting stylised observations coming from the most recent work that has not yet become part of the ‘conventional wisdom’ in the field. In addition, it [...]

By | November 18th, 2017|New research|0 Comments

How global is international CSR research?

While studies on international corporate social responsibility (CSR) have expanded significantly, their true global nature can be questioned. We systematically review 494 articles in 31 journals over a 31-year period. We assess the embeddedness of CSR in international management/business (IB); analyze the coverage of developing, emerging, and developed countries; map the literature thematically; summarize key [...]

By | November 18th, 2017|New research|0 Comments

MSCI: Out of Whack – U.S. CEO Pay and Long-term Investment Returns

Last year, MSCI asked whether pay packages given to U.S. chief executive officers reflected long-term shareholder returns and found they did not.1 The bottom fifth of companies by equity incentive award outperformed the top fifth by nearly 39% on average on a 10-year cumulative basis. That study looked at awarded pay — of which 60%-70% [...]

By | October 6th, 2017|New research|0 Comments

MSCI: Funds for 2.7 trillion USD in Net Asset Value are exposed to Asset Stranding risk

A confluence of regulatory and non-regulatory factors is driving the adoption of renewable energy and other clean energy technologies globally, while headwinds facing fossil fuels continue to mount. Measuring how one’s investments are positioned relative to this transition towards a low carbon economy can help the end investor understand what long-term bets – intended and [...]

By | September 20th, 2017|New research|0 Comments

Investment Professionals’ Use of Corporate Social Responsibility Disclosures

We conduct an experiment to examine investment professionals’ use of corporate social responsibility (CSR) disclosures when making personal investment decisions or investment recommendations to clients. We predict and find that investment professionals are more willing to personally invest and recommend investment to a client when a firm discloses positive CSR performance than when it makes [...]

By | September 1st, 2017|New research|0 Comments