The Future of Mobility: Economic, Environmental, and Social Implications

George  Serafeim; David  Freiberg

Technical Note | HBS Case Collection | July 2017 (Revised March 2019)

The Future of Mobility: Economic, Environmental, and Social Implications

Abstract

This technical note explores how advancements in technology are fundamentally transforming how consumers interact with mobility. Transformation is being driven by three independent trends: the emergence of affordable electric vehicles, the development of autonomous vehicles, and the growth of modernized ride sharing. When integrated, these trends create a transportation model that utilizes a fleet of autonomous, electric vehicles that are not privately owned to provide cheaper, safer, and "greener" travel to more consumers, more often. The potential economy-wide disruptions caused by this transportation system are enormous. How will car manufacturers adapt when vehicle sales plummet as shared, autonomous vehicles increase vehicle utilization and provide greater mobility with a fraction of the number of cars currently on the road? How will oil companies react to falling oil demand caused by the increased adoption of electric vehicles? What are the income inequality ramifications of significantly increased disposable income? How will governments deal with large increases in unemployment as autonomous cars replace professional human drivers? Before disruption occurs, corporate leaders must be prepared to usher their organization through a phase of transformational change; but change is hard. The note ends with a discussion on how to build and lead a successful ambidextrous organization.

Keywords: oil ＆ gas; Automobile Manufacturing; Technological and Scientific Innovation; mobility; inequality; electric vehicles; Ride-sharing; Ambidexterity; Transformation; Disruption; Change; Technological Innovation; Transportation; Equality and Inequality; Auto Industry; Technology Industry; Transportation Industry; Distribution Industry;

Language: English

Format: Print

25 pages

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Citation:

Serafeim, George, and David Freiberg. "The Future of Mobility: Economic, Environmental, and Social Implications." Harvard Business School Technical Note 118-008, July 2017. (Revised March 2019.)

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;