Corporate Social Responsibility and Risk: Perspectives on Materiality, Trust and Investor Preferences

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Type and Duration

FFF-Förderprojekt, June 2018 until May 2021

Coordinator

Institute for Financial Services

Main Research

Wealth Management

Field of Research

Banking and Finance

Description

This study contributes to the academic literature on CSR and ESG risk materiality. By disentangling aggregated ESG ratings according to their underlying key performance indicators (KPI) and empirically testing their industry-specific risk materiality, we intent to provide further evidence on the relevance of ESG issues on firm value through lower firm risk and the importance of accounting for materiality. Moreover, we provide additional insight on investors' preferences regarding ESG components as a way of risk management. In this respect, the results provide valuable feedback for asset managers on how to successfully identify risk material ESG criteria, but also on how to use them as a way of signalling to investors. Finally, we conclude by assessing the impact of firms' CSR activities on a countries overall level of public trust, with public trust being another key component in reducing the sensitivity to negative market shocks on a broader country level.

Principal Investigator

Project Collaborator