44,582 research outputs found
Rating the Raters: Evaluating how ESG Rating Agencies Integrate Sustainability Principles
Environmental, social, and governance (ESG) rating agencies, acting as relevant financial market actors, should take a stand on working towards achieving a more sustainable development. In this context, the objective of this paper is, on the one hand, to understand how criteria used by ESG rating agencies in their assessment processes have evolved over the last ten years and, on the other hand, to analyze whether ESG rating agencies are contributing to fostering sustainable development by the inclusion of sustainability principles into their assessment processes and practices according to the ESG criteria. This research is based on a comparative descriptive analysis of the public information provided by the most representative ESG rating and information provider agencies in the financial market in two periods: 2008 and 2018. The findings show that ESG rating agencies have integrated new criteria into their assessment models to measure corporate performance more accurately and robustly in order to respond to new global challenges. However, a deep analysis of the criteria also shows that ESG rating agencies do not fully integrate sustainability principles into the corporate sustainability assessment process
Fund Characteristics and Performances of Socially Responsible Mutual Funds: Do ESG Ratings Play a Role?
This paper examines the risk-adjusted performance and differential fund flows
for socially responsible mutual funds (SRMF). The results show that SRMF rated
high on ESG, perform better than lower rated ESG funds during the period of
economic crisis. The findings also show that low ESG rated SRMF had higher
differential cash-flows than high rated ESG funds except for the period of
economic down turn. The findings are of interest to financial advisors,
investors, mutual fund managers, and researchers on how SRMF performance
responds to periods of economic downturn and expansionComment: Forthcoming in the Journal of Accounting and Financ
Environmental, social and governance disclosures in Europe
Purpose
â The purpose of this paper is to shed light on the European Unionâs (EU) latest regulatory principles for environmental, social and governance (ESG) disclosures. It explains how some of the EUâs member states are ratifying the EU Commissionâs directives on ESG reporting by introducing intelligent, substantive and reflexive regulations.
Design/methodology/approach
â Following a review of EU publications and relevant theoretical underpinnings, this paper reports on the EU member statesâ national policies for ESG reporting and disclosures.
Findings
â The EU has recently revised a number of tools and instruments for the reporting of financial and non-financial information, including the EUâs modernisation directive, the EUâs directive on the disclosure of non-financial and diversity information, the EU Energy Efficiency Directive, the European pollutant release and transfer register, the EU emission trading scheme, the integrated pollution prevention and control directive, among others.
Practical implications
â Although all member states are transposing these new EU directives, to date, there are no specific requirements in relation to the type of non-financial indicators that can be included in annual reports. Moreover, there is a need for further empirical evidence that analyse how these regulations may (or may not) affect government entities and big corporations.
Social implications
â Several EU countries are integrating reporting frameworks that require the engagement of relevant stakeholders (including shareholders) to foster a constructive environment that may lead to continuous improvements in ESG disclosures.
Originality/value
â EU countries are opting for a mix of voluntary and mandatory measures that improve ESG disclosures in their respective jurisdictions. This contribution indicates that there is scope for national governments to give further guidance to civil society and corporate business to comply with the latest EU developments in ESG reporting. When European entities respond to regulatory pressures, they are also addressing ESG and economic deficits for the benefit of all stakeholders.peer-reviewe
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Is ESG commitment linked to investment performance in the real estate sector?
The linkage between corporate commitment to environmental, social and governance (ESG) issues and investment performance has generated a substantial body of research outside the real estate sector. Nevertheless, the relationship between the environmental performance and financial performance of companies is still not well understood as studies have found mixed and contradicting results. Drawing upon the KLD database which contains ratings on seven ESG dimensions from 2003-2009, this paper investigates the relationship between the ESG rating and the financial performance of a sample of US real estate firms. Since the primary transmission channel from ESG activities to financial performance may be better reflected by a firm's intangible assets, we model both Tobin's q and the total annual return in a panel framework with time and sector specific fixed effects. Our results are largely consistent with the existing literature finding a positive relationship between CFP and CSP. Further, the time scale of the lagged effects seems plausible
ESG: Extended Similarity Group method for automated protein function prediction
We present here the Extended Similarity Group (ESG) method, which annotates query sequences with Gene Ontology (GO) terms by assigning probability to each annotation computed based on iterative PSI-BLAST searches. Conventionally sequence homology based function annotation methods, such as BLAST, retrieve function information from top hits with a significant score (E-values). In contrast, the PFP method, which we have presented previously, goes one step ahead in utilizing a PSI-BLAST result by considering very weak hits even an E-value of up to 100 and also by incorporating the functional association between GO terms (FAM matrix) computed using term co-occurrence frequencies in the UniProt database. PFP is very successful which is evidenced by the top rank in the function prediction category in CASP7 competition. Our new approach, ESG method, further improves the accuracy of PFP by essentially employing PFP in an iterative fashion. An advantage of ESG is that it is built in a rigorous statistical framework: Unlike PFP method that assigns a weighted score to each GO term, ESG assigns a probability based on weights computed using the E-value of each hit sequence on the path between the original query sequence and the current hit sequence
Is ESG Commitment Linked to Investment Performance in the Real Estate Sector?
The linkage between corporate commitment to environmental, social and governance (ESG) issues and investment performance has generated a substantial body of research outside the real estate sector. Nevertheless, the relationship between the environmental performance and financial performance of companies is still not well understood as studies have found mixed and contradicting results. Drawing upon the KLD database which contains ratings on seven ESG dimensions from 2003-2009, this paper investigates the relationship between the ESG rating and the financial performance of a sample of US real estate firms. Since the primary transmission channel from ESG activities to financial performance may be better reflected by a firm's intangible assets, we model both Tobin's q and the total annual return in a panel framework with time and sector specific fixed effects. Our results are largely consistent with the existing literature finding a positive relationship between CFP and CSP. Further, the time scale of the lagged effects seems plausible.Corporate Social Responsibility, Green Buildings, Financial Performance
The state of sustainable investments in key emerging markets: synthesis report
The report is intended as a summary and synthesis of country reports on the state of sustainable investing in key emerging markets, namely China, India, Brazil and Turkey. In general, the authors have defined sustainable investments as investments that incorporate environmental (E), social(S) and governance (G) factors into the investment processes. The reports primarily investigate sustainable investments through the supply of financial capital to publicly listed firms in the form of equity investments through the stock markets, using strategies that incorporate environmental, social, and governance (ESG) risks into the investment process, with a long-term perspective. These investments can be purposefully ESG-inclusive and marketed as such (theme-based or labelled), or they can include ESG factors somehow in the processes without explicitly referring to sustainability-related factors.
The reports also consider the supply of financial capital in various classes and forms to listed and privately held firms with a consideration of the investmentâs impact on economic and social development or on investorsâ values
From SRI to ESG: The Changing World of Responsible Investing
The terms socially-responsible investing (SRI), mission-related investing, impact investing and environmental, social and governance (ESG) investing -- all frequently grouped under the heading of responsible investing -- have become a familiar part of the vocabulary of institutional and retail investors. Just what these terms mean in practice, however, and how their practitioners' claims can be impartially assessed, has been less clear. Responsible investing can be broken into three main categories: Socially-responsible investing (SRI) A portfolio construction process that attempts to avoid investments in certain stocks or industries through negative screening according to defined ethical guidelines. Impact investing Investing in projects, companies, fund or organizations with the express goal of generating and measuring effecting mission-related social, environmental or economic change alongside financial returns. Environmental, social and governance (ESG) investing Integrating the three ESG factors into fundamental investment analysis to the extent that they are material to investment performance. While these terms may all be gathered under the term responsible investing, these approaches serve very different purposes. SRI and impact investing use funding and investment activities to express institutional values or advance the institution's mission. In contrast, ESG investing aims to improve investment performance, thereby making additional resources available for mission support. For a long time, SRI was by far the most widely-used of the three approaches. In recent years, however, it has been argued that, although negative screening can be a useful tool for institutions desiring to express ethical, religious or moral values through their investment portfolio, for many it may prove too restrictive. ESG analysis, on the other hand, takes a broader view, examining whether environmental, social and governance issues may be material to a company's performance, and therefore to the investment performance of a long-term portfolio. Thus, while not every institution will choose to engage in SRI or impact investing, fiduciaries of long-term institutional investors should seek to develop a well-reasoned view on their institution's approach to ES
Equational reasoning with context-free families of string diagrams
String diagrams provide an intuitive language for expressing networks of
interacting processes graphically. A discrete representation of string
diagrams, called string graphs, allows for mechanised equational reasoning by
double-pushout rewriting. However, one often wishes to express not just single
equations, but entire families of equations between diagrams of arbitrary size.
To do this we define a class of context-free grammars, called B-ESG grammars,
that are suitable for defining entire families of string graphs, and crucially,
of string graph rewrite rules. We show that the language-membership and
match-enumeration problems are decidable for these grammars, and hence that
there is an algorithm for rewriting string graphs according to B-ESG rewrite
patterns. We also show that it is possible to reason at the level of grammars
by providing a simple method for transforming a grammar by string graph
rewriting, and showing admissibility of the induced B-ESG rewrite pattern.Comment: International Conference on Graph Transformation, ICGT 2015. The
final publication is available at Springer via
http://dx.doi.org/10.1007/978-3-319-21145-9_
Count me out: The challenges of environmental, social and governance risks in making investment decisions
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