IDEAS home Printed from https://ideas.repec.org/a/taf/eurjfi/v27y2021i16p1669-1683.html
   My bibliography  Save this article

Modeling demand for ESG

Author

Listed:
  • Muhammad Farid Ahmed
  • Yang Gao
  • Stephen Satchell

Abstract

Existing approaches have considered characteristics of Environmental, Social and Corporate Governance (ESG) focused investments from a return-oriented perspective without paying due consideration to investors’ utility and how ESG features impact utility. We contribute to this literature by providing a model that captures the implications for investment if ESG is valued by the investor as well as wealth. We first present the necessary theory and discuss the rather challenging problem of calibration of the various risk and preference parameters. Using Thomson Reuters ESG data from 2002 to 2018, we provide further empirical evidence that investors who value ESG factors have improved utility which does not come at the cost of return performance.

Suggested Citation

  • Muhammad Farid Ahmed & Yang Gao & Stephen Satchell, 2021. "Modeling demand for ESG," The European Journal of Finance, Taylor & Francis Journals, vol. 27(16), pages 1669-1683, November.
    • Handle: RePEc:taf:eurjfi:v:27:y:2021:i:16:p:1669-1683
    DOI: 10.1080/1351847X.2021.1924216
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1351847X.2021.1924216
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1351847X.2021.1924216?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pavel Ciaian & Andrej Cupak & Pirmin Fessler & d'Artis Kancs, 2022. "Environmental-Social-Governance Preferences and the Holding of Crypto-Assets," EERI Research Paper Series EERI RP 2022/07, Economics and Econometrics Research Institute (EERI), Brussels.
    2. Özge Sahin & Karoline Bax & Claudia Czado & Sandra Paterlini, 2022. "Environmental, Social, Governance scores and the Missing pillar—Why does missing information matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1782-1798, September.
    3. Pavel Ciaian & Andrej Cupak & Pirmin Fessler & d’Artis Kancs, 2022. "Environmental and Social Preferences and Investments in Crypto-Assets," JRC Research Reports JRC129919, Joint Research Centre.
    4. Gao, Yang & Ling, Yun & Peng, Hui, 2024. "Before thrive, first survive: The impact of controlling shareholder pledging on corporate ESG performance," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    5. Tiago Cruz Gonçalves & João Dias & Victor Barros, 2022. "Sustainability Performance and the Cost of Capital," IJFS, MDPI, vol. 10(3), pages 1-32, August.
    6. Radu-Alexandru Șerban & Diana Marieta Mihaiu & Mihai Țichindelean, 2022. "Environment, Social, and Governance Score and Value Added Impacts on Market Capitalization: A Sectoral-Based Approach," Sustainability, MDPI, vol. 14(4), pages 1-25, February.
    7. Hassan, M. Kabir & Chiaramonte, Laura & Dreassi, Alberto & Paltrinieri, Andrea & Piserà, Stefano, 2022. "The religious fringe of Corporate Social Responsibility," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 243-265.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:eurjfi:v:27:y:2021:i:16:p:1669-1683. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REJF20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.