Corporate Reporting in the Big Data Era

George  Serafeim

Column | IIRC Blog | April 29, 2014

Corporate Reporting in the Big Data Era

Abstract

Advancements in information technology can improve corporate communication with shareholders, but not through incessant data dumps. Instead, companies will more likely be poised for continued success if they use digital platforms for long-term oriented engagement and communication in the context of our changing global economy. This is characterized by increased demand for corporate transparency, heightened global competition leading to customer mobility, and resource scarcity that raises the importance of innovation in sourcing, production, and delivery processes. Quality of communication, not quantity will yield important benefits.

Keywords: integrated reporting; big data; corporate reporting; corporate accountability; sustainability; corporate social responsibility; corporate governance; accounting; reporting; Organizational Change and Adaptation; Corporate Accountability; Data and Data Sets; Information Technology; Communication; Financial Reporting; Business and Shareholder Relations;

Format: Electronic

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Citation:

Serafeim, George. "Corporate Reporting in the Big Data Era." IIRC Blog (April 29, 2014).

Tiffany Pham taught herself to code and created a technology platform, Mogul, with the goal of providing girls and women around the world with information and opportunities. After several years Mogul had reached more than 146 million women around the world and had measurable outcomes in increasing the diversity of talent pipelines for major Fortune 500 companies that served as its clients. The case explores Pham’s journey in building Mogul and the idea of moving into other business lines, such as media or venture capital, making Mogul not just a place for people to connect but also a global brand.

Article | Financial Analysts Journal | 2020

Public Sentiment and the Price of Corporate Sustainability

George Serafeim

Combining corporate sustainability performance scores based on environmental, social, and governance (ESG) data with big data measuring public sentiment about a company’s sustainability performance, I find that the valuation premium paid for companies with strong sustainability performance has increased over time and that the premium is increasing as a function of positive public sentiment momentum. An ESG factor going long on firms with superior or increasing sustainability performance and negative sentiment momentum and short on firms with inferior or decreasing sustainability performance and positive sentiment momentum delivers significant positive alpha. This low sentiment ESG factor is uncorrelated with other factors, such as value, momentum, size, profitability, and investment. In contrast, the high sentiment ESG factor delivers insignificant alpha and is strongly negatively correlated with the value factor. The evidence suggests that public sentiment influences investor views about the value of corporate sustainability activities and thereby both the price paid for corporate sustainability and the investment returns of portfolios that consider ESG data.

Keywords: sustainability; ESG; ESG (environmental, social, governance) performance; investment management; investment strategy; big data; Machine learning; environment; Environmental Sustainability; Corporate Governance; Performance; Asset Pricing; Investment; Management; Strategy; Human Capital; Public Opinion; Value;

Citation:

Serafeim, George. "Public Sentiment and the Price of Corporate Sustainability." Financial Analysts Journal 76, no. 2 (2020): 26–46. View Details

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Corporate Reporting in the Big Data Era

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