Evaluating the determinants of environmental, social and governance (ESG) score is significant for topic for academics and regulators and companies. Despite its importance, little attention has been paid to non-financial strategy disclosure and how to communicate non-financial information. However, in the recent years, attention to the topic has considerably increased as demonstrated, in the European context, by the introduction of the non-financial reporting directive in 2014. Therefore, it is important to analyse how the quantity and quality of disclosure influence the ESG score. To explore this relationship, a configurational analysis aimed at 31 Italian listed companies was studied by fuzzy-set qualitative comparative analysis. The results showed that there were three path types driving the ESG score and that integrated reporting played a highly significant role in promoting a high ESG score. Specifically, we show the importance of assessing the combinations of quality and quantity disclosures for ESG score through configurational thinking. These results provide a first theoretical basis for the effectiveness of disclosure measurements on ESG score, charting the future direction for environmental management studies.
We offer early evidence on how negative interest rate policy affects bank risk-taking. We identify a dichotomy between monetary policy and prudential regulation. Our primary result suggests NIRP produced an unintended outcome, which we measure as a 10 per cent reduction in banks' holdings of risky assets. It infers that banks deleverage their balance sheets and invest in safer, liquid assets to meet new and binding capital and liquidity requirements. We find risk-taking behaviour is sensitive to capitalisation and banks with stronger capital ratios take more risks. Similarly, tighter prudential requirements could inadvertently retard economic growth should poorly capitalised banks reduce investment in riskier assets in favour of zero risk-weighted assets, such as, sovereign bonds to comply with risk-based capital requirements. Risk-taking is greater in less competitive markets because stronger market power insulates net interest margins and profitability. We obtain our results from a sample of 2,371 banks from 33 OECD countries between 2012 and 2016, and a difference-indifferences framework.
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