American vs. European comparison: What are the standards and practices to rank a firm according to the ESG Environmental criteria ?
Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
ESG scores and short in those with the lowest scores yields a significantly negative abnormal return. Interestingly, this is caused by the strong positive return of firms with the lowest ESG activity. ESG investing grew out of investment philosophies such as Socially Responsible Investing (SRI), but there are key differences. ESG investing and analysis, on the other hand, looks at finding value in companies—not simply at supporting a set of values.
2019). Numerous institutions, such as the Sustainable Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and CDP are working to form standards and define materiality to facilitate incorporation of these factors into the investment process.
firms, but not for European firms. Socially responsible investment may therefore be of varying attractiveness in different market phases.
Christina E. Bannier, Yannik Bofinger, Björn Rock. Doing safe by doing good : ESG investing and corporate social responsibility in the U.S. and Europe. Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 621. 2019
Lopez de Silanes, Florencio and McCahery, Joseph A. and Pudschedl, Paul C., ESG Performance and Disclosure: A Cross-Country Analysis (December 18, 2019). TILEC Discussion Paper No. DP2019-032;
Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. Daniel C. Esty, Andrew S. Winston, reprint, Yale University Press, 2006