Title: ESG transparency and investment: Signaling and the power of social responsibility on performance
Authors: Isabel Catalina Figuerola-Ferretti Garrigues - Universidad Pontificia Comillas (Spain)
Alvaro Santos Moreno - Bankia (Spain)
Ramon Bermejo Climent - Universidad Pontificia Comillas (Madrid, Spain) (Spain) [presenting]
Abstract: The impact of Environmental Social and Governance (ESG) disclosure in corporate equity performance is illustrated. Over the past decade there has been an increasing concern about the ethical impact of investment decisions. Hence, ESG factors have gained increased relevance in the corporate management process. We use an extensive data set of European ESG disclosure scores to demonstrate that ESG investing is associated with improved stock performance. Using a sample covering the 2005-2016 period of European Corporate and ESG compliance data a factor analysis demonstrate that ESG compliance scores become highly important in the asset allocation process.