3 Ways Investors Can Pressure Companies to Take Sustainability Seriously

Mindy  Lubber; George  Serafeim

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Editorial | Barron's

3 Ways Investors Can Pressure Companies to Take Sustainability Seriously

by Mindy Lubber and George Serafeim

Keywords: sustainability; activism; ESG; shareholder activism; investor behavior; climate change; environment; diversity; corporate governance; corporate accountability;

Format: Electronic

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Citation:

Lubber, Mindy, and George Serafeim. "3 Ways Investors Can Pressure Companies to Take Sustainability Seriously." Barron's (June 23, 2019).

About the Author

George Serafeim

Charles M. Williams Professor of Business Administration

Accounting and Management

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Case | HBS Case Collection | March 2020 (Revised May 2020)

Redefining Mogul

George Serafeim, Ethan Rouen and Sarah Gazzaniga

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.

Keywords: women; inclusion; technology; branding; social impact; Entrepreneurship; Online Technology; Information; Knowledge Dissemination; Gender; Diversity; Brands and Branding; Expansion; Strategy; Media; Personal Development and Career;

Citation:
Serafeim, George, Ethan Rouen, and Sarah Gazzaniga. "Redefining Mogul." Harvard Business School Case 120-043, March 2020. (Revised May 2020.) View Details

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Teaching Plan | HBS Case Collection | May 2020

SK Group: Social Progress Credits

George Serafeim, Ethan Rouen and David Freiberg

Teaching Plan for HBS Case No. 120-071.

Citation:
Serafeim, George, Ethan Rouen, and David Freiberg. "SK Group: Social Progress Credits." Harvard Business School Teaching Plan 120-112, May 2020. View Details

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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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3 Ways Investors Can Pressure Companies to Take Sustainability Seriously

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