Challenges in ESG Investing and Sustainable Finance

ABSTRACT: 

“ESG investing” and “sustainable finance” integrate environmental (E), social (S), and governance (G) issues into investment decisions. This trend has led to significant regulatory and market changes. The research project explores ESG characteristics, investor challenges, and outcomes/performance. One specific project will address ESG rating disagreements by developing rating methodologies and quantifying managerial incentives. Another will use principal component analysis and machine learning to identify common determinants of ESG ratings, constructing a comprehensive global ESG database. A third project will examine investor challenges in identifying sustainable securities, focusing on greenwashing, tax impacts, and firms’ opportunistic behaviors. Another focus will be investor stewardship, analyzing board turnover due to shareholder activism and shareholder voting behaviors, using proprietary trading data to investigate ESG data’s influence on trading decisions.

Other Research Units:

• Monica Billio, Università "Ca' Foscari", Venezia