• 2020
• Working Paper

How ESG Issues Become Financially Material to Corporations and Their Investors

By: David Freiberg, Jean Rogers and George Serafeim

Management and disclosure of environmental, social and governance (ESG) issues have received substantial interest over the last decade. In this paper, we outline a framework of how ESG issues become financially material, affecting corporate profitability and valuation....  View Details

Keywords: Materiality; Esg; Pharmaceutical Companies; Business Ethics; Sustainability; Environment; Disclosure; Disclosure And Access; Regulation; Social Impact; Environmental Sustainability; Social Issues; Corporate Governance; Ethics; Corporate Disclosure; Corporate Accountability; Resource Allocation; Finance; Accounting; Valuation

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Freiberg, David, Jean Rogers, and George Serafeim. "How ESG Issues Become Financially Material to Corporations and Their Investors." Harvard Business School Working Paper, No. 20-056, November 2019. (Revised November 2020.)

• 2019
• Chapter

The Consequences of Mandatory Corporate Sustainability Reporting

By: Ioannis Ioannou and George Serafeim

A key aspect of the governance process inside organizations and markets is the measurement and disclosure of important metrics and information. In this chapter, we examine the effect of sustainability disclosure regulations on firms’ disclosure practices and...  View Details

Keywords: Mandatory Disclosure; Mandatory Reporting; Sustainability; Corporate Social Responsibility; Social Impact; Valuation; China; South Africa; Europe; Asia; Regulation; Corporate Disclosure; Integrated Corporate Reporting; Corporate Social Responsibility and Impact; Governing Rules, Regulations, and Reforms; Corporate Governance; China; Denmark; Malaysia; South Africa

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Ioannou, Ioannis, and George Serafeim. "The Consequences of Mandatory Corporate Sustainability Reporting." In The Oxford Handbook of Corporate Social Responsibility: Psychological and Organizational Perspectives, edited by Abagail McWilliams, Deborah E. Rupp, Donald S. Siegel, Günter K. Stahl, and David A. Waldman, 452–489. Oxford University Press, 2019.

• 2021
• Working Paper

Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks

By: Caroline Flammer, Michael W. Toffel and Kala Viswanathan

This paper examines whether—in the absence of mandated disclosure requirements—shareholder activism can elicit greater disclosure of firms’ exposure to climate change risks. We find that environmental shareholder activism increases the voluntary disclosure of climate...  View Details

Keywords: Shareholder Activism; Climate Risk; Corporate Accountability; Climate Change; Corporate Disclosure; Corporate Governance; Corporate Social Responsibility and Impact; Business and Shareholder Relations; Risk and Uncertainty; Natural Environment; Environmental Sustainability; Financial Services Industry; United States

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Flammer, Caroline, Michael W. Toffel, and Kala Viswanathan. "Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks." Harvard Business School Working Paper, No. 20-049, October 2019. (Revised March 2021.)

• Article

Creating Firm Disclosures

By: Amir Amel-Zadeh, Alexandra Scherf and Eugene F. Soltes

Managers expend significant time and effort preparing disclosures about firm performance and strategy. Although prior literature has explored how variation in the style and presentation of disclosures impacts investors' perceptions of firms, little is known about how...  View Details

Keywords: Disclosure; Earnings Conference Call; Field Study; Md＆a; Textual Analysis; Corporate Disclosure

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Amel-Zadeh, Amir, Alexandra Scherf, and Eugene F. Soltes. "Creating Firm Disclosures." Journal of Financial Reporting 4, no. 2 (Fall 2019): 1–31.

• 2019
• White Paper

Impact-Weighted Financial Accounts: The Missing Piece for an Impact Economy

By: George Serafeim, T. Robert Zochowski and Jennifer Downing

Reimagining capitalism is an imperative. We need to create a more inclusive and sustainable form of capitalism that works for every person and the planet. Massive environmental damage, growing income and wealth disparity, stress, and depression within developed...  View Details

Keywords: Impact-weighted Accounts; Iwai; Background; Economic Systems; Economy; Corporate Social Responsibility and Impact; Measurement and Metrics; Financial Statements

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Serafeim, George, T. Robert Zochowski, and Jennifer Downing. "Impact-Weighted Financial Accounts: The Missing Piece for an Impact Economy." White Paper, Harvard Business School, Boston, MA, September 2019.

• July 2019
• Article

Market Reaction to Mandatory Nonfinancial Disclosure

By: Jody Grewal, Edward J. Riedl and George Serafeim

We examine the equity market reaction to events associated with the passage of a directive in the European Union (EU) mandating increased nonfinancial disclosure. These disclosures relate to firms’ environmental, social, and governance (ESG) performance and would be...  View Details

Keywords: Nonfinancial Information; Nonfinancial Performance; Esg; Esg (environmental, Social, Governance) Performance; Investor Behavior; Disclosure; Disclosure Regulation; Regulation; Sustainability; Corporate Performance; Information; Corporate Disclosure; Governing Rules, Regulations, and Reforms; Performance; Environmental Sustainability; Corporate Governance; Outcome or Result

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Grewal, Jody, Edward J. Riedl, and George Serafeim. "Market Reaction to Mandatory Nonfinancial Disclosure." Management Science 65, no. 7 (July 2019): 3061–3084.

• May 2019
• Teaching Note

Tesla, Inc. in 2018

By: Siko Sikochi and Suraj Srinivasan

Teaching Note for HBS No. 119-013. The case facilitates a discussion about corporate governance and its role in achieving sustainable profitability and driving long-term shareholder value. The discussion can focus on such questions as what constitutes good governance,...  View Details

Keywords: Public Company; Corporate Governance; Governing and Advisory Boards; Cost vs Benefits

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Sikochi, Siko, and Suraj Srinivasan. "Tesla, Inc. in 2018." Harvard Business School Teaching Note 119-101, May 2019.

• May 2019
• Article

Who Consumes Firm Disclosures? Evidence from Earnings Conference Calls

By: Anne Heinrichs, Jihwon Park and Eugene F. Soltes

Using a set of proprietary records, we examine who consumes quarterly earnings conference calls and under which circumstances the calls are consumed. While there is significant interest in calls by institutional investors and sell-side analysts, we find that investors...  View Details

Keywords: Disclosure; Conference Calls; Firm News; Corporate Disclosure; Business Earnings; Situation or Environment

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Heinrichs, Anne, Jihwon Park, and Eugene F. Soltes. "Who Consumes Firm Disclosures? Evidence from Earnings Conference Calls." Accounting Review 94, no. 3 (May 2019): 205–231.

• Article

Four Things No One Will Tell You About ESG Data

By: Sakis Kotsantonis and George Serafeim

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...  View Details

Keywords: Esg; Esg (environmental, Social, Governance) Performance; Esg Reporting; Data Analytics; Sustainability; Sustainability Reporting; Csr; Transparency; Investment Management; Socially Responsible Investing; Sustainable Finance; Sustainable Development; Inclusion; Inclusive Growth; Corporate Social Responsibility and Impact; Corporate Accountability; Investment; Management; Climate Change; Corporate Governance; Diversity; Integrated Corporate Reporting

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Kotsantonis, Sakis, and George Serafeim. "Four Things No One Will Tell You About ESG Data." Journal of Applied Corporate Finance 31, no. 2 (Spring 2019): 50–58.

• 2020
• Working Paper

Equilibrium Effects of Pay Transparency in a Simple Labor Market

By: Zoë B. Cullen and Bobak Pakzad-Hurson

The public discourse around pay transparency has focused on the direct effect: how workers seek to rectify newly disclosed pay inequities through renegotiations. The question of how wage-setting, bargaining, and hiring practices change with higher transparency has...  View Details

Keywords: Pay Transparency; Online Labor Market; Privacy; Wage Gap; Negotiation; Corporate Disclosure; Compensation and Benefits; Gender

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Cullen, Zoë B., and Bobak Pakzad-Hurson. "Equilibrium Effects of Pay Transparency in a Simple Labor Market." Working Paper, April 2020. (Formerly two papers, "Equal Work for Unequal Pay" and "Is Pay Transparency Good?" Selected as Exemplary Applied Modeling Paper at EC '19. Reject and Resubmit at Econometrica.)

• November 2018 (Revised January 2019)
• Case

Investor Relations Practices at Edwards Lifesciences

By: C. Fritz Foley and F. Katelynn Boland

In January 2017, the senior leadership team at Edwards Lifesciences were preparing for the quarterly earnings call that would cover the fourth quarter of 2016. They faced questions about what types of information they should disclose on the call, as well as during...  View Details

Keywords: Investor Relations; Medical Devices; Corporate Disclosure; Decisions; Business and Shareholder Relations; Medical Devices and Supplies Industry; United States

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Foley, C. Fritz, and F. Katelynn Boland. "Investor Relations Practices at Edwards Lifesciences." Harvard Business School Case 219-058, November 2018. (Revised January 2019.)

• October 2018 (Revised April 2019)
• Case

Stock-Based Compensation at Twitter

By: Jonas Heese, Zeya Yang and Mike Young

Olivia Nash, an analyst at leading hedge fund BlueShark Capital Management, had just finished listening to the hour-long earnings call for Twitter’s Q4 2017 results. Was Twitter doing well? That depended on which numbers she chose to believe. According to Generally...  View Details

Keywords: Twitter; Non-gaap Disclosure; Stock-based Compensation; Earnings Management; Corporate Disclosure; Compensation and Benefits; Stocks

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Heese, Jonas, Zeya Yang, and Mike Young. "Stock-Based Compensation at Twitter." Harvard Business School Case 119-032, October 2018. (Revised April 2019.)

• Editorial

Why CEOs Should Share Their Long-Term Plans with Investors

By: Christina Rehnberg, George Serafeim and Brian Tomlinson

Rather than requiring less short-term information, the key to combating short-termism is to encourage companies to share more information about their long-term plans. Analysis of companies that have done so suggests that long-term plans are not mere marketing...  View Details

Keywords: Ceo; Investor Relations; Disclosure; Long-term Growth; Investing; Business and Shareholder Relations; Strategy; Corporate Disclosure

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Rehnberg, Christina, George Serafeim, and Brian Tomlinson. "Why CEOs Should Share Their Long-Term Plans with Investors." Harvard Business Review (website) (September 19, 2018).