ESG has emerged as a key non-financial indicator, drawing significant investor focus. Disparities in ESG ratings may skew investor perceptions, potentially endangering stock values and financial market stability. This paper examines the link between...
This study addresses the relationship between the (dis)aggregated ESG rating and different types of risk (i.e., market risk, idiosyncratic risk, total risk) in the German stock market. We investigate not only the overall ESG rating and the E, S, and...
This study delves deeply into the multifaceted nature of investor value creation, focusing on financial health, growth, profitability, cash flow, and ESG (environmental, social, and governance) risk ratings. The research employs partial least squares...
This paper explores whether the high or low ESG rating of a company is related to the level of its implied tail risk, measured on the basis of derivative data by implied skewness and implied kurtosis. Previous research suggests that the ESG rating of...
Integrated Reporting (IR) has gained prominence as a comprehensive approach to corporate disclosure, yet theoretical clarity is still developing regarding how governance mechanisms shape IR quality and its relation to ESG risk ratings. Addressing thi...
As environmental, social, and governance (ESG) issues become increasingly important, ESG ratings have become a significant factor influencing audit fees for businesses. However, ESG ratings are typically assessed by multiple agencies or rating firms...
The evaluation of environmental, social and governance (ESG) risks is an important yet challenging aspect of the investor decision-making process, largely attributable to the volatility of this domain. A significant proportion of these challenges ari...
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...
Over the last two decades, there has been an increased attention to and awareness of corporate environmental, social, and governance (ESG) responsibilities. The asset allocation process has changed accordingly to consider these ESG responsibilities,...
We evaluate the environment, society, and corporate governance rating (ESG rating) contribution from a new perspective; the highest ESG rating mitigates the impact of unexpected change in the implied volatility on the systemic stock market risk. For...
Environmental, Social, and Governance (ESG) ratings are widely used for investment and regulatory decision-making, yet they often suffer from symbolic compliance and information asymmetry. To address these limitations, this study introduces a hybrid...
Environmental, social and governance (ESG) ratings (scores) provide quantitative measures for socially responsible investment. We consider ESG scores to be a third independent variable—on par with financial risk and return—and incorporate such numeri...
The global economy was profoundly impacted by the emergence of the COVID-19 pandemic, with the hotel industry being among the sectors most severely affected. This study explores the relationship between environmental, social, and governance (ESG) per...
There are diverging results in the literature on whether engaging in ESG related activities increases or decreases the financial and systemic risks of firms. In this study, we explore whether maintaining higher ESG ratings reduces the systemic risks...
Portfolios incorporating environmental, social, and governance (ESG) criteria present distinct, unobserved risks, the empirical quantification of which has proven challenging. This difficulty stems from sustainable investment strategies being guided...
The study examines the return performance and resilience to market volatility of the recently introduced environment, social/sustainable, and governance (ESG) weight-tilted Hang Seng index compared to its parent, the Hang Seng index. The ESG-infused...
In light of the growing interest in sustainable finance among investors and academics, in this study, we present an empirical analysis designed to understand whether sustainable investments outperform, underperform, or perform neutrally relative to c...
A growing world population, changing consumption patterns and climate change are affecting water demands, water scarcity and water quality worldwide, while at present, few companies are incorporating good water stewardship. In order to create awarene...
We propose a multi-objective approach for portfolio selection, which allows investors to consider not only return and downside risk criteria but also to include environmental, social and governance (ESG) scores in the investment decision-making proce...
In volatile economic environments, corporate resilience is a prerequisite for sustainable development. This study explores the non-linear impact of controversial events on corporate resilience using a sample of 4430 listed Chinese firms from 2018 to...
We examine the risk–return tradeoff of a portfolio of firms that have tangible environmental, social, and governance (ESG) attributes. We introduce a new type of penalized regression using the Mahalanobis distance-based method and show its usef...
The study was conducted on a sample of 60 of the world’s biggest banks financing the largest fossil fuel entities. The aim is to identify the determinants of ESG ratings of these banks and to determine how relevant their actual credit and inves...
This study analyzes how environmental, social and governance (ESG) factors affect the valuation of listed companies in Central Europe. It therefore validates the financial incentives for corporates in this region to embark on or continue with sustain...
This study investigates the ESG performance–systemic risk (SR) nexus among Indian companies. Using the beta coefficient from the Capital Asset Pricing Model (CAPM) and statistical analysis, it explores how ESG performance affects SR. The findin...
In the globalized economic system, environmental, social, and governance (ESG) factors have emerged as critical dimensions for assessing non-financial performance and ensuring the long-term sustainable development of businesses, influencing corporate...
The impact of Environmental, Social, and Governance (ESG) scores on financial performance remains a subject of debate, as the literature reports mixed evidence regarding their effect on stock returns. This research aims to examine the relationship be...
15 October 2021
Despite a huge body of literature revealing that the effect of environmental, social and governance (ESG) scores on a firms’ financial performance and value, it lacks the empirical research on the nexus between corporate sustainable growth and ESG ri...
This study analyzes the relationship between Environmental, Social and Governance (ESG) scores and bond returns using the corporate bond data in Korea during the period of 2010 to 2015. We find that ESG scores include valuable information about the d...
Environmental, Social and Governance (ESG) rating agencies have been instrumental in mainstreaming sustainability in the investment industry. Traditionally, they have relied on company disclosure and human analysis to produce their ratings. More rece...
The present paper investigates the relationship between stock prices, credit ratings, and ESG scores for banks internationally. First, it describes stock prices and ESG scores at an annual frequency, as well as stock price and credit risk at a daily...
ESG ratings are data-driven indices, focused on three key pillars (Environmental, Social, and Governance), which are used by investors in order to evaluate companies and countries, in terms of Sustainability. A reasonable question which arises is how...
In recent years, corporate ESG performance has been widely incorporated into investment decisions and capital allocation considerations, becoming a focal point and hot topic for research by governments and organizations worldwide. However, due to var...
As global attention to sustainable development grows, the role of Environmental, Social, and Governance (ESG) practices is becoming increasingly prominent across various industries, particularly in export-oriented sectors. This paper examines the imp...
Results of studies have varied significantly regarding the effect of ESG investment on firm value. This paper weighs in on this issue by analyzing how changes in ESG scores impact excess stock market returns (alpha) and risk-adjusted returns (Sharpe...
While prior research has established direct relationships between strategic risk integration and ESG performance in banking, critical gaps remain in understanding the transformation mechanisms, particularly in emerging markets. This study investigate...
The ambiguous evidence regarding the linkages between firm size and ESG risk in the relevant literature justifies the need for their further scientific investigation. A particularly interesting context for this task is offered by the banking industry...
This research examines the link between environmental, social, and governance (ESG) risk ratings and board characteristics on corporate performance. Using 2023 data from 117 companies on the Saudi Stock Exchange, the study employs Ordinary Least Squa...
Green finance has emerged as a critical driver of sustainable development for the banking industry. Engaging employees is essential for the successful implementation of green finance initiatives. This study aims to examine the employee engagement str...
In the context of the growing prominence of socially responsible investment, the debate over whether sustainable corporate practices translate into sustained shareholder value has intensified. As a key tool for aligning their investment portfolios wi...
Environmental, social, and governance (ESG) ratings are gaining momentum in China, but their capacity to induce green innovation among heavy polluters remains to be proven. Based on the green patent data from listed heavy-polluting enterprises in Chi...
The effects of greenwashing as a corporate strategy on firm risk are not well defined. I construct a greenwashing measure for 3973 companies from 70 countries from 2012 to 2022. Using Dynamic Panel Modeling, I find results suggesting that greenwashin...
Integrating Environmental, Social, and Governance (ESG) metrics into supply chain finance is critical for promoting sustainable development. However, the dynamic mechanisms through which real-time ESG performance influences credit allocation and, con...
The prevailing view is that ESG performance contributes to corporate financial stability, particularly regarding long-term sustainability objectives. However, there is a notable lack of critical research exploring its short-term financial effects, es...
The recent debate on Environmental, Social, and Governance (ESG) factors has focused primarily on financial decision making and risk management from the perspectives of developed economies. However, in most developing countries, ESG risk models for m...
This study examines the relationship between environmental, social, and governance (ESG) scores and credit ratings across regions and industrial sectors using a dataset of 188 companies from Europe and the US (2013–2023). Employing ordered prob...
This study examines the degree of alignment between the actual environmental performance and the ESG disclosures of 365 listed financial institutions in Europe for the fiscal year 2024. Although ESG reporting has become a standard practice in the fin...
The aim of this study was to examine the impact of environmental, social, and governance (ESG) measures on credit ratings given to non-financial institutions by the largest credit rating agencies according to economic sector divisions. The hypotheses...
We investigated the financial performance of a sample of sustainable investment funds in terms of returns, volatility, and contagion risk during the financial crisis caused by the COVID-19 pandemic. In order to conduct a more reliable analysis, we co...
Firm value reflects a company’s market competitiveness, while ESG controversies indicate its ESG risks. This study aims to examine the impact of ESG controversies on firm value and its underlying mechanisms. Using a panel dataset of 851 non-fin...
Rating agencies that assess a company’s environmental, social, and corporate governance (ESG) impact have been subject to public and academic scrutiny due to divergent and often biased rating outcomes. Concurrently, an evolving regulatory envir...
of 2