Academic literature on the topic 'The social ESG-score'
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Journal articles on the topic "The social ESG-score"
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Tarmuji, Indarawati, Ruhanita Maelah, and Nor Habibah Tarmuji. "The Impact of Environmental, Social and Governance Practices (ESG) on Economic Performance: Evidence from ESG Score." International Journal of Trade, Economics and Finance 7, no. 3 (June 2016): 67–74. http://dx.doi.org/10.18178/ijtef.2016.7.3.501.
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Bhattacharya, Sonali, and Dipasha Sharma. "Do environment, social and governance performance impact credit ratings: a study from India." International Journal of Ethics and Systems 35, no. 3 (August 12, 2019): 466–84. http://dx.doi.org/10.1108/ijoes-09-2018-0130.
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Purpose The purpose of this study is to determine the impact of environment, social and governance (ESG) disclosure on credit ratings of companies in India. Design/methodology/approach Firms under study are listed on the Bombay Stock Exchange (BSE) 500 and represent almost 93 per cent of the total market capitalization on BSE. This study considers a sample of 122 firms from a population of 500 to examine the relationship between ESG scores and Credit Rating. The scope of this study is confined to those firms listed on the S&P BSE 500 which have made ESG disclosures and were rated by various credit rating agencies like Crisil, ICRA and CARE. Data were sourced from Bloomberg. Ratings were given in ascending order. In the first model, credit rating was used as predicted variable; ESG score as predictor variable and market capitalization, net debt to equity, and total debt to asset as control considering the ordered nature of dependent variable in the study, ordered logistic regression was applied. It was repeated taking individual scores on environment rating, social rating and governance rating as predictors. The authors further segregated the 122 selected firms into large, medium and low capital firms and assessed separate logistic regression models taking credit rating as the predicted variable and overall ESG score as the predictor. Findings It was found that overall ESG performance and performance of individual components (environment, social and financial variables such as market capitalization, and debt to equity ratio) had significant positive indicators of creditworthiness as measured through credit rating. Governance score had a positive and insignificant relation with credit rating. Market capitalization was observed to have significant direct relationship with credit worthiness. On the other hand, number of independent directors in companies showed significant inverse relationship with creditworthiness. ESG significantly impacted credit rating in the desired direction only for small- and middle-level firms; for large firms which already had higher credit rating, ESG showed no effect. It was also found that credit rating itself determined significantly the extent of overall ESG reporting and disclosure of its components. Originality/value This is unique study that covers the aspects of ESG reports and its impact on credit rating.
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Engelhardt, Nils, Jens Ekkenga, and Peter Posch. "ESG Ratings and Stock Performance during the COVID-19 Crisis." Sustainability 13, no. 13 (June 25, 2021): 7133. http://dx.doi.org/10.3390/su13137133.
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We investigate the association between Environmental, Social, and Governance (ESG) ratings and stock performance during the COVID-19 crisis. Although there is mixed evidence in the literature whether ESG is valuable in times of crisis, we find high ESG-rated European firms to be associated with higher abnormal returns and lower stock volatility. After decomposing ESG into its separate components, we find the social score to be the predominant driver of our results. Further, we argue that ESG is value-enhancing in low-trust countries, and in countries with poorer security regulations and where lower disclosure standards prevail.
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La Torre, Mario, Fabiomassimo Mango, Arturo Cafaro, and Sabrina Leo. "Does the ESG Index Affect Stock Return? Evidence from the Eurostoxx50." Sustainability 12, no. 16 (August 7, 2020): 6387. http://dx.doi.org/10.3390/su12166387.
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Recent findings provide evidence that companies highly rated in terms of Environmental, Social, and Governance (ESG) score report higher excess returns and lower volatility, this being supported by the assumption that ESG factors are considered, by market agents, as a good proxy for firms’ financial soundness. The aim of this paper is to investigate how ESG components affect stock returns. We use a two-step methodology to analyze the performance of companies included in the Eurostoxx50 index over the 2010–2018 period according to their ESG score. To classify companies in terms of ESG commitments, we combine several ESG indicators (quantitative ratings, scorings and qualitative-opinions) collected on a monthly basis. Our results do not support previous evidence; the Eurostoxx50 companies’ performance does not seem to be affected by their efforts in terms of ESG commitments.
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Kim, Sang, and Zhichuan (Frank) Li. "Understanding the Impact of ESG Practices in Corporate Finance." Sustainability 13, no. 7 (March 27, 2021): 3746. http://dx.doi.org/10.3390/su13073746.
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This study examines the relationship between environmental, social, and governance (ESG) factors and corporate financial performance. Specifically, we study various individual ESG categories, both ESG strengths and concerns, and aggregate ESG factor and their impact on corporate financial performance including profitability and financial risk. We find a positive effect of ESG factors on corporate profitability, and the effect is more pronounced for larger firms. Among different ESG categories, corporate governance has the most significant impact, particularly for firms with weak governance. We also find that ESG variables generally have a positive influence on credit rating. In particular, the social factor has the most significant impact on credit rating, while environmental score surprisingly has a negative effect. Overall, this research provides a rationale for ESG integration in the context of investment management and portfolio construction to maximize value and minimize risk.
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Atan, Ruhaya, Md Mahmudul Alam, Jamaliah Said, and Mohamed Zamri. "The impacts of environmental, social, and governance factors on firm performance." Management of Environmental Quality: An International Journal 29, no. 2 (March 12, 2018): 182–94. http://dx.doi.org/10.1108/meq-03-2017-0033.
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Purpose The ESG factor, which consists of environmental, social, and governance factors, represents the non-financial performance of a company. United Nations Principles for Responsible Investment invites investors to consider ESG issues when evaluating the performance of any company. Moreover, nowadays, the contribution of corporations towards sustainable development is a major concern of investors, creditors, government, and other environmental agencies. Therefore, the purpose of this paper is to examine the impact of ESG factors on the performance of Malaysian public-limited companies (PLC) in terms of profitability, firm value, and cost of capital. Design/methodology/approach A total of 54 companies are selected from Bloomberg’s ESG database that has complete ESG and financial data from 2010 to 2013. This study conducted panel data regressions such as the pooled OLS, fixed effect, and random effect. Findings Based on the regression results, there is no significant relationship between individual and combined factors of ESG and firm profitability (i.e. ROE) as well as firm value (i.e. Tobin’s Q). Moreover, individually, none of the factors of ESG is significant with the cost of capital (weighted average cost of capital, WACC), but the combined score of ESG positively and significantly influences the cost of capital (WACC) of a company. Practical implications As this is a new study on Malaysia, the findings of this study will be useful to investors, SRI analysts, policy makers, and other related agencies. Originality/value To the best of the authors’ knowledge, this study is among the first empirical study to examine the impact of ESG factors on the performance of Malaysian PLC in terms of profitability, firm value, and cost of capital.
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Liang, Hao, and Luc Renneboog. "The global sustainability footprint of sovereign wealth funds." Oxford Review of Economic Policy 36, no. 2 (2020): 380–426. http://dx.doi.org/10.1093/oxrep/graa010.
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Abstract With the emergence of sovereign wealth funds (SWFs) around the world managing equity of over $8 trillion, their impact on the corporate landscape and social welfare is being scrutinized. This study investigates whether and how SWFs incorporate environmental, social, and governance (ESG) considerations in their investment decisions in publicly listed corporations, as well as the subsequent evolution of target firms’ ESG performance. We find that SWF funds do consider the level of past ESG performance as well as recent ESG score improvement when taking ownership stakes in listed companies. These results are driven by the SWF funds that do have an explicit or implicit ESG policy and are most transparent, and by SWF originating from developed countries and countries with civil law origins. In relation to engagement, we find by means of two natural experiments with exogenous shocks (the Deepwater Horizon catastrophe and Volkwagen diesel scandal) that the ESG scores do not change significantly more for firms in which SWFs have ownership stakes. This potentially suggests that SWFs in general do not actively steer their target firms towards higher levels of ESG.
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Sahut, Jean-Michel, and Hélène Pasquini-Descomps. "ESG Impact on Market Performance of Firms: International Evidence." Management international 19, no. 2 (May 7, 2015): 40–63. http://dx.doi.org/10.7202/1030386ar.
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This study investigates how news-based scores in ESG (Environmental, Social, and corporate Governance) may have influenced the monthly stocks’ market return in Switzerland, the US, and the UK during the 2007–2011 period. We find that the variation of the overall ESG score is only significant in the UK. We also show that the changes in sub-category ratings of GRI (namely, governance, economic, environment, labor, human rights, society, and products) exhibit a small but significant impact on the stock’s performance during limited periods or on limited sectors, which varies among the countries. Finally, our non-parametric kernel regression highlights that the function linking a stock’s performance to its ESG-score changes is probably non-linear.
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Giannarakis, Grigoris, George Konteos, and Nikolaos Sariannidis. "Financial, governance and environmental determinants of corporate social responsible disclosure." Management Decision 52, no. 10 (November 11, 2014): 1928–51. http://dx.doi.org/10.1108/md-05-2014-0296.
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Purpose – The purpose of this paper is to investigate the vital determinants on the extent of corporate social responsibility (CSR) disclosure in a US context. The selected variables are CEO duality, the presence of women in the board, greenhouse gas (GHG) emissions, emission reduction initiatives, company's risk premium, financial leverage and industry's profile. Design/methodology/approach – The environmental, social and governance (ESG) disclosure score is used as a proxy for the extent of CSR disclosure calculated by Bloomberg. The influence of plausible variables on the ESG disclosure score and its sub-categories was examined by using the least squares dummy variable model (LSDV) incorporating 100 companies listed on Standard & Poor's 500 Index for the period 2009-2012. Findings – The results show that the emission reduction initiatives and GHG emissions influence positively the extent of ESG score. In addition, slight differences exist concerning the determinants of different types of disclosures. Furthermore, it is illustrated that a company's industrial profile seems to have differences among the extent of the different types of disclosure. Research limitations/implications – The sample of companies is based on the US companies incorporating only large-sized ones. Originality/value – The study extends previous studies with the inclusion of both traditional and innovative determinants of the CSR disclosure in USA taking into account four years of corporate data. A third party rating approach was adopted in order to calculate the extent of CSR disclosure. Finally, both the shareholders’ and the investors’ attitudes in relation to CSR disclosure are presented.
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Kang, Won, and Mookwon Jung. "Effect of ESG Activities and Firm’s Financial Characteristics." Korean Journal of Financial Studies 49, no. 5 (October 31, 2020): 681–707. http://dx.doi.org/10.26845/kjfs.2020.10.49.5.681.
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In this study, we examine how environmental, social, and corporate governance (ESG) activities differently affect firm value depending on a firm’s financial characteristics. The qualitative aspect of ESG activities, which is not reflected in ESG scores, is valued in the market based on a firm’s financial characteristics and is the motivation for the present study. We conducted empirical analyses employing multiple ESG score sets obtained from two different ESG evaluation institutions for the recent four-year period. We found that ESG performance has a positive effect on firm value, though some variations occur across the ESG element types, which is consistent with previous results. The positive effect is more pronounced in firms with higher profitability or foreign ownership, which implies that ESG activities can have a greater impact on firms with a strong financial ability to sustain these activities or those with disciplined foreign investors to monitor transparency. These results are robust to the two-stage least squares analysis to capture the reverse causality between ESG performance and financial variables. Our findings suggest that to maximize the effect of ESG activities, firms need to build market confidence through financial efforts, such as enhancing profitability and attracting foreign investments.
Dissertations / Theses on the topic "The social ESG-score"
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Ahlklo, Yrr, and Carin Lind. "E, S or G? A study of ESG score and financial performance." Thesis, KTH, Industriell ekonomi och organisation (Inst.), 2018. http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-246008.
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Sustainability is not a new concept to the financial markets, but its popularity and wider use have increased as people have grown more concerned about the future of this planet. However, the relationship between sustainable investments and financial performance is not clear. One of the most used measures of sustainability is the concept of ESG score, where E, S and G stand for environmental, social and governance. In this study, we investigate the relationship between ESG score and financial performance, both market and accounting based. We also separate the score into its individual parts E, S, and G, and try to distinguish which factor has the strongest relation to financial performance. To evaluate the relationship, a regression analysis was performed on a sample of Nordic stocks and the Sustainalytics ESG rank. Our findings concluded no significant relationship between ESG score and financial performance, neither market nor accounting based. The environmental factor (E) showed the strongest relation to financial performance, however slightly negative and only significant to one dependent variable out of three. Our results indicate that based on the ESG score used in this study, no conclusions can be drawn about financial performance. Since our research does not indicate a significant relationship, our recommendation is to invest in the highest ESG ranked stock in case of choosing between two otherwise similar stocks.Hållbarhet är inget nytt koncept inom finans, men dess popularitet och användning har ökat kraftigt. Dock är det fortfarande oklart hur hållbara investeringar förhåller sig till lönsamhet och avkastning. En av de mest använda hållbarhetsmåtten är ESG, som står för environmental, social and governance. I denna studie undersöker vi relationen mellan ESG-mått och lönsamhet, både marknads- och resultatbaserad. Vi delar också upp ESG i sina tre komponenter E, S, och G för att undersöka vilken faktor som har den starkaste relationen till lönsamhet. Detta görs genom en regressionsanalys med paneldata från ett urval av nordiska aktier och Sustainalytics ESG-mått. Vårt resultat visar ingen signifikant relation mellan ESG-mått och lönsamhet. Komponenten E visar den starkaste relationen till lönsamhet, ett signifikant och något negativt samband, men endast till en av tre responsvariabler. Vårt resultat indikerar således att inget samband verkar finnas mellan lönsamhet och dessa ESG-mått. Eftersom vår studie inte visar på något signifikant samband, blir vår rekommendation att investera i den aktien med högst ESG-mått, om man skulle välja mellan två annars lika aktier.
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Andersson, Pontus, and John Eskilson. "Hållbara fonders avkastning : En kvantitativ studie om en jämförelse av riskjusterad avkastning för svenska fonder baserat på ESG-score." Thesis, Linköpings universitet, Institutionen för ekonomisk och industriell utveckling, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:liu:diva-177754.
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Background: The Swedish fund savings have developed strongly over the past two decades. Together with this development, the knowledge that the earth's population is facing an extensive climate challenge has also increased. For many people today, living sustainably has become a central aspect of everyday life, and when it comes to investing their savings, the majority of Sweden's fund savers state that sustainability is something that is taken into account when choosing an investment. Investments in funds that based on measuring tools, show a high degree of sustainability have thus increased. This raises the question of whether these sustainable funds can generate a higher alpha and thus a better risk-adjusted return than the less sustainable alternatives available on the market. Previous studies have shown differences of opinion, which means that it is relevant to examine how these different types of funds perform against each other in the Swedish market. Purpose: The aim of this study is to analyze whether fund savers that are investing in sustainable funds can generate a higher alpha and thereby a better risk adjusted return than fund savers that invests in less sustainable alternatives. Methodology: The study was conducted with a quantitative method and a deductive approach. Sustainability ratings have been collected for 253 funds from a measuring institute. For these 253 funds, data in the form of net asset value have been collected between the period 2016 - 2020 monthly. These funds have then been evaluated based on risk-adjusted returns where regression analysis has been the groundwork for finding answers to whether alpha has been achieved compared to the market or not. Results obtained have then been statistically examined through various tests. Conclusion: After completed study, there were no signs that studied sustainable funds have given rise to a better risk-adjusted return than the less sustainable alternatives available on the market. Of the 253 funds included in the study, only five funds showed a risk-adjusted return statistically different from zero, where three had a negative return and two a positive return. When the 253 funds were divided into four different quartiles based on sustainability ratings, it appeared that the funds with a positive risk-adjusted return were placed in quartile four, which was the one with the highest sustainability rating. However, this may be based on chance and a result of two in a sample of 253 gives clear indications that efficiency prevails in the market.
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Sjöberg, Linn, and Elin Westerlund. "Sociala kontroverser och finansiell prestation med det sociala ESG-betyget som moderator : En kvantitativ studie på 487 publika bolag under en sexårsperiod." Thesis, Högskolan i Gävle, Avdelningen för ekonomi, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:hig:diva-36151.
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Syfte: Hållbarhet är ett ämne som vuxit och företags ageranden granskas i allt större utsträckning. För företag som går emot omvärldens krav och förväntningar höjs kritiska röster, ofta i media, vilket kan påverka företaget i fråga. Tidigare forskning har funnit tvetydiga resultat gällande effekten av kontroverser där såväl positiva, negativa eller inga effekter alls kunnat urskiljas. Det finns indikationer på att ESG-betygets olika dimensioner (E, S och G) har olika effekter varpå en separation av dessa är befogad. Studiens syfte är att undersöka om sociala kontroverser har någon effekt på företags finansiella prestation och om ESG-betygets sociala dimension har någon modererande roll i interaktionen mellan dessa. Forskningsfrågorna som studien ställer är huruvida företagskontroverser har en negativ effekt på företags finansiella prestation och om ESG-betygets sociala dimension modererar konsekvensen av en sådan effekt. Metod: Studien utgår från den positivistiska forskningstraditionen med en hypotetiskdeduktiv ansats. Studien har en kvantitativ metod med en longitudinell forskningsdesign där sekundärdata för 487 publika bolag för åren 2015–2020 använts. Data hämtades från Refinitiv Eikons databas och analyserades i statistikprogrammet IBM SPSS. Resultat & slutsats: Studiens resultat visar på ett negativ samband mellan sociala kontroverser och studiens mått på finansiell prestation samt att denna effekt modereras av det sociala ESG-betyget. Studien finner således att sociala kontroverser påverkar företags finansiella prestation negativt men att denna negativa effekt mildras genom ett högre socialt ESG-betyg. Examensarbetets bidrag: Studien bidrar till att föra forskningen på området framåt avseende den sociala dimensionen av ESG-betyg med hänsyn till sociala kontroverser. Förslag till fortsatt forskning: Som förslag till fortsatt forskning kan nämnas att rikta sig till de övriga delarna av ESG-betyget samt de övriga kategorierna av kontroverser, alternativt ett annat tidsperspektiv.Aim: Sustainability is a topic that has grown and companies’ actions are being examined to an increasing extent. For companies that go against the demands and expectations of its stakeholders, critical voices are raised, often in the media, which can affect the company in question. Previous research has found ambiguous results regarding the effect of controversies where both positive, negative or no effects could be discerned. There are indicators that the different dimensions of the ESG-score (E, S and G) have different effects, after which a separation of these is justified. The purpose of the study is to investigate whether social controversies have any effect on companies’ financial performance and whether the social dimension of the ESG-score has any moderating role in the interaction between them. The research questions posed by the study are whether corporate controversies have a negative effect on companies’ financial performance and whether the social dimension of the ESG-score moderates the consequences of such an effect. Method: The study is based on a positivist quantitative method with a hypotheticaldeductive research approach. The study adopts a longitudinal research design where secondary data for 487 public companies for the years 2015–2020 were used. The secondary data were collected from the Refinitiv Eikon’s database and analyzed in the IBM SPSS statistics program. Result & Conclusions: The results of the study show a negative correlation between social controversies and the study's measures of financial performance and that this effect is moderated by the social ESG-score. The study finds that social controversies affect companies' financial performance negatively, but that this negative effect is mitigated by a higher social ESG-score. Contribution of the thesis: The study helps to advance research in the field regarding the social dimension of the ESG-score and social controversies. Suggestions for future research: As a proposal for further research, a different time perspective or other parts of the ESG-score as well as the other categories of controversies could be examined.
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Ferro, André Cardoso. "A relação entre gestão de resultados e responsabilidade social empresarial." Master's thesis, Instituto Superior de Economia e Gestão, 2019. http://hdl.handle.net/10400.5/20370.
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Mestrado em Contabilidade, Fiscalidade e Finanças EmpresariaisEste estudo analisa a relação entre a Gestão de Resultados e a Responsabilidade Social Empresarial (RSE). Para tal, foi recolhida uma amostra final constituída por 568 empresas cotadas da União Europeia e EFTA, entre o ano de 2010 e o ano de 2018. Foi utilizado o modelo de Jones (1991) complementado por Kothari et al. (2005), para calcular os accruals discricionários. A RSE foi calculada através do score combinado de ESG (Environmental, Social and Governance), da base de dados ASSET4. Os resultados sugerem que a relação entre a gestão de resultados com base em accruals discricionários e a responsabilidade social empresarial é negativa. Os resultados são robustos para medidas alternativas de RSE, para diferentes níveis de gestão de resultados assumidos pelas empresas (aumentar ou diminuir resultados), bem como para níveis moderados de investimentos em RSE. No entanto, em anos de crise e em períodos de performance financeira negativa, a relação inverte-se, ou seja, durante períodos de dificuldade económica, a relação entre RSE e gestão de resultados é positiva. Assim, o estudo sugere que, durante bons períodos financeiros as práticas sustentáveis fazem parte do comportamento ético dos gestores. No entanto, em condições económicas desfavoráveis, a gestão serve-se, de forma oportunista, do estatuto de empresa sustentável para gerir resultados.
This study analyses the relationship between Earnings Management and Corporate Social Responsibility (CSR). To this end, a final sample of 568 listed companies from the European Union and EFTA was collected between 2010 and 2018. The Jones (1991) model complemented by Kothari et al. (2005) was used to calculate discretionary accruals. CSR was calculated using the combined ESG (Environmental, Social and Governance) score from the ASSET4 database. The results suggest that the relationship between earnings management based on discretionary accruals and corporate social responsibility is negative. The results are robust for alternative CSR measures, for different levels of earnings management assumed by companies (increase or decrease results), as well as for moderate levels of CSR investments. However, during periods of crisis or during periods of negative financial performance, the relationship is reversed, i.e., during periods of economic difficulty, the relationship between CSR and earnings management is positive. Thus, the study suggests that, during good financial periods, sustainable practices are part of the ethical behaviour of managers. However, in unfavourable economic conditions, management makes opportunistic use of a sustainable company's status to manage earnings.
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Fernandes, Patrícia Joana Gonçalves Queiroga. "The impact of Corporate Social Responsibility on the performance of European firms." Master's thesis, 2019. http://hdl.handle.net/10400.14/26885.
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This thesis investigates the relationship between a firm’s corporate social responsibility performance (CSR) and its financial performance in a European context. In order to evaluate this relationship, CSR performance is estimated through companies’ ESG scores, while financial performance is represented by the Return on Assets and Return on Equity Ratios, and Tobin’s Q is used as a proxy for firm value. Evidence is found that CSR performance and firm financial performance/value are positively correlated. However, the direction of causality is left to be determined. The findings suggest as well that top performers in CSR have higher returns than their peers with a lower CSR performance. Notwithstanding, no evidence is found that firms with the worst CSR performance are linked with worse financial results. Finally, the results indicate that the three pillars of ESG (Environmental, Social and Corporate Governance) have different significant relationships with firm value and financial performance. Environmental performance depicts a negative correlation with firm value and financial results, while Social and Corporate Governance performance are positively linked with the corporate financial performance indicators and with firm value.A presente tese investiga a relação entre o desempenho em termos de responsabilidade social corporativa (RSC) de uma empresa e o desempenho financeiro da mesma num contexto Europeu. Para avaliar esta relação, o desempenho em RSC é estimado por meio das pontuações ESG das empresas, o desempenho financeiro é representado pelos índices de Retorno sobre Ativos e de Retorno sobre Capital Próprio, e o rácio de Tobin’s Q é usado como um proxy para o valor da empresa. Há evidências de que o desempenho em RSC e o desempenho/valor financeiro das empresas estão positivamente correlacionados. No entanto, a direção da causalidade é deixada por ser determinada. Os resultados sugerem ainda que as empresas com melhores desempenhos em RSC estão positivamente associadas a retornos mais elevados do que os seus pares com um desempenho em RSC menor. Não obstante, nenhuma evidência é encontrada de que empresas com o pior desempenho em RSE estão ligadas a resultados financeiros piores. Por fim, os resultados indicam que os três pilares de ESG (Ambiental, Social e Governança Corporativa) têm diferentes relações significativas com o valor da empresa e com o desempenho financeiro. O desempenho ambiental apresenta uma correlação negativa com o valor da empresa e com resultados financeiros, enquanto o desempenho da Governança Corporativa e Social está positivamente ligado aos indicadores de desempenho financeiro corporativo e ao valor da empresa.
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Amaral, José Maria Botelho Moniz Parreira do. "Is doing good, good for you? : the relationship between financial distress and CSR : a study on southern europe." Master's thesis, 2019. http://hdl.handle.net/10400.14/29849.
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In this dissertation, we study the relationship between Corporate Social Responsibility (CSR) performance and Financial Distress, between 2007 and 2017 in a Southern European context. In order to assess this association, ESG (Environmental, Social and Governance) Scores are used as proxies for CSR performance, while three different measures are employed in representation of Financial Distress levels, including Altman-Z Score. Based on sample of 115 publicly listed Southern European companies we find that firms with higher levels of positive CSR performance are less likely to fall into situations of Financial Distress. In addition, the results also remain robust after mitigating endogeneity through the use of the instrumental variable technique. Finally, the results evidence that three dimensions of ESG (Environmental, Social and Corporate Governance) have similar significant relationships with Financial Distress. Environmental and Corporate Governance performance are negatively linked with Financial Distress, however the contradictory results for Social Performance indicate that is not possible to establish a well-defined relationship between this ESG dimension and Financial Distress. In our context, we are able to conduct an investigation in a European region known for experiencing high levels of Financial Distress but also low levels of Corporate Social Responsibility, when compared with other European regions.Nesta dissertação, estudamos a relação entre o desempenho da Responsabilidade Social Empresarial (RSE) e as Dificuldades Financeiras, entre 2007 e 2017 em um contexto Sul Europeu. Para avaliar esta associação as pontuações de ESG (Ambiental, Social e Governança Corporativa) são utilizados como representativos para o desempenho da RSE, enquanto três medidas diferentes são empregadas em representação dos níveis de Dificuldades Financeiras, incluindo o Altman-Z Score. Com base em uma amostra de 115 empresas Sul Europeias listadas publicamente, descobrimos que empresas com níveis mais altos de desempenho positivo em RSE têm menor probabilidade de cair em situações de Dificuldades Financeiras. Adicionalmente, os resultados permanecem robustos após mitigar a endogeneidade através do uso da técnica da variável instrumental. Por fim, os resultados evidenciam que as três dimensões de ESG revelam relações significativas semelhantes com as Dificuldades Financeiras. O desempenho Ambiental e o da Governança Corporativa estão negativamente relacionados com as Dificuldades Financeiras, porém os resultados contraditórios do desempenho Social indicam que não é possível estabelecer uma relação bem definida entre esta dimensão de ESG e as Dificuldades Financeiras. Neste contexto, somos capazes de realizar uma investigação em uma região Europeia, conhecida por altos níveis de Dificuldades Financeiras, como também, baixos níveis de Responsabilidade Social Empresarial, quando comparada com outras regiões europeias.
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Castenholz, Anna Maria. "The effect of positive CSR engagement on firm’s financial distress risk in Europe." Master's thesis, 2021. http://hdl.handle.net/10400.14/35341.
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This study examines the influence of Corporate Social Responsibility on the financial distress risk of a company. The Environmental, Social and Governance (ESG) factors are employed as a proxy for CSR, while three different measures are applied to assess financial distress levels, namely Altman‘s Z-Score, Ohlson’s O-Score and Shumway’s Hazard Model. After analyzing a European dataset of 1097 publicly listed firms covering the period from 2002-2018, the results suggest that positive CSR engagement reduces the likelihood of falling into costly financial distress, whilst the findings are even more profess for non-crisis periods as well as environmentally sensitive industries. The results are robust to differences in reporting dates, prior levels of financial distress and reverse causality. Collectively, the findings are in line with the stakeholder view of CSR, suggesting that improving firm-stakeholder relationships decreases a firm’s financial distress risk.Este estudo examina a influência da Responsabilidade Social Corporativa (RSC) no risco de crise financeira de uma empresa. Os fatores ambientais, sociais e de governação (ESG) são utilizados como substitutos para a RSC, enquanto três medidas diferentes são aplicadas para avaliar os níveis de dificuldades financeiras, nomeadamente o Z-Score da Altman, o O-Score da Ohlson e o Modelo de Risco de Shumway. Após análise de um conjunto de dados europeu de 1097 empresas cotadas na bolsa, abrangendo o período de 2002-2018, os resultados sugerem que o envolvimento positivo em termos de RSC reduz a probabilidade de cair em situações de dificuldades financeiras dispendiosas, enquanto que os resultados são ainda mais professos para períodos que não sejam de crise, bem como para indústrias sensíveis do ponto de vista ambiental. Os resultados são robustos às diferenças nas datas de notificação, níveis anteriores de dificuldades financeiras e causalidade inversa. Coletivamente, os resultados estão de acordo com a visão de RSC das partes interessadas, sugerindo que a melhoria das relações entre as partes interessadas diminui o risco de angústia financeira de uma empresa.
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Grileiro, Joana Rita Baleia. "Exploiting an investment opportunity based on ESG Score." Master's thesis, 2019. http://hdl.handle.net/10400.14/29054.
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The attitude of society towards the environment, good human and management practices is becoming more important and is therefore having a strong impact on the financial world. In this sense, there has been a broad discussion among investors about the topic when building their stock portfolios. Is it worth it to invest only in accordance with our values and principles? The empirical analysis consider returns of trading strategies built on company corporate social responsibility (CSR) as measured by Environmental, Social and Governance indicators (ESG) retrieved from the Thomson Reuters Datastream for the S&P 500 Index from 2002 to 2016. The results of the study point out that investors can increase their performance following a simple investment strategy based on ESG Score but in reverse. Using ESG Score as a starting point, an investor should buy the stocks with the lowest ESG Score and selling the stocks with the higher values. This trading strategy leads to high abnormal returns of up to 7,92% per year and an annualized Sharpe ratio of 1,06. Investors should adopt this trading strategy and invest in projects that encourage initiatives that meet their values and convictions.A crescente importância dada pela sociedade em relação ao meio ambiente, às boas práticas humanas e de gestão teve influência e um forte impacto no mundo financeiro. Nesse sentido, tem existido uma ampla discussão entre investidores sobre o tema aquando da construção do seu portfólio de ações. Valerá a pena investir apenas de acordo com os nossos valores e princípios? Na análise empírica, são considerados os retornos das estratégias de investimento, construídas com base em Corporate Social Responsability (CSR), medida pelo indicador Environment, Social, Governance (ESG) extraído da Thomson Reuters Datastream, para o Índice S&P 500, desde 2002 a 2016. Os resultados do estudo indicam que os investidores podem aumentar o seu desempenho seguindo uma estratégia de investimento simples baseada no ESG Score, mas em sentido inverso. Usando o ESG Score como ponto de partida, um investidor deve comprar as ações com o menor ESG Score e vender as ações com os valores mais altos. Esta estratégia permite obter retornos elevados de 7,92% anuais e um Sharpe ratio anualizado de 1,06. Os investidores devem adotar esta estratégia de negociação e com os retornos obtidos, investir em projetos que vão de encontro aos seus valores e convicções.
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Almeida, Margarida Grave de. "Impacto das características do conselho de administração na divulgação da responsabilidade social corporativa." Master's thesis, 2021. http://hdl.handle.net/10071/22905.
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O presente trabalho tem como objetivo analisar o impacto das caraterísticas do Conselho de
Administração ao nível da divulgação da responsabilidade social corporativa, baseando-se numa
amostra de 383 empresas britânicas cotadas na London Stock Exchange, entre 2014 e 2018. É
utilizado o modelo random effects, com a variável dependente Environmental, Social e
Governance (ESG) score de divulgação da responsabilidade social corporativa. As variáveis
independentes são potenciais características do Conselho de Administração, determinantes
para a performance da divulgação da responsabilidade social corporativa. Os resultados
encontrados fornecem evidências empíricas de um impacto positivo na divulgação da
responsabilidade social corporativa das seguintes características do Conselho de Administração:
competências específicas, divulgação da experiência profissional, presenças dos membros nas
reuniões, proporção de membros não-executivos, o CEO ser membro do Conselho de
Administração, diversidade de género, e independência do comité de auditoria. Os resultados
sugerem também que existem diferenças nas características do Conselho de Administração que
têm influência sobre os diferentes pilares ambiental, social e governance, da divulgação não
financeira individualmente. Foi demonstrado que empresas com melhor performance de
divulgação da responsabilidade social corporativa são mais influenciadas pela presença de
membros não-executivos no Conselho de Administração. Empresas com mais experiência são
mais influenciadas pela presença de membros não-executivos no Conselho de Administração,
por competências específicas dos membros do conselho e pela diversidade de género no
mesmo. Conclui-se que os resultados deste estudo, vão de encontro às teorias que dão base e
suporte à compreensão e explicação do comportamento da divulgação da responsabilidade
social corporativa.This study analyses the impact of board characteristics on corporate social responsibility disclosure, using a sample of 383 British companies listed on the London Stock Exchange between 2014 and 2018. A random effects model analysis is performed with the Environmental, Social e Governance (ESG) score of corporate social responsibility disclosure, as a dependent variable. The independent variables are potential board characteristics determinants for corporate social responsibility disclosure performance. The board of director’s characteristics that provide an empirical evidence of a positive impact on corporate social responsibility disclosure are: specific skills, professional experience disclosure, presence in board meetings, proportion of non-executive members, CEO as a member of the board, gender diversity, audit committee independence. Results also suggest that there are differences in board of director’s characteristics that influence the environmental, social and governance pillars individually of non-financial disclosure. It was demonstrated that the companies with the best performance in disclosing corporate social responsibility are also the ones which are the most influenced by the presence of non-executive members of the board. Experienced companies are the most influenced by the presence of non-executive members of the board, members specific skills and gender diversity. The study findings are in line with the theories that provide a basis for the understanding and explanation of the behavior of corporate social responsibility disclosure.
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Kreß, Tobias. "The F-score revisited - an application to ESG leaders in order to find abnormal return." Master's thesis, 2019. http://hdl.handle.net/10362/70655.
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The goal of this paper is to examine whether investors can create a more profitable investment strategy by further screening the extreme F-Score companies based on their ESG standards. When applied to the S&P 1200 global index between 2010 and 2018, the results reinforce the success of the pure F-Score strategy in separating ‘winning from losing’ companies. In addition, I find contracting results to the positive CSP-CFP relationship, especially with respect to the Social sub-component. Overall, I achieve the highest portfolio return by implementing an incongruent investment strategy, which forms yearly portfolios based on firms with the highest F-Score and lowest Social-Score. After risk-adjusting the portfolio returns by the Fama-French risk-factors, abnormal returns are achievable by holding portfolios that are composed out of either high F-Score firms, low ESG-Score firms or the combination of both (incongruent strategy). In conclusion, the evidence implies that financial markets do not completely incorporate historical financial and non-financial information into equity prices in a timely manner, advocating the mispricing explanation.
Book chapters on the topic "The social ESG-score"
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Borms, Samuel, Kris Boudt, Frederiek Van Holle, and Joeri Willems. "Semi-supervised Text Mining for Monitoring the News About the ESG Performance of Companies." In Data Science for Economics and Finance, 217–39. Cham: Springer International Publishing, 2021. http://dx.doi.org/10.1007/978-3-030-66891-4_10.
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AbstractWe present a general monitoring methodology to summarize news about predefined entities and topics into tractable time-varying indices. The approach embeds text mining techniques to transform news data into numerical data, which entails the querying and selection of relevant news articles and the construction of frequency- and sentiment-based indicators. Word embeddings are used to achieve maximally informative news selection and scoring. We apply the methodology from the viewpoint of a sustainable asset manager wanting to actively follow news covering environmental, social, and governance (ESG) aspects. In an empirical analysis, using a Dutch-written news corpus, we create news-based ESG signals for a large list of companies and compare these to scores from an external data provider. We find preliminary evidence of abnormal news dynamics leading up to downward score adjustments and of efficient portfolio screening.
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Aybars, Aslı, Levent Ataünal, and Ali Osman Gürbüz. "ESG and Financial Performance." In Advances in Business Strategy and Competitive Advantage, 520–36. IGI Global, 2019. http://dx.doi.org/10.4018/978-1-5225-7180-3.ch029.
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Non-financial information such as environmental, social, governance (ESG) issues is becoming as much important as financial data. This study investigated the empirical relationship between Thomson Reuters Environmental Social Governance (ESG) Combined Score and performance of S&P 500 firms with eleven years of data from between 2006 and 2016. The study confirmed unidirectional positive and significant relation between ESG Combined Score and ROA, suggesting that improvements in ESG score have positive impact on operating performance of the firm. Although simultaneous equation estimations by means of instrumental variables (IV) employing two-stage least squares (2SLS) and three-stage least squares (3SLS) confirmed the significant positive relation between ESG Combined Score and operational profitability (ROA); contrarily, Tobin's Q seemed to affect ESG score rather than the ESG score inducing Tobin's Q. Higher Tobin's Q seems to lead to a lower ESG score. In other words, firms with higher growth potential as denoted by a higher Tobin's Q, are found to be less sensitive to ESG issues.
Conference papers on the topic "The social ESG-score"
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Machmuddah, Zaky, and Ratna Wardhani. "Environmental Social Governance (ESG) Disclosure Score Rating of Bloomberg." In 1st International Conference on Science, Health, Economics, Education and Technology (ICoSHEET 2019). Paris, France: Atlantis Press, 2020. http://dx.doi.org/10.2991/ahsr.k.200723.011.
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Zumente, Ilze, Nataļja Lāce, and Jūlija Bistrova. "ESG disclosure patterns in the Baltics." In 11th International Scientific Conference „Business and Management 2020“. VGTU Technika, 2020. http://dx.doi.org/10.3846/bm.2020.484.
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The goal of this article is to provide evidence on the volume of ESG disclosures of 34 companies listed on the NASDAQ Baltic stock exchange. It provides a broad view of the non-financial disclosure thoroughness and offers conclusions on the key characteristics of the Baltic listed companies in terms of ESG. By performing content analysis of the publicly available reports based on 106 ESG criteria and statistical analysis of the retrieved data, the disclosure patterns across reporting dimensions, industries, and company characteristics are analyzed. Authors find a wide range (8% to 67%) ESG transparency scores with an average of 41%. On aggregate, governance and social dimensions are reported better (49% and 44%) than environmental (24%). Correlation analysis was performed to test the correlation between ESG and selected financial metrics revealing that the ESG disclosure score correlates with the firm’s market capitalization.