Found 48 article(s) for author 'George Serafeim'

Market Reaction to Mandatory Nonfinancial Disclosure

Market Reaction to Mandatory Nonfinancial Disclosure. George Serafeim, August 8, 2019, Paper, “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 applicable to firms listed on EU exchanges or with significant operations in the EU. We predict and find (i) an average negative market reaction of –0.79% across all firms, (ii) a less negative market reaction for firms having higher predirective nonfinancial performance, and (iii) a less negative reaction for firms having higher predirective nonfinancial disclosure levels. In addition, results are accentuated for firms having the most material ESG issues, as well as investors anticipating proprietary and political costs as a result of the mandated disclosures. Finally, we find that the negative market reaction is concentrated in firms with weak preregulation ESG performance and disclosure, which exhibit an average return of –1.54%; in contrast, firms with strong preregulation disclosure and performance exhibit an average positive return of 0.52%. Overall, the results are consistent with the equity market perceiving net costs (benefits) for firms with weak (strong) nonfinancial performance and disclosure around key events surrounding the mandatory disclosure regulation of nonfinancial information.Link

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Corporate Purpose and Firm Ownership

Corporate Purpose and Firm Ownership. George Serafeim, August 2019, Paper, “Analyzing data from approximately two million employees in a sample of more than 1,000 established public and private US companies, we find that corporate purpose is lower among employees of public companies. This result is driven by weaker beliefs held by employees in the salaried middle ranks and hourly workers, and not by senior executives. Among public companies, purpose is progressively lower in companies with more concentrated shareholders, suggesting that shareholder power is associated with a lower sense of purpose among employees. A substantial portion of these patterns can be explained by differences in CEO backgrounds and CEO-employee pay gap. Public firms, particularly those with strong shareholders, choose outsider CEOs at a higher rate and pay them more relative to their employees. Altogether, this study finds that the strength of corporate purpose varies substantially across companies, and is related to the identity of the firm owners, and the choices they make.Link

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Four Things No One Will Tell You About ESG Data

Four Things No One Will Tell You About ESG Data. George Serafeim, July 2, 2019, Paper, “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…Link

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3 Ways Investors Can Pressure Companies to Take Sustainability Seriously

3 Ways Investors Can Pressure Companies to Take Sustainability Seriously. George Serafeim, June 23, 2019, Paper, “Climate change and other environmental, social, and governance (ESG) issues are not political or partisan topics, and not limited to niche investors. Measuring and analyzing ESG information is becoming an important activity for any investor who seeks to optimize risk and return —a growing body of evidence shows that companies with strong ESG policies produce better financial results. Academic research analyzing 2,000 U.S. companies from 1993 to 2014 shows higher profit margins and superior risk-adjusted returns for those that made significant ESG investments to improve their performance on industry-specific material ESG…Link

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Harvard Business School Broadcast (Podcast)

Harvard Business School Broadcast (Podcast). Jan Rivkin, George Serafeim, William Kerr, June 20, 2019, Audio, “Bloomberg Businessweek Editor Joel Weber talks about Businessweek Best B-Schools rankings. Scott Sperling, Co-President at Thomas Lee Partners, explains why companies are taking longer to go public. Sal Khan, Founder of Khan Academy, talks about launching a partnership with NWEA. John Connaughton, Co-Managing Partner at Bain Capital, discusses opportunities in private equity investing. Jan Rivkin, Senior Associate Dean at Harvard Business School, talks about the HBS MBA program. George Serafeim, Professor of Business Administration at Harvard Business School, shares his thoughts on ESG and impact investing. Kelley Morrell, Head of Tactical Opportunities at Blackstone, talks opportunities beyond traditional private equity. Bill Kerr, Professor of Business Administration at Harvard Business School, discusses managing the future of work. Jonathan Nelson, Founder and CEO at Providence Equity, talks about investing in live events and the value of content. Hosts: Carol Massar and Jason Kelly. Producer: Paul Brennan.Link

 

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Yes, Sustainability Can Be a Strategy

Yes, Sustainability Can Be a Strategy. George Serafeim, February 11, 2019, Opinion, “In recent years, a growing number of companies around the world have voluntarily adopted and implemented a broad range of sustainability practices. The accelerating rate of adoption of these practices has also provoked a debate about the nature of sustainability and its long-term implications for organizations. Is the adoption of sustainability practices a form of strategic differentiation that can lead to superior financial performance? Or, is it a strategic necessity that can ensure corporate survival but not necessarily outperformance?Link

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The Economic Significance of Long‐Term Plans

The Economic Significance of Long‐Term Plans. George Serafeim, November 2018, Paper, “Short-termism in capital markets has increasingly become a concern for both companies and the investor community. Although there have been widespread calls for investors and companies to pay more attention to the long-term, until recently there was no platform for companies to exchange long-term information with their long-term investors. CECP’s Strategic Investor Initiative (SII) presents a solution to this structural gap in corporateshareholder communications, with CEO-Investor Forums providing the stage for CEOs to share their long-term strategic plans with institutional investors.Link

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Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds

Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds. Malcolm Baker, George Serafeim, April 27, 2018, Paper, “Estimates suggest that mitigating and adapting to climate change will cost trillions of dollars. We study the developing market for green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes. After an overview of the U.S. corporate and municipal green bonds market, we study pricing and ownership patterns of municipal green bonds using a framework that incorporates assets with nonpecuniary
sources of utility. The results support the prediction that green bonds are issued at a premium to otherwise similar ordinary bonds—that is, with lower yields—on an after-tax basis.Link

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Sustainability: a new way of doing business

Sustainability: a new way of doing business. George Serafeim, March 22, 2018, Audio, “George Serafeim is the Jakurski Family Associate Professor of Business Administration at Harvard Business School. He has a wide range of research interests including international business, corporate governance and corporate reporting, with a special focus on sustainability. George has presented his research in over 60 countries and is one of the most popular business authors, according to rankings of the Social Science Research Network.Link

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George Serafeim on employment, inequality, and the relationship between corporate purpose and financial performance

George Serafeim on employment, inequality, and the relationship between corporate purpose and financial performance March 2018. GrowthPolicy’s Devjani Roy interviewed George Serafeim, Jakurski Family Associate Professor of Business Administration at Harvard Business School, on employment, inequality, and the relationship between corporate purpose and financial performance. | Click here for more interviews like this one. Links: […]

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