Does Socially Responsible Investing Change Firm Behavior?

Heath, Davidson; Macciocchi, Daniele; Michaely, Roni; Ringgenberg, Matthew C.

doi:10.1093/rof/rfad002

Cited by 56 publications

(13 citation statements)

References 23 publications

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“…Di Giuli et al (2022) find that investors' propensity to vote for climate proposals after experiencing hot temperatures is higher at firms with more overall climate change exposure. Heath et al (2022) find that socially responsible investment (SRI) funds invest less in firms with higher overall climate change exposure. Our keyword dictionary is used by Hail, Kim, and Zhang (2021).…”

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confidence: 97%

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Firm‐Level Climate Change Exposure

Sautner¹,

Lent²,

Vilkov³

et al. 2023

The Journal of Finance

333

134

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We develop a method that identifies the attention paid by earnings call participants to firms' climate change exposures. The method adapts a machine learning keyword discovery algorithm and captures exposures related to opportunity, physical, and regulatory shocks associated with climate change. The measures are available for more than 10,000 firms from 34 countries between 2002 and 2020. We show that the measures are useful in predicting important real outcomes related to the net-zero transition, in particular, job creation in disruptive green technologies and green patenting, and that they contain information that is priced in options and equity markets. CLIMATE CHANGE WILL PROFOUNDLY AFFECT the way business is conducted. Scientists have developed complex models that estimate the effect of greenhouse gas emissions on the global climate. At the same time, however, little

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confidence: 97%

“…Heath et al. (2022) find that socially responsible investment (SRI) funds invest less in firms with higher overall climate change exposure. Our keyword dictionary is used by Hail, Kim, and Zhang (2021).…”

mentioning

confidence: 99%

Firm‐Level Climate Change Exposure

Sautner¹,

Lent²,

Vilkov³

et al. 2023

The Journal of Finance

333

134

View full text Add to dashboard Cite

show abstract

“…Recent social movements have generated a renewed emphasis on promoting diverse and inclusive workplaces. For example, institutional investors have increased their investments in firms that demonstrate a commitment to diversity (Heath et al [2021], Taylor [2021]). Regulators also increasingly require firms to describe the extent to which their culture is diverse and inclusive (Vaseghi, Marcogliese, and Bieber [2020]).…”

Section: Introductionmentioning

confidence: 99%

Do Jobseekers Value Diversity Information? Evidence from a Field Experiment and Human Capital Disclosures

Choi¹,

Pacelli²,

Rennekamp

et al. 2023

J of Accounting Research

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We examine how information about the diversity of a potential employer's workforce affects individuals’ job‐seeking behavior. We embed a field experiment in job recommendation emails from a leading career advice agency in the United States. The experimental treatment involves highlighting a diversity metric to jobseekers. Our results indicate that disclosing diversity scores in job postings leads jobseekers to click on firms with higher diversity scores, with such effects varying across jobseeker demographics. A follow‐up survey provides evidence on potential explanations for why jobseekers value diversity information. We then examine how jobseekers’ preferences for diversity relate to disclosure choices under the U.S. SEC Human Capital Disclosure requirement. We find that firms in industries characterized by higher jobseeker responsiveness to diversity information tend to voluntarily disclose diversity metrics in their 10‐Ks under these new disclosure requirements.

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“…We then look at regions with a large number of firms held by one or more socially responsible investors (as a proxy for pro‐stakeholder preferences (Heath et al. [2021])) and regions with a high rate of union membership (as a proxy for firms' pro‐employee incentives). We find stronger results when firms have pro‐stakeholder preferences, and a slightly larger magnitude when firms have pro‐employee incentives.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Firms' Information Exposure on Safeguarding Employee Health: Evidence from COVID‐19

Liu

Lu²

2023

J of Accounting Research

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We show that information exposure through international business networks enables firms to take proactive measures that benefit employees and potentially the local community. Specifically, in the early days of COVID‐19, firms that have business networks with China and Italy are more likely to be aware of the severity of the disease, and proactively implement work‐from‐home (“WFH”) policies that can protect their employees. Using Safegraph foot traffic data, we find a higher stay‐at‐home ratio before local governments impose lockdowns in zip codes where firms have a larger information exposure. These areas are also associated with a lower spread of COVID‐19. Our main findings are more pronounced when local governments face constraints in quickly responding to COVID‐19 and when firms have a higher WFH capability or have more investors with socially responsible preferences. Collectively, we present evidence on the role of private corporations in mitigating the negative effects of a public health crisis before government intervention.

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Does Socially Responsible Investing Change Firm Behavior?

Cited by 56 publications

References 23 publications

Firm‐Level Climate Change Exposure

Firm‐Level Climate Change Exposure

Do Jobseekers Value Diversity Information? Evidence from a Field Experiment and Human Capital Disclosures

The Effect of Firms' Information Exposure on Safeguarding Employee Health: Evidence from COVID‐19

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