Nos derniers articles

This paper explores the #reputationalrisk associated with #esg investments and provides a formal theoretical valuation system for ESG reputation. The authors argue that ESG criteria adoption has multiple positive dimensions and outcomes, but the analysis of the #risks related to #sustainability is uncommon. They model ESG reputational risk using paradigms of #behaviouralfinance, defining it by subjective probabilities framed in a #probability function based on potential trustees' preferences. The paper highlights the need for accurate evaluation of reputational risks related to ESG investments by firms and other institutions, including #insurance companies and #pensionfunds.

While #financialrisks, #politicalrisks, #compliancerisks, and #cyberrisks are more easily quantifiable, #esgrisk presents a challenge for boards to identify, assess, and develop plans to its #riskmitigation. Using #nestlé USA as a case study, the article highlights how #esg#risks can migrate across different pillars: what initially appeared as #supplychainrisk moved across pillars into #litigation and #businessrisk before settling as ongoing ESG risk proper.

As more #laws and #legal norms are introduced to enforce #esg standards, directors are required to ensure that their corporation complies with these standards. This encroaches on the #fiduciary relationship between directors and the corporation and weakens the Business Judgment Rule (#bjr) as directors must operate within the law and implement #compliance systems to keep up with the growing #esggoals.

#audit is increasingly being called upon to provide assurance on #esg#claims made by their clients, in addition to assessing the accuracy of financial numbers. The concept of #doublemateriality, which involves assessing materiality from both financial and non-financial aspects, is becoming increasingly important in audits. This paper proposes an audit approach that incorporates a “double materiality” lens of financial and ESG data to evaluate the #compliancerisk of ESG #disclosure.

"... studies in various findings suggests a positive link between ESG and the financial performance of an organization."

" The global climate crisis and the economy’s green transition are giving rise to new types of risks for banks. This paper analyses some of the key international bank regulatory standards, namely disclosure, risk management, governance and regulatory capital. "

"Climate risk is positively associated with the environmental, social, and governance (ESG) performance of banks and negatively associated with the stakeholder ESG sentiment towards them. Negative sentiment due to such exposure is associated with worse financial performance and lower stock returns, but stronger ESG performance mitigates these adverse effects."

"... there is little evidence for climate-related disclosure demand. Results also suggest significant variation in costs and benefits across firms. Thus, one overarching disclosure requirement is likely inefficient."

"Despite its relevance, forward-looking information is still a confusing topic, in terms of contents and applications, especially in the context of ESG, where there is a need for greater clarity and standardization of the definitions of the ESG indicators."

"This paper reviews the use of AI in the ESG field: textual analysis to measure firms’ ESG incidents or verify the credibility of companies’ concrete commitments, satellite and sensor data to analyse companies’ environmental impact or estimate physical risk exposures, machine learning to fill missing corporate data (GHG emissions etc.)."