Do ESG Investments Mitigate ESG Controversies? Evidence From International Data

Paola Brighi (), Antonio Carlo Francesco Della Bina and Valeria Venturelli ()

Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) from Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi"

Abstract: Using an extensive international dataset based on Thomson Reuters environmental, social, and corporate governance (ESG) scores and controversies for an average of 7,175 companies in the period 2002–2018, this paper contributes to investigate how controversies may negatively affect market firm value and risk. This result can, however, be reversed in the case firms take advantage of high ESG scoring. In terms of policy implications findings suggest that controlling for ESG is important not only from a macro sustainability point of view but also from the individual firm perspective. Results are confirmed in the case of each single E, S and G pillars even though the social and governance dimension are statistically more significant in terms of controversies mitigation effects.

Keywords: ESG scoring; Controversy; Risk; Performance; Moderating effect. (search for similar items in EconPapers)
JEL-codes: G30 M14 Q56 (search for similar items in EconPapers)
Pages: pages 40
Date: 2022-03
New Economics Papers: this item is included in nep-ban and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mod:wcefin:0084

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