11th video

Question 1

Non-portfolio vs portfolio study? again .9

Answer 1

Non-portfolio study: is a firm study.

Portfolio studies (sometimes called investor): you evaluate whether risk and return characteristics of portfolios depend on ESG measures

Question 2

Split meta study idea?

Answer 2

Split is a subset of a sample, meta is examination of a few studies and making conclusions.

Question 3

Asset class evidence towards positive relation? ranking 3: equities, fixed income, real estate

Answer 3

1. real estate (green buildings)
2. Fixed income
3. equities

Question 4

Strongest relation to financial performance? .13

Answer 4

E second: 59%
S third: 55%
G is first: 62%

not statistically significant though

Question 5

Fact: financial performance more positively correlate with ESG in emerging than developed markets. possible explanation why?

Answer 5

65.4 % to 38 %

ESG is a stronger predictor of performance in emerging markets: because in developed markets standards are already super high. in emerging markets, there are more differences in governance for example.

Question 6

strong and weak point of meta studies?

Answer 6

positive: you can know what prior research has found,
negative: comparing different type period, different areas, publication bias (up until recently ‘no result/relationship’ conclusions were not published, but now they are)

Question 7

Corporate (non-portoflio) vs investor (portfolio) studies findings?.18

Answer 7

• Corporate studies: Evidence of better sustainability being associated with better financial performance
• Investors studies: Less evidence of a positive association between sustainability and financial performance

60% positive relationship by corporate studies

investor studies find more negative and no-association results

Question 8

stars meaning in graphs?

Answer 8

findings are statistically significant

no starts - no effect

Question 9

Most studies cannot address the issue of reverse causality. What does this mean? .22

Answer 9

Do companies perform financially because they are more sustainable?

or

Do companies perform in terms of sustainability because they perform better financially?

here causality vs correlation issue arises

Question 10

Treatment vs control experiment? .23

Answer 10

control is placebo. or nothing/constant

Question 11

quasi experiment?

Answer 11

Real-life settings which are similar to a proper experiment.

Question 12

Shareholder proposals?

Answer 12

Shareholder proposals: Proposals submitted by shareholders for a vote at the company’s annual meeting. Typically, such proposals are opposed by the corporation’s management, hence the insistence for a vote.

Focus on “close-call” shareholder resolutions:
* “Close-call” resolutions are resolutions that pass or fail by a small margin of votes at the annual meetings. (E.g., fail with 49% of the vote pass 51% of the vote)

–Average daily stock price reaction for proposals that just fail: approximately -0.5%
–Average daily stock price reaction for proposals that just pass: between 0.75 and 1.5%.