ESG
The Fight for the Purpose of the Firm
The following is an excerpt from Kyle Edward Williams' new book, "Taming the Octopus: The Long Battle for the Soul of the Corporation," now out at W. W. Norton & Company.
Did the Meme Stock Revolution Actually Change Anything?
Many financial commentators thought that the surge of retail investors participating in the stock market, the most notable of whom boosted “meme stocks” like GameStop, would democratize corporate governance and improve prosocial firm behavior, including the promotion of environmental, social, and governance (ESG) goals. In new research, Dhruv Aggarwal, Albert H. Choi, and Yoon-Ho Alex Lee find evidence that the exact opposite took place.
Market Competition Hurts Firm’s ESG Performance
New research by Vesa Pursiainen, Hanwen Sun and Yue Xiang finds that competition hurts corporate incentives to fulfill environmental, social, and governance (ESG) goals. Firms facing more competitive pressure have worse ESG scores, in particular when the firms have short-term-oriented shareholders. However, firms located in areas that are more concerned about climate change appear more willing to sacrifice profits for better ESG performance.
CEOs Have Real Incentives To Promote ESG
In new research, Michal Barzuza, Quinn Curtis, and David Webber create a framework explaining why CEOs have powerful incentives to promote ESG, why these incentives are distinct from those of shareholders, why they are powerful despite the lack of governance mechanisms, and why they are at times excessive or skewed.
Event Notes: Is Corporate ESG “Woke” Capitalism?
The Stigler Center for the Study of the Economy and the State hosted with the Rustandy Center for Social Sector Innovation, in partnership with the Financial Times, a virtual event discussing whether corporate ESG policies puts politics before shareholder and stakeholders' best interests or looks out for their long term best interests, with Marianne Bertrand, Jay Clayton and Damien Dwin. The following is a transcript of the event.
Anti-ESG Legislation is Demonstrating the Peril of Meddling in Markets
Anti-ESG rhetoric from conservative states conflates valid financial evaluations of company and industry prospects with the ideological values of political opponents. Politicians that pass legislation preventing businesses and state agencies from working with financial services with ESG standards will only harm their constituents. Instead, states should encourage competition and variety in financial services, writes Jennifer J. Schulp.
Corporate Political Responsibility in a Captured Economy
Most attention on corporate governance has focused on businesses’ social responsibility. Claudine Schneider and Ed Dolan write that businesses need to take into account...
History Shows that Voluntary ESG Standards Lead to a More Focused ESG Disclosure
In recent years, ESG reports have become more common for publicly traded companies. However, critics have found the information they provide to be inconsistent...
Capitalism Does Not Require a Tradeoff Between Planet and Profit
Critics of capitalism claim that the economic system incorrigibly encourages the exploitation of the planet and is thus incompatible with efforts to mitigate climate...
Event Notes: Whose Business is Health?
On Oct.14, the Hopkins Business of Health Initiative hosted a panel discussing if and how companies should consider the health implications of their products....
