Does ESG Affect the Stability of Dividend Policies in Europe?

Matos, Pedro; Barros, Victor; Sarmento, Joaquim Miranda

doi:10.3390/su12218804

Cited by 47 publications

(64 citation statements)

References 63 publications

(87 reference statements)

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“…Verga Matos et al [11] extend these conclusions by providing evidence that more sustainable firms will engage better with long term objectives of shareholders and remaining stakeholders, by means of a more stable dividend payout. The authors use data from Stoxx Euro 600 firms.…”

Section: Literature Reviewmentioning

confidence: 83%

Risk and Performance of European Green and Conventional Funds

2021

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This paper analyzes how the risk-adjusted returns of green funds compare to those of conventional funds, between the years 2005 and 2020 for the European Union countries. Additionally, we tested how the performance of green funds correlates to the business cycle, subdividing their performance through expansionary and recessionary times. The findings are summarized as follows: our regression results demonstrated green and conventional funds exhibiting negative abnormal adjusted-returns against the developed world market benchmark for the single-factor and multifactor models. For the European market benchmark, we found environmental mutual funds presenting a positive performance for both models and conventional funds displaying negative results for the single-factor model and positive results for the multifactor model. The factor loadings for green funds indicated a negative load on momentum, book-to-market (HML) and size (SMB) factors, revealing a higher exposure to big and value companies. Subsampling per business cycle exhibited green mutual funds providing higher risk-adjusted returns to investors during crisis periods and mixed results for the non-crisis periods.

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Section: Literature Reviewmentioning

confidence: 83%

Risk and Performance of European Green and Conventional Funds

2021

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“…Several articles have found that well-performing firms tend to pay higher dividends (A. Hendijani Zadeh, 2020;Limkriangkrai et al, 2017;Verga Matos et al, 2020). It is unclear, therefore, the use of dividends in case of non-mandatory disclosure concerning mandatory.…”

Section: Discussionmentioning

confidence: 99%

Carbon Boards and Transition Risk: Explicit and Implicit exposure implications for Total Stock Returns and Dividend Payouts

Submitter¹,

Mazzarano

Guastella

et al. 2021

SSRN Journal

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The Security and Exchange Commission (SEC) has considered climate change as a risk issue since 2010. Several emission disclosure initiatives exist aimed at informing investors about the financial risks associated with a zero or low carbon transition. Stricter regulations, particularly in a few sectors, could affect operations costs, ultimately impacting companies financial performances, especially of listed companies. There are two ways these companies can disclose their transition risk exposure and are not alternatives. One is the explicit declaration of exposure to transition risk in the legally binding documents that listed companies must provide authorities. The other is the disclosure of GHG equivalent emissions, which is implicitly associated with transition risk exposure. This paper empirically analyses to what extent US companies stock returns incorporate information about transition risk by using explicit and implicit risk measures and comparing them. In addition, multiple total stock return measures distinguishing dividend payouts from simple stock returns. Results suggest that both explicit and implicit risks are positively related to dividend payouts and not to stock returns, while the overall effect on total stock returns is negative. Evidence supports the view that market operators price negatively the transition risk exposure and, probably as a consequence, boards in carbon intensive companies use dividend policies to attract investment in risky companies.

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“…Institutional investors often associate ESG performance with high-quality risk management (Salama et al, 2011). Overall, ESG scores are known for positively impacting financial risk (Matos et al, 2020) and long-term risk-adjusted returns (Borgers et al, 2015;Shrivastava et al, 2019). ESG practices and disclosures improve financial and reputational risk with investors (Weber, 2014) by enhancing brand loyalty, reducing the cost of capital, maintaining social acceptance, and improving revenues and returns (Arayssi et al, 2020;Camilleri, 2015;Salama et al, 2011).…”

Section: Deductive Content Analysismentioning

confidence: 99%

Sustainability in Private Capital Investing: A Systematic Literature Review

Mirza¹,

Dordi²,

Alguindigue³

et al. 2023

JMS

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The private capital asset class has grown to over $10 trillion in assets under management and has significant potential to contribute to environmental, social, and governance (ESG) goals. However, there is a dearth of academic research about ESG with regards to private capital investing. This literature review adopted a mixed-methods approach, combining a quantitative (bibliometric) analysis with a qualitative review of the articles. It was found that less than 1% of the literature, written in English, between 1960-2020 on private equity and venture capital addresses topics related to sustainability. It was also observed that the 46 papers which address sustainability topics can be categorized into 13 themes, including certifications and standards, impact investing, and corporate social responsibility. Investment in private securities grew at twice the rate as public securities during the end of this time-period and interest in sustainability integration in private capital investing is growing. Incentives for private equity and venture firms to engage with sustainable investments are being driven by institutional investors, such as pension funds and insurance companies. The focus of sustainability research has typically been on public markets, hindering the potential of private capital investment to influence sustainable policy and practices. The objective of this paper is to provide evidence of the dearth of academic literature on the topic of private capital markets and sustainable investment, while identifying current themes in the existing literature so that future work may address gaps in research.

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Does ESG Affect the Stability of Dividend Policies in Europe?

Cited by 47 publications

References 63 publications

Risk and Performance of European Green and Conventional Funds

Risk and Performance of European Green and Conventional Funds

Carbon Boards and Transition Risk: Explicit and Implicit exposure implications for Total Stock Returns and Dividend Payouts

Sustainability in Private Capital Investing: A Systematic Literature Review

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