ESG & Institutional Investment
Part 5
Henrique C. Martins
About today
This is a lecture about:
- How does G affect the E&S?
- Empirical evidence on ESG
This lecture will follow the flipped classroom method.
About today
Today, you will form groups of 5 students.
There is an excel file containing ESG data for several firms from several countries.
Your job is to create a report about stylized facts using this data.
- You can select a country or an industry of your choice. You can also use all countries and industries.
- There are many ESG-related variables. You should at least get familiar with each variable and use them in your analysis.
Your mission is to find evidence about which ESG factors might affect which financial variables.
Additionally, you want to find whether the structure of the board of directors correlates with ESG variables.
You can use the article Gillan et al (2021) to have ideas of which correlations you wanna test.
About today
In order to find these correlations, you have two main approaches:
- Visualization
- Create graphs exploring the data
- Regression analysis.
- Run Ordinary Least Squares (OLS) regressions with Xs and Ys of your choice.
About today
The deliverable:
You have until the middle of the next class (Monday 16h) to deliver a word document containing your analyses, with all regressions and graphs.
You also may want to write a very short explanation (1 sentence) about the regressions or graphs.
There is no limit (minimum or maximum) of analyses you can report. But, you need to be smart and provide nice analyses.
In the second half of the next class, we will discuss your results and I am going to give a feedback about the evidence that all groups found or complementary evidence based on previous literature.
About the data
\[Size = Ln(Total\;Assets)\]
\[Lev = \frac{Total\;debt}{Total\;Assets}\]
\[ROA = \frac{Net\;income}{Total\;Assets}\]
\[RD = \frac{RD\;Expeditures}{Total\;Assets}\]
\[Capex = \frac{Capital\;Expeditures}{Total\;Assets}\]
\[Mkt = \frac{Market\;Value}{Total\;Assets}\]
I hope you like this class!
Find me at:
https://eaesp.fgv.br/en/people/henrique-castro-martins
https://www.linkedin.com/in/henriquecastror/
