Search Results

You are looking at 1 - 10 of 11 items for :

  • "ESG indicator" x
Clear All
Dalya Elmalt, Mr. Divya Kirti, and Ms. Deniz O Igan
As climate change looms larger, many look to sustainable investing that incorporates environmental, social, and governance (ESG) concerns as part of the way forward. To assess scope for ESG-conscious investing to achieve climate change goals, we explore the link between emissions growth and ESG scores using firm-level data for the largest emitters around the world. Discouragingly, our analysis uncovers at best a weak relationship: firms with better ESG scores do display somewhat slower emissions growth but this link is substantially attenuated and no longer statistically significant if we limit attention to within-country or within-firm variation. Our findings suggest limited scope for sustainable investing strategies conditioned solely on ESG indicators to meaningfully help mitigate climate change and, more broadly, underscore the need to continue to build consensus towards effective economy-wide policies to address climate change.
Dalya Elmalt, Mr. Divya Kirti, and Ms. Deniz O Igan

than listed firms in other industries. 3 In principle, concerned investors wishing to shift production incentives for these large investor-owned emitters could strongly condition their investment decisions on ESG indicators ( Oehmke & Opp 2020 ). 4 A basic prerequisite for such a strategy to be effective is that changes in these firms’ contributions to climate change need to be reflected in ESG scores. Large emitters that cut—or promise to cut—their emissions would then receive high ESG scores, attract fresh investments from ESG investors, and lower their cost of

Dalya Elmalt, Mr. Divya Kirti, and Ms. Deniz O Igan

substantially attenuated and no longer statistically significant if we limit attention to within-country or within-firm variation. Our findings suggest limited scope for sustainable investing strategies conditioned solely on ESG indicators to meaningfully help mitigate climate change and, more broadly, underscore the need to continue to build consensus towards effective economy-wide policies to address climate change. JEL Classification Numbers: G30, Q54 Keywords: Sustainable investing, ESG, major upstream emitters, climate change Authors’ E-Mail Addresses: delmalt

Mr. Adil Mohommad
The employment impact of environmental policies is an important question for policy makers. We examine the effect of increasing the stringency of environmental policy across a broad set of policies on firms’ labor demand, in a novel identification approach using Worldscope data from 31 countries on firm-level CO2 emissions. Drawing on evidence from as many as 5300 firms over 15 years and the OECD environmental policy stringency (EPS) index, it finds that high emission-intensity firms reduce labor demand upon impact as EPS is tightened, whereas low emission-intensity firms increase labor demand, indicating a reallocation of employment. Moreover, tightening EPS during economic contractions appears to have a positive effect on employment, other things equal. Quantifications exercises show modest positive net changes in employment for market-based policies, and modest negative net changes for non-market policies (mainly emission quantity regulations) and for the combined aggregate EPS. Within market-based policies, the percent decline in employment in high-emission firms (correspondingly the increase in low-emission firms) for a unit change in a policy index is smallest (largest) for trading schemes (“green” certificates, and “white” certificates)—although stringency is not comparable across indices. Finally, the employment effects of EPS are not persistent.
Mr. Adil Mohommad

using Worldscope data as opposed to other firm level databases such as Orbis, is the availability of firm-level CO2 emissions data, available in Worldscope environmental-social-governance (ESG) indicators suite. We use data on total CO2-equivalent emissions (in tons per year), which includes a firm’s direct as well as indirect (upstream) emissions, scaled by total employment of the firm to obtain emission intensity. 12 Employment and CO2 emission data reporting is somewhat limited among Worldscope firms. Only a subset of the original set of more than 42,000 firms

Jiaxiong Yao and Mr. Yunhui Zhao

limited impact on carbon emissions. For example, Ehlers, Mojon, and Packer (2020) find that green bond projects have not necessarily translated into comparatively low or falling carbon emissions at the firm level. Another example of green finance is the environmental, social, and governance (ESG) investing, as discussed by IMF (2019) , Krueger, Sautner, and Starks (2020) , Matos (2020) , Starks (2020) , Hong, Wang, and Yang (2021) . However, Elmalt, Igan, and Kirti (2021) find limited scope for sustainable investing strategies conditioned solely on ESG

Jiaxiong Yao and Mr. Yunhui Zhao
To reach the global net-zero goal, the level of carbon emissions has to fall substantially at speed rarely seen in history, highlighting the need to identify structural breaks in carbon emission patterns and understand forces that could bring about such breaks. In this paper, we identify and analyze structural breaks using machine learning methodologies. We find that downward trend shifts in carbon emissions since 1965 are rare, and most trend shifts are associated with non-climate structural factors (such as a change in the economic structure) rather than with climate policies. While we do not explicitly analyze the optimal mix between climate and non-climate policies, our findings highlight the importance of the nonclimate policies in reducing carbon emissions. On the methodology front, our paper contributes to the climate toolbox by identifying country-specific structural breaks in emissions for top 20 emitters based on a user-friendly machine-learning tool and interpreting the results using a decomposition of carbon emission ( Kaya Identity).
Mr. James Knight and Bill Northfield

, credit rating agencies, multilateral institutions and commercial banks are increasingly integrating Environmental, Social and Governance (ESG) factors into their material credit-risk assessments and fixed-income investment strategies. As a consequence, the DMU continues to gather data, insights and knowledge on ESG indicators, to meaningfully engage with the investor community on sustainability issues and impact investing. This includes understanding the approach investors use to assess and manage ESG risks and opportunities in their portfolios, monitoring growth of

International Monetary Fund. Western Hemisphere Dept.

. Uruguay has distinct structural strengths relative to peers . It has strong governance and institutions, political stability, a high degree of social cohesion, as well as low rates of poverty, inequality, and informality. Its citizens enjoy a strong safety net and adequate protection of their rights. Overall, Uruguay is one of the top performers on many environmental, social, and governance (ESG) indicators (the WB Sovereign ESG data framework). Gini Coefficient 1/ Source: WBWDI. 1/ For Uruguay, the data are for 2017. The latest available data for other

Mr. James Knight and Bill Northfield
This paper defines sovereign investor relations (IR) and places it in the context of modern debt management theory. It highlights the role that improvements in IR and debt transparency can play in improving the cost-risk tradeoff in debt management, supporting market access and acting as a first line of defense in times of crisis. It sets out a policy framework and institutional arrangements for effective IR, as well as discussing the various practices, publications and strategies that underpin an IR program.