As the ESG finance field and the use of ESG data in investment decision‐making continue to grow, the authors seek to shed light on several important aspects of ESG measurement and data. This article is intended to provide a useful guide for the rapidly rising number of people entering the field. The authors focus on the following:

1. The sheer variety, and inconsistency, of the data and measures, and of how companies report them. Listing more than 20 different ways companies report their employee health and safety data, the authors show how such inconsistencies lead to significantly different results when looking at the same group of companies.
2. ‘Benchmarking,’ or how data providers define companies' peer groups, can be crucial in determining the performance ranking of a company. The lack of transparency among data providers about peer group components and observed ranges for ESG metrics creates market‐wide inconsistencies and undermines their reliability.
3. The differences in the imputation methods used by ESG researchers and analysts to deal with vast ‘data gaps’ that span ranges of companies and time periods for different ESG metrics can cause large ‘disagreements’ among the providers, with different gap‐filling approaches leading to big discrepancies.
4. The disagreements among ESG data providers are not only large, but actually increase with the quantity of publicly available information. Citing a recent study showing that companies that provide more ESG disclosure tend to have more variation in their ESG ratings, the authors interpret this finding as clear evidence of the need for ‘a clearer understanding of what different ESG metrics might tell us and how they might best be institutionalized for assessing corporate performance.’

What can be done to address these problems with ESG data? Companies should ‘take control of the ESG data narrative’ by proactively shaping disclosure instead of being overwhelmed by survey requests. To that end, companies should ‘customize’ their metrics to some extent, while at the same time seeking to self‐regulate by reaching agreement with industry peers on a ‘reasonable baseline’ of standardized ESG metrics designed to achieve comparability. Investors are urged to push for more meaningful ESG disclosure by narrowing the demand for ESG data into somewhat more standardized, but still manageable metrics. Stock exchanges should consider issuing—and perhaps even mandating—guidelines for ESG disclosures designed in collaboration with companies, investors, and regulators. And data providers should come to agreement on best practices and become as transparent as possible about their methodologies and the reliability of their data.

What is corporate purpose? Does it matter for financial performance? How do you develop one? New research documents that most organizations are struggling to diffuse a sense of purpose throughout the organization. Those that can, enjoy better financial performance.

Using data on approximately 500,000 employees we find that our measure of purpose is not related to financial performance. We document that firms exhibiting both high purpose and clarity have systematically higher future accounting and stock market performance, even after controlling for current performance, and that this relation is driven by the perceptions of middle management and professional staff rather than senior executives.

Over the past few years, there has been a significant increase in the number of initiatives seeking to mobilize investor voice towards positive social impact. This paper, provides a framework outlining the role of investors as stewards of the commons. Common ownership of competitors within industries and long-time horizons in ownership of shares are key characteristics for investors that could act as stewards of the commons, such as index funds. Social pressure fueled by small socially responsible investment funds and non-profit organizations and customer pressure from individual investors are critical in mitigating free-rider problems among asset managers and sustaining engagement practices.

This technical note explores how advancements in technology are fundamentally transforming how consumers interact with mobility. Transformation is being driven by three 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 which utilizes a fleet of autonomous, electric vehicles which 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 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? 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. 

Understanding the challenge of change and scenario analysis in environments of transformational change is also the topic of the case ExxonMobil: Business As Usual?

In this line of research Professor Serafeim has documented that corruption and bribery bring fewer business benefits than conventional wisdom would suggest, while generating significant costs both at the personal leader and at the business level. 

For example, using data on hundreds of companies around the world, a clear picture emerges suggesting that after detection organizations bear significant costs through tarnished reputations, damaged regulatory and business relations, and lower employee morale. 

By now most companies have sustainability programs. But a mishmash of sustainability tactics does not add up to a sustainable strategy. To endure, a strategy must address the interests of all stakeholders: investors, employees, customers, and society at large. 

Professor's Serafeim reseach has shown the value implications of integrating sustainability in a company's strategy and operations, and what are the distinguishing organizational processes that sustainable organizations have. His work on the financial materiality of sustainability investments was the first one to demonstrate the path to financial value. Relatedly, in his work he has outlined a process that can be used to execute a sustainable strategy and extend the boundaries of The Performance Frontier, and how to implement a strategy to achieve organizational change.

In his line of work on sustainable investing he has documented a market interest in nonfinancial information, how sell-side analysts have shifted their perceptions about the value of sustainability, and how firms with better ESG performance have better access to finance.

An increasing number of companies issue sustainability or integrated reports. It is estimated that now more than 7,000 companies do so. In addition, an increasing number of countries now mandate reporting of ESG information.

In his work, Professor Serafeim has articulated the functions of corporate reporting, why integrated reporting promises to serve those functions effectively, and an institutional strategy for adoption of integrated reporting globally. Relatedly, he has documented how a company can use integrated reporting to shape a more long-term oriented investor base. 

Moreover, he has demonstrated the consequences of mandatory sustainability reporting and how investors react to mandatory nonfinancial reporting.

An increasing number of investors use reported environmental, social and governance (ESG) information. In new research we provide insights into why and how investors use ESG data. Relevance to investment performance is the most frequent motivation for use of ESG data followed by client demand and product strategy, bringing change in companies, and then ethical considerations. Important impediments to the use of ESG information are the lack of reporting standards and as a result lack of comparability, reliability, quantifiability and timeliness. Among the different ESG investment styles, negative screening is perceived as the least investment beneficial while full integration into stock valuation and engagement are considered more beneficial but they are all practiced with equal frequency. Current practices of different ESG styles, especially screening, are driven by product and ethical considerations. In contrast, integration is driven by relevance to investment performance. Future practices of ESG styles are driven by relevance to investment performance, bringing change in companies, and concerns about data reliability.