The rise of ESG rating agencies and management of corporate ESG violations

IF 3.6 2区经济学 Q1 BUSINESS, FINANCE

Journal of Banking & Finance Pub Date : 2024-09-21 DOI:10.1016/j.jbankfin.2024.107312

Albert Tsang , Yujie Wang , Yi Xiang , Li Yu

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Abstract

In recent years, firms have increasingly come under scrutiny from environmental, social, and governance (ESG) rating agencies which systematically assess and publicize ESG-related information to diverse stakeholders. This study aims to investigate whether firms exhibit a heightened incentive to avoid ESG-related regulatory violations once they come under the coverage of ESG rating agencies. Analyzing data spanning from 2000 to 2018 and considering the coverage provided by four prominent ESG rating agencies to U.S. firms, we leverage the staggered initiation and intensity of this coverage. Our findings reveal a negative correlation between ESG violations and the commencement and extent of coverage by ESG rating agencies. This relationship is particularly pronounced for firms characterized by lower levels of corporate monitoring as indicated by fewer analysts providing coverage, limited media attention, weaker ESG commitments, and less disparate ESG ratings. Taken together, our study sheds light on the monitoring role of ESG rating agencies, illustrating their significance in incentivizing managers to mitigate ESG violations.

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环境、社会和公司治理（ESG）评级机构的兴起以及对企业环境、社会和公司治理违规行为的管理

近年来，企业越来越多地受到环境、社会和治理（ESG）评级机构的监督，这些机构系统地评估并向不同的利益相关者公布 ESG 相关信息。本研究旨在探讨企业一旦被ESG评级机构覆盖，是否会表现出更强的动机来避免ESG相关的监管违规行为。我们分析了 2000 年至 2018 年的数据，并考虑了四家著名 ESG 评级机构对美国公司的覆盖范围，利用了这种覆盖范围的交错启动和强度。我们的研究结果表明，ESG违规行为与ESG评级机构覆盖的开始时间和程度之间存在负相关关系。这种关系对于企业监控水平较低的公司尤为明显，这表现在提供报道的分析师较少、媒体关注有限、ESG 承诺较弱以及 ESG 评级差异较小。综上所述，我们的研究揭示了环境、社会和治理评级机构的监督作用，说明了它们在激励管理者减少环境、社会和治理违规行为方面的重要性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Banking & Finance Multiple-

CiteScore

6.40

自引率

5.40%

发文量

262

期刊介绍： The Journal of Banking and Finance (JBF) publishes theoretical and empirical research papers spanning all the major research fields in finance and banking. The aim of the Journal of Banking and Finance is to provide an outlet for the increasing flow of scholarly research concerning financial institutions and the money and capital markets within which they function. The Journal''s emphasis is on theoretical developments and their implementation, empirical, applied, and policy-oriented research in banking and other domestic and international financial institutions and markets. The Journal''s purpose is to improve communications between, and within, the academic and other research communities and policymakers and operational decision makers at financial institutions - private and public, national and international, and their regulators. The Journal is one of the largest Finance journals, with approximately 1500 new submissions per year, mainly in the following areas: Asset Management; Asset Pricing; Banking (Efficiency, Regulation, Risk Management, Solvency); Behavioural Finance; Capital Structure; Corporate Finance; Corporate Governance; Derivative Pricing and Hedging; Distribution Forecasting with Financial Applications; Entrepreneurial Finance; Empirical Finance; Financial Economics; Financial Markets (Alternative, Bonds, Currency, Commodity, Derivatives, Equity, Energy, Real Estate); FinTech; Fund Management; General Equilibrium Models; High-Frequency Trading; Intermediation; International Finance; Hedge Funds; Investments; Liquidity; Market Efficiency; Market Microstructure; Mergers and Acquisitions; Networks; Performance Analysis; Political Risk; Portfolio Optimization; Regulation of Financial Markets and Institutions; Risk Management and Analysis; Systemic Risk; Term Structure Models; Venture Capital.