ESG shareholder engagement and downside risk
We show that engagement on environmental, social, and governance issues can benefit shareholders by reducing firms’ downside risks. We find that the risk reductions (measured using value at risk [VaR] and lower partial moments) vary across engagement types and success rates. Engagement is most effec...
| Main Authors: | , , , , |
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| Format: | Journal article |
| Language: | English |
| Published: |
Oxford University Press
2023
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| _version_ | 1811139614751064064 |
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| author | Hoepner, AGF Oikonomou, I Sautner, Z Starks, LT Zhou, XY |
| author_facet | Hoepner, AGF Oikonomou, I Sautner, Z Starks, LT Zhou, XY |
| author_sort | Hoepner, AGF |
| collection | OXFORD |
| description | We show that engagement on environmental, social, and governance issues can benefit shareholders by reducing firms’ downside risks. We find that the risk reductions (measured using value at risk [VaR] and lower partial moments) vary across engagement types and success rates. Engagement is most effective in lowering downside risk when addressing environmental topics (primarily climate change). Further, targets with large downside risk reductions exhibit a decrease in environmental incidents after the engagement. We estimate that the VaR of engagement targets decreases by 9 percent of the standard deviation after successful engagements, relative to control firms. |
| first_indexed | 2024-03-07T08:26:09Z |
| format | Journal article |
| id | oxford-uuid:6728139a-9a5e-4d7a-af18-b36245d67a0c |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-09-25T04:08:53Z |
| publishDate | 2023 |
| publisher | Oxford University Press |
| record_format | dspace |
| spelling | oxford-uuid:6728139a-9a5e-4d7a-af18-b36245d67a0c2024-06-07T10:05:00ZESG shareholder engagement and downside riskJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:6728139a-9a5e-4d7a-af18-b36245d67a0cEnglishSymplectic ElementsOxford University Press2023Hoepner, AGFOikonomou, ISautner, ZStarks, LTZhou, XYWe show that engagement on environmental, social, and governance issues can benefit shareholders by reducing firms’ downside risks. We find that the risk reductions (measured using value at risk [VaR] and lower partial moments) vary across engagement types and success rates. Engagement is most effective in lowering downside risk when addressing environmental topics (primarily climate change). Further, targets with large downside risk reductions exhibit a decrease in environmental incidents after the engagement. We estimate that the VaR of engagement targets decreases by 9 percent of the standard deviation after successful engagements, relative to control firms. |
| spellingShingle | Hoepner, AGF Oikonomou, I Sautner, Z Starks, LT Zhou, XY ESG shareholder engagement and downside risk |
| title | ESG shareholder engagement and downside risk |
| title_full | ESG shareholder engagement and downside risk |
| title_fullStr | ESG shareholder engagement and downside risk |
| title_full_unstemmed | ESG shareholder engagement and downside risk |
| title_short | ESG shareholder engagement and downside risk |
| title_sort | esg shareholder engagement and downside risk |
| work_keys_str_mv | AT hoepneragf esgshareholderengagementanddownsiderisk AT oikonomoui esgshareholderengagementanddownsiderisk AT sautnerz esgshareholderengagementanddownsiderisk AT starkslt esgshareholderengagementanddownsiderisk AT zhouxy esgshareholderengagementanddownsiderisk |