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Department of Economics ECONGU 4913 Spring 2020 Columbia University
ECON GU 4913 – 004: SENIOR SEMINAR ON MACROECONOMICS [Environmental, Social, and Governance (ESG) Investing]
Faculty: Tamrat W. Gashaw, Ph.D. Email address : tg2681@columbia.edu Office : International Affairs Building 1001A Office hours: MW: 11:00 AM – 12:30 PM and by appointment Course Web site: https://courseworks2.columbia.edu/courses/96153 Class room and time: 1027 International Affairs Building, M. 4:10 -6:00 PM
This course ( ECON GU 491 3 ) is a senior level course on specific topics in Economics and Finance. The purpose of this seminar is to study some topics in Sustainable Economics and Finance/Investing using current empirical researches in the area. In this seminar, topics that are covering Environmental, Social, and Governance (ESG) indicators, both at macro- and micro-levels will be covered. Topics on ESG include:
1. Environmental Issues:  Macro – level : Environmental and Resource Economics, Ecology, Supply and demand of environmental goods and services, pollution, climate change, so on.  Micro – level : Environmental and Resource Economics, Ecology, Supply and demand of environmental goods and services, pollution, climate change, portfolio selection based on Environmental indicators so on. 2. Social Issues:  Macro – level: Social justice with respect to poverty, income/gender/racial inequality, access to health care, education, housing, financial services, and so on.  Mi cro – level: Micro aspects of Social justice with respect to poverty, income inequality, access to health care, education, housing, financial services, portfolio selection based on Social indicators and/or Socially Responsible Investing (SRI). 3. Governance Issues:  Macro – level : The macroeconomic impact of good governance, political stability, economic systems, regulatory effectiveness/environment, policy environment, political system, taxation, and so on.  Micro – level : The microeconomic impact of good governance at firm level, political stability, economic systems, regulatory effectiveness/environment, policy environment, political system, taxation, and so on. In addition, we consider the portfolio selection procedure/impact of some governance indicators.
Most of the students’ research topics in the past as well as the journal articles that we were presenting and discussing were largely focused on topics such as corporate social responsibility,
COURSE AND INSTRUCTOR INFORMATION
COURSE DESCRIPTION:
sustainable investing, performance of companies that pay attention to sustainability indicators, such as diversity in management/board, worker’s happiness, and pollution/environmental issues, will be covered. In particular, questions like:

1) Do companies that pay attention to sustainability (triple-bottom line) outperform others or the market portfolio?

2) Can welfare be enhanced if Environmental, Social, and Governance (ESG) investing is followed?

3) Does resource scarcity in the long run imply companies to follow ESG based investing?

4) Does social pressure lead to ESG based resource allocation? and so on.
ECON UN3211: Intermediate Microeconomics ECON UN3213: Intermediate Macroeconomics ECON UN3412: Introduction to Econometrics
After studying this course, you will be able to:  Goal 1: Understand contemporary topics of Sustainable Economics and Investing. o Demonstrate understanding of and ability to apply theories of sustainability. o Develop a basic understanding of ESG criteria for making investment decisions. o Articulate and present current and past literature that focus on sustainability and related investment strategies globally.  Goal 2: Produce high quality complete research paper on any topics of ESG based Investing. o Demonstrate ability to identify important sources (i.e., of data, related literature, and materials) that will be used in your paper. o Analyze these data, literature and materials that you identify and gather to conduct a research on your selected topics. o Demonstrate ability to clearly communicate and present your analysis and findings in both written and oral presentation forms articulating your work and findings in the class.
1. Textbooks (Recommended)  Ramian and Gregoriou (2016).
Handbook of Environmental and Sustainable Finance .
Elsevier Inc. UK.  Matthew W. Sherwood (2019) Responsible Investing: An Introduction to Environmental, Social, and Governance Investments . Routledge. 1st Edition.  Peter Camejo (2002). The SRI Advantage: Why Socially Responsible Investing Has Outperformed Financially? New Society Publisher.  Paul Herman, Jessica Skylar, and Gayle Keck (2010). The HIP Investor: Make Bigger Profits by Building a Better World Hardcover . Wiley: John Wiley & Sons, Inc.  Amy Domini (2001). Socially Responsible Investing: Making a Difference and Making Money . Dearborn Trade, a Kaplan Professional Company.  Morgan Simon (2017). Real Impact: The New Economics of Social Change . Hachette Book Group.
PREREQUISITS:
TEXTBOOK AND READINGS
COURSE LEARNING OUTCOMES
2. Articles  See below under the selected Topics for reading.
COURSE FORMAT
This course will have two major parts. These are workshop and research. Regarding the first part, I will allocate the first 4 – 5 weeks to discuss some topics on ESG based economic/financial resource allocation. In these 4 -5 weeks, I will discuss some important articles/book chapters/ that need to be considered in order to expose you to the area of ESG or SRI based investment. As any type of workshop, it is you (students) who will determine the quality of each session. My task will be facilitating the discussion and guiding it towards the desired outcome. So, towards this end, students are required to select and present articles on related economic issues from journals (see the list of articles for reading at the end), newspapers, books, and other sources that are related to the main theme of the course. Students are also expected to participate constructively in class and for that each student should read all the required/assigned materials, write reflective essays on them, and present or turn them in on time.
As for the research part of the course, since this is a senior seminar course, you are required to produce and turn in your final research paper no later than 12:00 PM on Monday, May 11, 2020. The paper should be 15 – 20 pages in length and must have some data to answer a specific research question(s) on the ESG related topics. Econometric analysis is highly encouraged as it is one of the prerequisites for this course. That is, the type of your research should mainly be quantitative research (i.e., theoretical or empirical). However, in situations where by you select an interesting research topic but there is no data for you to conduct empirical research, you will be allowed to do a qualitative research. In order to make it easier and clear for all of you, I break your research activities by topics and dates. See the tentative timetable below in the final project sections and due dates table.
EXAMINATIONS AND GRADING
Your grade will be based on article presentations that are assigned to you, class participation and discussions, reflective journals, company profile report, research proposal and final research project/essay. It will be specifically as follows:
Article Presentation: 10% (5% for the first article and 5% for presenting your selected article) Reflective Essays (2-page article reflection for every article you read (present & discuss)): 10% ESG Company Profile: 10% (You are expected to select at least three companies of your choice and assess and rank them based on ESG criteria) OR Social Impact and Sustainable Finance Project: 10% (See the detailed instruction below) Attendance, Class Participation, and Discussions: 10% Research Proposal: 10% Final Research Paper: 50%

Article Presentation:
This article/book chapter presentation is 10% of your grade and it will be a semester long process. This is an individual assignment in which each student will be assigned at least one article or a chapter of a book (from the above listed class material) and each of you are also expected to select one of your own articles that is related to your research topic to present it in class. The assigned student is expected to critically read the material and present in the class. For each article presentation, there will be another student who will be assigned as a discussant. The responsibilities of the discussants are 1) read the article assigned, 2) discuss the article and ask the presenters questions and 3) write a reflective essay on the article s/he discusses.
Reflective Journals/Essays: These essays will be due on April 27, 2020. Please note that these papers are 15% of your final grade. Each student will write a two-page reflective essay on the articles or book chapters that are assigned as a reading assignment or discussion topics. The Reflective Essay will be evaluated based on the following contents:
 Description: Identify the main objective(s) of the material and what are its contributions? Your description needs to have: a) the thesis, main point or main concept of the material that the author is trying to communicate in simple one or two sentences; and b) your summary of the major ideas supporting or criticizing the thesis and the author’s argument.  Analysis: Analyze the material’s major strengths, weaknesses, and limits of its theses and argument.  Reflect/Apply: What did this material mean to you? How can you apply it to real life situation, understanding or experience? What questions, issues, disagreements were raised for you? How can it be improved?
Attendance, Class Participation, and Discussion:
Attendance and participation will be 10% of your total grade. I will prepare and bring a class participation sheet in each class period or I will take note on individuals that are participating in each class. At the end of the semester each student must have his/her name on that participation sheet or note. If you are missing a class (excused or unexcused), you will be writing a one-page report that demonstrate you talk to your friends or classmates and you are catching up on what you missed in class on that particular day. If you fail to do so, I will deduct penalty points from the total attendance and participation points. However, if you miss onethird or more of this class times, you will automatically fail in this class and I transfer “F” to the registrar’s office as your final course grade.
Final Research Proposal:
This project proposal is due on February 24, 2020. Please note that this paper is 10% of your final grade. The main goal of this proposal is to encourage students to formulate a clear and researchable economic problem, review related literature, identify data sources and appropriate methods of data analysis.
1.) You are to choose a topic in Sustainable Economics and Finance (i.e., something similar to the suggested topics list) and then get your topic approved before you start conducting research on your approved topic. [Turn in your topic by 02/10/2020]
2.) Use your approved topic to write a 3 – page proposal. The proposal must be double spaced, have approximately 1-inch margins, and use a 10- or 12-inch font. The paper will be graded as follows:
Clear definition/explanation of the research question 40 Significance of the research 20 Idea Originality 20 Data sources and proposed method 20 Total Points 100
Social Impact and Sustainable Finance Project:
The project is due: April 22, 2020. However, its presentation will be on the Monday of that week on April 20, 2020. Please note that this paper is 10% of your final grade.
This is to give you and your group an opportunity to think about, research on, and come up with a solution to one or more of today’s wicked challenges. These challenges are social, environmental, and governance related problems. These problems are significant enough to be addressed by the current system, that is, if solving these problems were easy and profitable, either governments or corporations could have tackled them long time ago. No one has solved them because the current profit-maximization and individual utility-maximization system is not attractive or conducive for local or multinational corporations to come up with a workable model to address them or many individuals to think about them as the driving cause for life. Most of the courses that you have been and will be taking are not designed to help you work on a project that encourage you to follow your heart, passion, and calling in changing the community and your world with little or no financial rewards at all. For this project, your idea is evaluated by how much environmental, social, and good-governance impact it may have in your village, town, community, state, country or world.
Towards this end, you are encouraged to research a given social problem that you have been thinking about, has personally affected you, your family, friends, and community, and propose a workable solution for it. At this stage, your idea/solution need not be perfect but a little bit different (out of the box) and plausible. Your proposed solution for the problem you researched can be a new business that either directly addresses and tackles the problem or indirectly by using its proceeds to tackle the problem. It can also be a policy change (i.e., through advocacy work), bringing different stakeholders together to address the issue or work with donors or philanthropists in the area to direct their resources for the good of the society. If your idea affects many people in the community, that would be a huge success. However, if your idea is helping even a single person’s life that is still a big success and it needs scaling. I strongly recommend you not to be afraid to be bold, unorthodox, propose out of the ordinary idea, challenge the status quo, and change the current wisdom/system as long as your idea is the best idea to change lives for the better. Do not also be afraid to propose changes that are distributive for the existing social norms and widely accepted practices, as there is no such thing as perfect norm, perfect system, perfect practice or business model. If it were perfect, it could have solved the problems that you will be working on.
The specific instruction for this particular assignment is as follows:
1. If you prefer, form a group of 2 – 3 students for this project; 2. Select the wicked problem in which you may find passion, meaning, and calling; 3. Conduct a detail research on the selected problem (i.e., support evidence for the rationale why you selected this problem, the significance of its effect and how it affects your community); 4. Propose a solution for your selected social challenge preferably in the form of a new “start-up” or “business” so that its main focus is to generate enough resources to tackle your particular social problem; and 5. Write a (social) business plan for your “start-up” idea. At this stage, I do not expect you to write a perfect business plan but it serves you as practice for the many business plans you will be writing both during your school years and beyond. For this assignment, I am very much interested in your idea (i.e., proposed solution) than the quality of your business plan. If your idea is among the few that are worth pursuing, you may work on it further individually or as a group. If successful, you may be working on your own start-up idea both as a student and beyond instead of searching for jobs in the job market after your graduation.
I wish you a very Good Luck and please do not be afraid to try something new that is worth trying and even fail. Although, evidence shows that more than 50% of new start-ups fail within the first 5 years of their existence, it should not prevent you from trying.
Final Research Paper:
This paper is worth 50% of the final grade. You are expected to complete a research paper of 15 – 20 pages (double-spaced; about 5000 words not including charts, tables, and references). The basic outline will be the as follows:
• First 1-2 pages should introduce the issue and how it matters in contemporary economics. In this section of your project, you need to discuss the background of your research problem as to why it is important and also clearly define the purpose/aim/objective of your chosen topic.
• The next 1-2 pages should discuss the significance of your research, its scope and limitations as to which aspect of the topic will not be addressed in your study, and some preliminary results of your research.
• The next 4-8 pages should discuss how economists have analyzed this topic. What is the framework that economists used to assess this issue? What conclusions have been reached? What disagreements remain? This is primarily a literature review.
• The next 1- 2 pages should discuss what type of data is required? How it will be collected? From which sources it will be gathered? Why this particular information is needed in your
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research? And present some descriptive statistics of your gathered data (i.e., graphs, tables, means, variance etc.)
• The next 1- 2 pages should discuss what type of data analysis method is required? Why this particular method is needed for your research? And how can this method be used in the context of your research? What are you testing by using this model/method?
• The next1 -2 pages should explain what kind of data transformation or changes have been used before data analysis? Why were these transformations needed? What is the purpose of using a particular data or transformed data in line with your paper’s objectives?
• The next 2 – 5 pages should discuss the main findings of your analysis and answer your research topic (i.e., economic problem) that you selected to address. How is your result different or similar from previously done similar papers? What is your main new finding or contribution regarding your research topic?
• The final 1 -2 pages will conclude the paper and forward some policy recommendation based on your findings.
• References cited in the paper should follow standard modes of citation.
FINAL PROJECT SECTIONS AND DUE DATES
ECONGU 4913 SENIOR SEMINAR PROJECT Item Description Deadline TURN IN YOUR TOPIC 10-Feb TURN IN YOUR PROPOSAL 24-Feb INTRODUCTION 11-Mar LITERATURE REVIEW 11-Mar DATA AND METHODOLOGY 06-Apr PRELIMENARY RESULT 20-Apr RESULT DISCUSSION 04-May CONCLUSION 11-May FINAL DRAFT 11-May
Make-up Examination Policy: There is no make-up for this course.
Course Expectations: There is an attendance policy for the course. I may not take attendance in every class as it is an upper level class and also due to time constraint, but consistent attendance is strongly
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recommended for good performance in this course. Failure to attend class regularly affects your performance. Attendance and participation are an integral part of the learning process, and success in this course cannot be achieved by simply reading the text. I will also present material in class that will not be found elsewhere.
During each class students are expected to avoid carrying on private conversations, reading newspapers or working on assignments from other courses. In addition, you are also expected to turn off your lap tops, cell phones, tablets, pagers, and PDAs prior to entering class unless we need them in class for the purpose of this course as determined by me. You may be asked to leave the classroom if these policies are violated or I’ll deduct points from your overall score.
Important! The only email address that should be used for communication is the email address associated with UNI@COLUMBIA.EDU ID.
Statement on Academic Integrity:
As all classes in the University, the Honor Code established by the students of Columbia University will be effective in this class as well. If any student is found violating academic integrity, that is cheating, plagiarizing, and committing other academic dishonesty, cannot be tolerated and actions will be taken by me as well as school Deans will be notified. For details of student’s honor code see http://bulletin.columbia.edu/generalstudies/undergraduates/gs-honor-pledge/.
Basic Rules for this Course:
1. Always come to class prepared to learn and participate in class 2. Always ask questions when you don’t understand something 3. Always challenge yourself to do your best in this course 4. Always show respect for everyone in the class – classmate, TAs, the professor, and YOURSELF. 5. Always keep academic honesty and integrity by affirming the honors code. 6. Attempt to attend all recitations and office hours by TAs in order to get additional help.
ODS Accommodations:
If you are a student with a disability and have a DS-certified ‘Accommodation Letter’ please notify me at least 2 weeks prior to the test dates listed above. If you believe that you might have a disability that requires accommodation, you should contact Disability Services at 212854-2388 and disability@columbia.edu.
For further information and resources on ODS accommodations, please refer to statement online at http://www.college.columbia.edu/rightsandresponsibilities.
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PRELIMINARY COURSE OUTLINE
Month Date Topics/Activities/Due dates Remark January 27 Welcome, Syllabus, Introduction
February 3 Topic 1: Introduction to ESG Based Investing
10 Topic 2: Economics and Sustainability Turn in your selected topic
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Topic 3: Sustainability through the lenses of economic and financial valuation
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Topic 4: How Sustainability affects accounting, profitability, and Investing? Introduction to ESG Based Investing. 1 Page Proposal is due
March 2 Round 1: Article #1, #2, #3, & #4,
9 NO PRESENTATION COVID-A9 – No Class
16 NO PRESENTATION Spring Break – No Class
23 NO PRESENTATION COVID-A9 – No Class
30 Round 1: Article #5, #6, #7, #8, & #9, Data collection + Method
April 6 Round 1: Article #10, #11, #12, #13, & #14
13 Your selected + Update: ALL STUDENTS Preliminary Results
20 All SOCIAL IMPACT PROJECTS Preliminary Results
27 Final Paper #1, #2, #3, & #4 Result Discussion
May 4 Final Paper #5, #6, #7, #8, & #9, Conclusion
11 Final Paper #10, #11, #12, #13, & #14 Final Paper Due by 2:00 PM
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STUDENT ACTIVITIES SCHEDULE
Round 1Round 2Social ImpactRound 3
NameEmailNameEmailArticle
Your Article + Progress
Group/individu alFinal paper
1
Sein An sa3428@columbia.edu Ziqi Zhang zz2488@columbia.edu 2-Mar13-Apr 20-Apr 27-Apr
2
Cameron Appel c.appel@columbia.edu Wyatt Neyman wsn2103@columbia.edu 2-Mar13-Apr 20-Apr 27-Apr
3
Owen Choi hc2639@columbia.edu Sein An sa3428@columbia.edu 2-Mar13-Apr 20-Apr 27-Apr
4
Costin Dobrin costin.dobrin@columbia.edu Saraya Hamidi srh2165@columbia.edu 2-Mar13-Apr 20-Apr 27-Apr
5
Christopher Gustafsson cmg2212@columbia.edu Regina Wagner rw2667@columbia.edu 30-Mar 13-Apr
20-Apr 4-May 6Saraya Hamidisrh2165@columbia.eduOwen Choihc2639@columbia.edu30-Mar13-Apr20-Apr4-May 7 Lance Jubel laj2145@columbia.edu Leo Lv dl3178@columbia.edu 30-Mar 13-Apr 20-Apr 4-May 8Leo Lv dl3178@columbia.edu Lance Jubel laj2145@columbia.edu 30-Mar 13-Apr 20-Apr 4-May 9Christopher Munizchristopher.muniz@columbia.eduHoi Yan Shekhs2992@columbia.edu30-Mar13-Apr20-Apr4-May 10 Wyatt Neyman wsn2103@columbia.edu Costin Dobrin costin.dobrin@columbia.edu 6-Apr13-Apr 20-Apr 11-May 11Hoi Yan Shekhs2992@columbia.eduChristopher Munizchristopher.muniz@columbia.edu6-Apr13-Apr20-Apr11-May 12Regina Wagnerrw2667@columbia.eduChristopher Gustafssoncmg2212@columbia.edu6-Apr13-Apr20-Apr11-May 13 Cammy Wan qw2258@columbia.edu Cammy Wan qw2258@columbia.edu 6-Apr13-Apr 20-Apr 11-May 14 Ziqi Zhang zz2488@columbia.edu Cameron Appel c.appel@columbia.edu 6-Apr13-Apr 20-Apr 11-May
ECONUN4913: PRESENTATION SCHEDULE
PRESENTERSDISCUSSANTS
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Readings from Different Journals:
ESG Investing and Profitability/Performance
 Ann Shawing Yang and Suvd Baasandorj (2017). Exploring CSR and financial performance of full-service and low-cost air carriers. Finance Research Letters 23, 291–299.
 Brooks C. and Oikonomou I. (2018). The effects of environmental, social and governance disclosures and performance on firm value: A review of the literature in accounting and finance. The British Accounting Review Volume 50, Issue 1, Pages 115.
 Duranda et al. (2013). Saints versus Sinners. Does morality matter? International Financial Markets, Institutions, and Money 24, 166–183.
 Esteban-Sanchez et al (2017). Corporate social performance and its relation with corporate financial performance: International evidence in the banking industry. Journal of Cleaner Production 162 (2017) 1102-1110.
 [A-1] Fatemi et al (2017). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal. GLOFIN-00367; No of Pages 20.
 Hart, S.L., Ahuja, G., (1996). Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance. Bus. Strat. Environ. 5, 30–37.
 Herremans, I.M., Akathaporn, P., Mclnnes, M., (1993). An investigation of corporate social responsibility reputation and economic performance. Account. Organ. Soc. 18, 587–604.
 Kempf, A., Osthoff, P., (2007). The effect of socially responsible investing on financial performance. European Financial Management 13, 908–922.
 Kim, Y., Park, M.S., Wier, B., (2012). Is earnings quality associated with corporate social responsibility? Account. Rev. 87 (3), 761–796.
 Lei Gao and Joseph H. Zhang (2015). Firms’ earnings smoothing, corporate social responsibility, and valuation. Journal of Corporate Finance 32, 108–127.
 Li et al. (2018). The impact of environmental, social, and governance disclosure on firm value: The role of CEO power. The British Accounting Review Volume 50, Issue 1, Pages 60-75.
 Orlitzky, M., Schmidt, F.L., Rynes, S.L., (2003). Corporate social and financial performance: a meta-analysis. Organ. Stud. 24, 403–441.
 [A-2] Schro eder, M. (2004). The performance of socially responsible investments: Investment funds and indices. Financial Markets and Portfolio Management, 18(2), 122–142.
 Seong K. Byuna,∗, Jong-Min Ohb (2018). Local corporate social responsibility, media coverage, and shareholder value. Journal of Banking and Finance 87 (2018) 68–86.
ESG/SRI and Valuation
 [A-3] Aktas, N., De Bodt, E., Cousin, J., (2011). Do financial markets care about SRI? evidence from mergers and acquisitions. Journal of Banking and Finance 35 (7), 1753– 1761.
 [A-4] Alan, G., Tharyan, R., Whittaker, J., (2014). Corporate social responsibility and firm value: disaggregating the effects on cash flow, risk and growth. Journal of Business Ethics 124, 633–657.
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 Albuquerque, R.A., Durnev, A., Koskinen, Y., (2012), Corporate social responsibility and asset pricing in industry equilibrium. Working Paper, Boston University.
 Barnea, A., Rubin, A., (2010). Corporate social responsibility as a conflict between shareholders. Journal of Business Ethics 97, 71–86.
 [A-5] Becchetti, L., Di Giacomo, S., Pinnacchio, D., (2008). Corporate social responsibility and corporate performance. Evidence from a panel of US listed companies. Applied Economics 40 (5), 541–567.
 Becchetti, L., Ciciretti, R., Hassan, I., Kobeissi, N., (2012). Corporate social responsibility and shareholder’s value. Journal of Business Research 65, 1628– 1635.
 [A-6] Bouslah, K., Kryzanowski, L., M’Zali, B., (2013). The impact of the dimensions of social performance on firm risk. Journal of Banking and Finance 37 (4), 1258–1273.
 Cornett, M.M., Erhemjamts, O., Tehranian, H., (2014), Corporate social responsibility and its impact on financial performance: investigation of U.S. commercial banks, Working Paper, Boston College.
 [A-7] Deng, X., Kang, J., Sin Low, B., (2013). Corporate social responsibility and stakeholder value maximization: evidence from mergers. Journal of Financial Economics 110, 87–109.
 [A-8] Edmans, A., (2011). Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics 101 (3), 621–640.
 Erhemjamts, O., Li, Q., Venkateswaran, A., (2013). Corporate social responsibility and its impact on firm’s investment policy, organizational structure, and performance. Journal of Business Ethics 118 (2), 395–412.
 Gregory, A., Tharyan, R., Whittaker, J., (2013). Corporate social responsibility and firm value: disaggregating the effects on cash flow, risk and growth. Journal of Business Ethics, 1–25.
 Jo, H., Harjoto, M.A., (2011). Corporate governance and firm value: the impact of corporate social responsibility. Journal of Business Ethics 103, 351–383.
 [A-9] Kruger, P., (2014). Corporate goodness and shareholder wealth. Journal of Financial Economics 115 (2), 304– 329.
 [A-10] Manescu, C. (2011). Stock return in relation to environmental, social and governance performance: Mispricing or compensation for risk? Sustainable Development, 19, 95–118.
 Servaes, H., Tamayo, A.M., (2013). The impact of corporate social responsibility on firm value: the role of customer awareness. Management Science 59, 1045–1061.
 Ziegler, A. (2009). Is it beneficial to be included in a sustainability stock index? A panel data study for European firms [working paper 09/121]. Center of Economic Research at ETH Zurich.
 [A-11] Ziegler, A., Schro der, M., & Rennings, K. (2007). The effect of environmental and social performance on the stock performance of European corporations. Environmental and Resource Economics, 37, 661–680.
ESG Indicators/Metrics and Ratings
 [A-12] Alexis Cellier and Pierre Chollet (2016). The effects of social ratings on firm value. Research in International Business and Finance, 36, 656–683.
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 Barbara Del Bosco and Nicola Misani (2016). The effect of cross-listing on the environmental, social, and governance performance of firms. Journal of World Business 51, 977–990.
 Crifoa et al. (2017). The effect of countries’ ESG ratings on their sovereign borrowing costs. The Quarterly Review of Economics and Finance 66, 13–20.
 [A-13] Daines et al. (2010). Rating the ratings: How good are commercial governance ratings? Journal of Financial Economics 98, 439–461.
 De, I., Clayman, M., (2010). Are All Components of ESG Scores Equally Important? The Financial Professionals’ Post. http://post.nyssa.org/nyssa-news/2010/07/the- impact-of-esg-on-stock-returns-and-profitability.html.
 [A-14] Del Guercio, D., & Tkac, P. A. (2008). Star power: The effect of Morningstar ratings on mutual fund flow. Journal of Financial and Quantitative Analysis, 43(04), 907–936.
 Faizul Haque (2017). The effects of board characteristics and sustainable compensation policy on carbon performance of UK firms. The British Accounting Review 49, 347-364.
 Ferrell et al. (2016). Socially responsible firms. Journal of Financial Economics 122, 585–606.
 [A-15] Lesser et al. (2016). Socially responsible, green, and faith-based investment strategies: Screening activity matters! Finance Research Letters 16, 171–178.
 Mari a la ko a o kalo a and l na Ko ano a (2016). Composite indicator for measuring corporate sustainability. Ecological Indicators 61, 612–623.
 [A-16] Nakai, M., Yamaguchi, K., & Takeuchi, K. (2013). Sustainability membership and stock price: An empirical study using the Morningstar-SRI Index. Applied Financial Economics, 23(1), 71–77.
 Scalet, S., & Kelly, T. F. (2010). CSR rating agencies: What is their global impact? Journal of Business Ethics, 94, 69– 88.
 Statman, M., (2005). Socially Responsible Indexes: Composition and Performance. Santa Clara University, Santa Clara, CA, mimeo-graph.
ESG Investment in Mutual Fund Sector
 [A-16] Abdelsalama et al. (2014). On the comparative performance of socially responsible and Islamic mutual funds. Journal of Economic Behavior & Organization 103, S108–S128.
 aro ol r- o i nguez and uan arlos Ma alli n- a ez (2016). Socially (ir)responsible investing? The performance of the VICEX Fund from a business cycle perspective. Finance Research Letters 16, 190–195.
 Bauer, R., Koedijk, K., Otten, R., (2005). International evidence on ethical mutual fund performance and investment style. Journal of Banking and Finance 29, 1751–1767.
 Bauer, R., Derwall, J., & Otten, R. (2007). The ethical mutual fund performance debate: New evidence from Canada. Journal of Business Ethics, 70, 111–124.
 Benson, K. L., & Humphrey, J. E. (2008). Socially responsible investment funds: Investor reaction to current and past returns. Journal of Banking & Finance, 32, 1850–1859.
 [A-17] Capelle-Blancard, G., & Monjon, S. (2014). The performance of socially responsible mutual funds: Does the screening process matters. European Financial Management, 20(3), 494–520.
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 [A-18] Charfeddine et al. (2016). Socially responsible investing and Islamic funds: New perspectives for portfolio allocation. Research in International Business and Finance 36, 351–361.
 Climent, F., & Soriano, P. (2011). Green and good? The investment performance of US environmental mutual funds. Journal of Business Ethics, 103, 275–287.
 il–Bazo, ., uiz– r u , P., & Santos, A. A. P. (2010). The performance of socially responsible mutual funds: The role of fees and management companies. Journal of Business Ethics, 94, 243–263.
 Goldreyer, E. F., Ahmed, P., & Diltz, J. D. (1999). The performance of socially responsible mutual funds: Incorporating sociopolitical information in portfolio selection. Managerial Finance, 25(1), 23–36.
 Geczy, C.C., Stambaugh, R.F., Levin, D., (2003). Investing in socially responsible mutual funds. SSRN Working Paper, No. 416380.
 Hamilton, S., Jo, H., Statman, M., (1993). Doing well while doing good? The investment performance of socially responsible investment funds. Financial Analysis J. (November–December), 62–66.
 Ito, Y., Managi, S., & Matsuda, A. (2013). Performances of socially responsible investment and environmentally friendly funds. Journal of the Operational Research Society, 64, 1583–1594.
 Jin, H. H., Mitchell, O. S., & Piggott, J. (2006). Socially responsible investment in Japanese pensions. Pacific-Basin Finance Journal, 14, 427–438.
 Kreander, N., Gray, R., Power, D., & Sinclair, C. (2005). Evaluating the performance of ethical and non-ethical funds: A matched pair analysis. Journal of Business Finance and Accounting, 32, 1465–1493.
 Mar i -Ballester, Carmen-Pilar (2015). Can socially responsible investment for cleaner production improve the financial performance of Spanish pension plans? Journal of Cleaner Production 106, 466-477.
 Mallin, C., Saadouni, B., & Briston, R. (1995). The financial performance of ethical investment funds. Journal of Business Finance and Accounting, 22, 483–496.
 McLachlan, J., & Gardner, J. (2004). A comparison of socially responsible and conventional investors. Journal of Business Ethics, 52, 11–25.
 Mun oz, F., Vargas, M., & Marco, I. (2014). Environmental mutual funds: Financial performance and managerial abilities. Journal of Business Ethics, 124(4), 551–569.
 Petrilloa et al. (2016). Investing in socially responsible mutual funds: Proposal of non-financial ranking in Italian market. Research in International Business and Finance 37, 541–555.
 [A-19] Schenk, H., & Scholtens, B. (2011). Assessing SRI fund performance research: Best practices in empirical analysis. Sustainable Development, 19, 77–94.
 [A-20] Sadok El Ghoula and Aymen Karouib (2017). Does corporate social responsibility affect mutual fund performance and flows? Journal of Banking and Finance 77, 53–63.
 [A-21] Vicente, R., & Ferruz, L. (2015). Stock-picking and style-timing abilities: A comparative analysis of conventional and socially responsible mutual funds in the US market. Quantitative Finance, 15(2), 345–358.
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Traditional Investment Strategy
 Fabozzi, F. J., Gupta, F., & Markowitz, H. M. (2002). The legacy of modern portfolio theory. Journal of Investing, 11, 7–22.
 Feldstein, M. S. (1969). Mean–variance analysis in the theory of liquidity preference and portfolio selection. Review of Economic Studies, 36, 5–12.
 Markowitz, H. M. (1952). Portfolio selection. Journal of Finance, 7, 77–91.
 Markowitz, H. M. (1956). The optimization of a quadratic function subject to linear constraints. Naval Research Logistics Quarterly, 3, 111–133.
 Markowitz, H. M. (1959). Portfolio selection: Efficient diversification of investments. New York: John Wiley and Sons.
 Markowitz, H. M. (1987). Mean–variance analysis in portfolio choice and capital markets. Oxford: Basil Blackwell.
 Xidonas, P., Mavrotas, G., Krintas, T., Psarras, J., & Zopounidis, C. (Eds.). (2012). Multicriteria Portfolio Management. New York: Springer.
Portfolio Selection with ESG Criteria
 Abdelaziz, F. B., Aouni, B., & Fayedh, R. E. (2007). Multi-objective stochastic programming for portfolio selection. European Journal of Operational Research, 177, 1811–1823.
 [A-22] Ballestero, E. (2012). Socially responsible investment: A multicriteria approach to portfolio selection combining ethical and financial objectives. European Journal of Operational Research, 216, 487–494.
 [A-23] Bello, Z., (2005). Socially responsible investing and portfolio diversification. Journal of Financial Research 28 (1), 41–57.
 Bil ao- rol, ., r nas- arra, M., an al- rna ndez, V., & Bilbao-Terol, C. (2013). Selection of socially responsible portfolios using hedonic prices. Journal of Business Ethics, 115(3), 515–529.
 Bos, J. (2014). Integrating ESG factors in the investment process. January/February CFA Institute Magazine, 15-16.
 Calvo et al. (2015). Finding socially responsible portfolios close to conventional ones. International Review of Financial Analysis 40, 52–63.
 Dorfleitner, G., & Utz, S. (2012). Safety first portfolio choice based on financial and sustainability returns. European Journal of Operational Research, 221, 155–164.
 [A-24] Gasser et al. (2017). Markowitz revisited: Social portfolio engineering. European Journal of Operational Research 258, 1181–1190.
 Geczy, C.C., Stambaugh, R.F., Levin, D., (2003). Investing in socially responsible mutual funds. SSRN Working Paper, No. 416380.
 Goldreyer, E. F., Ahmed, P., & Diltz, J. D. (1999). The performance of socially responsible mutual funds: Incorporating sociopolitical information in portfolio selection. Managerial Finance, 25(1), 23–36.
 Gregor Dorfleitner and Sebastian Utz (2012). Safety first portfolio choice based on financial and sustainability returns. European Journal of Operational Research 221, 155–164.
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 Hallerbach, W., Ning, H., Soppe, A., & Spronk, J. (2004). A framework for managing a portfolio of socially responsible investments. European Journal of Operational Research, 153, 517–529.
 Hirschberger, M., Steuer, R. E., Utz, S., Wimmer, M., & Qi, Y. (2013). Computing the nondominated surface in tricriterion portfolio selection. Operations Research, 61, 169–183.
 Oikonomou (2017). Socially responsible investment portfolios: Does the optimization process matter? The British Accounting Review. Volume 50, Issue 4, June 2018, Pages 379-401
 [A-25] Renneboog, L., Horst, J. T., & Zhang, C. (2008). Socially responsible investments: Institutional aspects, performance, and investor behavior. Journal of Banking and Finance, 32, 1723–1742.
 Statman, M. (2000). Socially responsible mutual funds. Financial Analysts Journal, 56, 30–38.
 [A-26] Utz et al. (2014). Tri-criterion inverse portfolio optimization with application to socially responsible mutual funds. European Journal of Operational Research 234, 491–498.
 Xidonas, P., & Mavrotas, G. (2013). Multi-objective portfolio optimization with non-convex policy constraints: Evidence from the Eurostoxx 50. European Journal of Finance (in press).
 Zagst, R., & Po schik, M. (2008). Inverse portfolio optimization under constraints. Journal of Asset Management, 9, 239–253.
ESG Investment and Crisis
 [A-27] B h i, L., i ir i, ., alo , A., & Herzel, S. (2015). Socially responsible and conventional investment funds: Performance comparison and the global financial crisis. Applied Economics, 47(25), 2541–2562.
 [A-28] Galema, R., Plantinga, A., Scholtens, B., (2008). The stocks at stake: return and risk in socially responsible investment. Journal of Banking and Finance 32, 2646–2654.
 [A-29] John Nofsinger and Abhishek Varma (2014). Socially responsible funds and market crises. Journal of Banking & Finance 48 (2014) 180–193.
 Leite, P., & Cortez, M. C. (2015). Performance of European socially responsible funds during market crises: Evidence from France. International Review of Financial Analysis, 40, 132–141.
 [A-30] Nakai M. et al (2016). Can SRI funds better resist global financial crisis? Evidence from Japan. International Review of Financial Analysis 48, 12–20.
 [A-31] Nofsinger, J., & Varma, A. (2014). Socially responsible funds and market crises. Journal of Banking & Finance, 48, 180–193.
 Orlitzky, M., Benjamin, J.D., (2001). Corporate social performance and firm risk: a meta-analytic review. Business and Society 40, 369–396.
 Sandberg, J., Juravle, C., Hedesstro m, T.M., Hamilton, I., (2009). The heterogeneity of Socially Responsible Investment. Journal of Business Ethics 87, 519–533.
ESG Investment Rationale and Trends
 [A-32] Beal, D. J., Goyen, M., & Philips, P. (2005). Why do we invest ethically? The Journal of Investing, 14(3), 66– 78.
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 [A-33] B nabou, R., Tirole, J., (2010). Individual and corporate social responsibility. Economica 77, 1–19.
 Christophe Revelli (2017). Socially responsible investing (SRI): From mainstream to margin? Research in International Business and Finance 39, 711–717.
 Dam L. and Scholtens B. (2015). Toward a theory of responsible investing: On the economic foundations of corporate social responsibility. Resource and Energy Economics 41, 103–121.
 Eichholtz, P., Kok, N., Quigley, J.M., (2010). Doing well by doing good? Green office buildings. American Economic Review 100 (5), 2492–2509.
 Erragragui E. and Lagoarde-Segota T. (2016). Solving the SRI puzzle? A note on the mainstreaming of ethical investment. Finance Research Letters 18, 32–42.
 [A-34] Fatemi A. M. and Fooladi I. J. (2013). Sustainable finance: A new paradigm. Global Finance Journal 24, 101–113.
 Gillan, S.L., Hartzell, J.C., Koch, A., Starks, L.T., (2010), Firms’ environmental, social and governance (ESG) choices, performance and managerial motivation, Working paper, University of Texas at Austin.
 Julie Whittaker (2011). The evolution of environmentally responsible investment: An Adam Smith perspective. Ecological Economics 71, 33–41.
 Niesten et al. (2017). Sustainable collaboration: The impact of governance and institutions on sustainable performance. Journal of Cleaner Production 155, 1-6.
 [A-35] Peifer, J. L. (2011). Morality in the financial market? A look at religiously affiliated mutual funds in the USA. Socio-Economic Review, 9, 235–259.
 Posnikoff, J.F., (1997). Disinvestment from South Africa: they did well by doing good. Contemp. Econ. Policy 15, 76–86.
 Reputation Institute, (2013). The companies with the best CSR reputations in the world. Reputation Intelligence 5, 1– 22.
 Schreck, P., 2011. Reviewing the business case for corporate social responsibility: new evidence and analysis. Journal of Business Ethics 103, 167–188.
 Sakuma, K., & Louche, C. (2008). Socially responsible investment in Japan: Its mechanism and drivers. Journal of Business Ethics, 82, 425–448.
ESG in Fixed-Income Securities and Banking Sector
 Dutordoir, M., Strong, N., Ziegan, M.C., (2014). Does corporate governance influence convertible bond issuance? Journal of Corporate Finance 24, 80–100.
 Fooladi, I., Roberts, G., Skinner, F., (1997). Duration for bonds with default risk. Journal of Banking and Finance 21 (1), 1–16.
 [A-36] Hans-Martin Henke (2016). The effect of social screening on bond mutual fund performance. Journal of Banking & Finance 67, 69–84.
 Scholtens, Bert (2009). Corporate Social Responsibility in the International Banking Industry. Journal of Business Ethics. Volume 86, Issue 2, pp 159–175 | Cite as
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 [A-37] Wu, M., Shen, C., (2013). Corporate social responsibility in the banking industry: motives and financial performance. Journal of Banking and Finance 37, 3529– 3547.
Microfinance and Impact Investing
 Bruck, Connie (2006)., “Millions for Millions,” O o r 30, 2006, The New Yorker.
 Conning, Jonathan. (1999). “Outreach, Sustainability, and Leverage in Monitored and Peer Monitored Lending.” Journal of Development Economics, 60(1): 51–77
 Cull, Robert, Asli Demirgu¨c¸-Kunt, and Jonathan Morduch. (2007). “Financial Performance and Outreach: A Global Analysis of Leading Microbanks.” Economic Journal, February, 117(517): F107–F133.
 Dorfleitner, G., Leidl, M., & Reeder, J. (2012). Theory of social returns in portfolio choice with application to microfinance. Journal of Asset Management, 13, 384–400.
 [A-38] Robert Cull, Asli Demirgu¨c¸-Kunt, and Jonathan Morduch (2009). Microfinance Meets the Market. Journal of Economic Perspectives—Volume 23, Number 1—Winter 2009—Pages 167–192.
 Stiglitz, Joseph. (1990). “Peer Monitoring and Credit Markets.” Worl Bank E ono i i w, 4(3): 351–66.
 Stiglitz, Joseph, and Andrew Weiss. (1981). “Credit Rationing in Markets with Imperfect Information.” American Economic Review, 71(3): 393–410.
ESG Investing and International Trade and Macroeconomy
 [A-39] Dam, L., Heijdra, B.J., (2011). The environmental and macroeconomic effects of socially responsible investment. Journal of Economic Dynamic Control 35, 1424–1434.
 Fenga et al (2015). Equity Financing and Social Responsibility: Further International Evidence. The International Journal of Accounting 50, 247–280.
 [A-40] Gupta, S., & Goldar, B. (2005). Do stock markets penalize environment-unfriendly behavior? Evidence from India. Ecological Economics, 52, 81–95.
 Husted B. and de Sousa-Filho J. (2017). The impact of sustainability governance, country stakeholder orientation, and country risk on environmental, social, and governance performance. Journal of Cleaner Production 155, 93-102.
 [A-41] Kapil Narula (2012). ‘Sustainable Investing’ via the FDI route for sustainable development. Procedia – Social and Behavioral Sciences 37, 15 – 30.
 Leite, P., & Cortez, M. C. (2014). Style and performance of international socially responsible funds in Europe. Research in International Business and Finance, 30, 248–267.
 rillo, ., li , ., ar i a-M lo n, M., rez-Gladish, B. (2016). Investing in socially responsible mutual funds: Proposal of non-financial ranking in Italian market. Research in International Business and Finance, 37, 541– 555.
Factors Influencing Firms’ decision to adopt ESG Investing
 [A-42] Binay K. Adhikari (2016). Causal effect of analyst following on corporate social responsibility. Journal of Corporate Finance 41, 201–216.
 [A-43] Borghesi, R., Housten, J.F., Naranjo, A., (2014). Corporate socially responsible investments: CEO altruism reputation, and shareholder interests. Journal of Corporate. Finance 26, 164–181.
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 Clarkson, P.M., Li, Y., Richardson, G.D., Vasvari, F.P., (2011). Does it really pay to be green? Determinants and consequences of proactive environmental strategies. Journal of Accounting and Public Policy 30 (2), 122–144.
 Cullinan et al. (2017). Are CSR activities associated with shareholder voting in director elections and say-on-pay votes? Journal of Contemporary Accounting & Economics 13, 225–243
 Derwall, J., Koedijk, K., & Horst, J. T. (2011). A tale of values-driven and profit- seeking social investors. Journal of Banking and Finance, 35, 2137–2147.
 [A-44] Di Giuli, A., Kostovetsky, L., (2014). Are red or blue companies more likely to go green? Politics and corporate social responsibility. Journal of Financial Economics 111, 158–180.
 [A-45] Jo, H., Harjoto, M., (2014). Analyst coverage, corporate social responsibility, and firm risk. Business Ethics: A European Review 23, 272–292.
 Johnson, R.A., Greening, D.W., (1999). The effects of corporate governance and institutional ownership types on corporate social performance. Academy of Management Journal 42, 564–576.
 Heinkel, R., Kraus, A., Zechner, J., (2001). The effect of green investment on corporate behavior. Journal of Finance and Quantitative Analysis. 36, 431–449.
 Hemingway, C.A., Maclagan, P.W., (2004). Managers’ personal values as drivers of corporate social responsibility. Journal of Business Ethics 50, 33–44.
 Minor, D., Morgan, J., (2012). CSR as reputation insurance: Primum Non Nocere. California Management Review 53, 40–59.
 [A-46] Nadeem et al. (2017). Boardroom gender diversity and corporate sustainability practices: Evidence from Australian Securities Exchange listed firms. Journal of Cleaner Production 149, 874-885.
 Ortas (2015). The impact of institutional and social context on corporate environmental, social and governance performance of companies committed to voluntary corporate social responsibility initiatives. Journal of Cleaner Production 108, 673-684.
 Renneboog, L., Horst, J. T., & Zhang, C. (2011). Is ethical money financially smart? Nonfinancial attributes and money flows of socially responsible investment funds. Journal of Financial Intermediation, 20, 562–588.
ESG Investing and its Costs
 [A-47] Adler, T., & Kritzman, M. (2008). The cost of socially responsible investing. Journal of Portfolio Management, 35, 52–56.
 Bauer, R., Otten, R., & Rad, A. T. (2006). Ethical investing in Australia: Is there a financial penalty? Pacific-Basin Finance Journal, 14, 33–48.
 Bergstresser, D., Chalmers, J. M., & Tufano, P. (2009). Assessing the costs and benefits of brokers in the mutual fund industry. Review of Financial Studies, 22, 925–957.
 [A-48] Crifo et al. (2015). The price of environmental, social and governance practice disclosure: An experiment with professional private equity investors. Journal of Corporate Finance 30, 168–194.
 Diltz, D.J., (1995). The private cost of socially responsible investing. Applied Financial Economics. 5, 69–77.
 Guerard Jr., J.B., (1997a). Is there a cost to being socially responsible in investing? Journal of Investment. 6, 11–18.
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 Guerard Jr., J.B., (1997b). Additional evidence on the cost of being socially responsible in investing. Journal of Investment. 6, 31–36.
 [A-49] Halbritter G. and Dorfleitner G. (2015). The wages of social responsibility — where are they? A critical review of ESG investing. Review of Financial Economics 26, 25–35.
 Pava, M.L., Krausz, J., (1996). The association between corporate social-responsibility and financial performance: the paradox of social cost. Journal of Business Ethics. 15, 321–357.
 Renneboog, L., Horst, J. T., & Zhang, C. (2008). The price of ethics and stakeholder governance: The performance of socially responsible mutual funds. Journal of Corporate Finance, 14, 302–322.
Market Reactions for ESG Announcements/Disclosures
 Boyle, E.J., Higgins, M.M., Rhee, S.G., (1997). Stock market reaction to ethical initiatives of defense contractors. Theory and evidence. Critical Perspective on Accounting 8, 541–561.
 Gompers, P., Ishii, J., Metrick, A., (2003). Corporate governance and equity prices. Quarterly Journal of Economics. 118 (1), 107–156.
 Patten, D.M., (1990). The market reaction to social responsibility disclosures: the case of the Sullivan principles signings. Accounting, Organization, and Society. 15, 575–587.
 [A-50] Takeda, F., & Tomozawa, T. (2006). An empirical study on stock price responses to the release of the environmental management ranking in Japan. Economics Bulletin, 13(5), 1–4.
 Takeda, F., & Tomozawa, T. (2008). A change in market responses to the environmental management ranking in Japan. Ecological Economics, 67, 465–472.
ESG Investing verses Firms access to Finance/Loan/Taxes
 Cheng, B., Ioannou, I., Serafeim, G., (2014). Corporate social responsibility and access to finance. Strategic Management Journal. 35, 1–23.
 El Ghoul, S.E., Geudhami, O., Kwok, C.Y., Mishra, D.R., (2011). Does corporate social responsibility affect the cost of capital? J. Bank. Financ. 35 (9), 2388–2406.
 [A-51] Goss, A., Roberts, G., (2011). The impact of corporate social responsibility on the cost of bank loans. Journal of Banking and Finance 35, 1794–1810.
 [A-52] Hoi, C.K., Wu, Q., Zhang, H., (2013). Is corporate social responsibility (CSR) associated with tax avoidance? Evidence from irresponsible CSR activities. Accounting Review 88, 2025–2059.
 Hong, H., Kubik, J.D., Scheinkman, J.A., (2012). Financial constraints on corporate goodness. National Bureau of Economic Research Working Paper 18476.
 [A-53] Kotchen, M.J., Moon, J.J., (2012). Corporate social responsibility for irresponsibility. The B.E. Journal of Economic Analysis & Policy: Vol. 12: Iss. 1 (Contributions), Article 55.
 Lanis, R., Richardson, G.A., (2012). Corporate social responsibility and tax aggressiveness. Journal of Accounting and Public Policy 31, 86–108.