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Article
Publication date: 20 August 2018

Amelia Bilbao-Terol, Mar Arenas-Parra, Susana Alvarez-Otero and Verónica Cañal-Fernández

Corporate social responsibility (CSR) rating agencies have arisen with the aim of providing external and reliable information about business behaviour. The purpose of this paper…

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Abstract

Purpose

Corporate social responsibility (CSR) rating agencies have arisen with the aim of providing external and reliable information about business behaviour. The purpose of this paper is to present a multi-criteria methodology for integrating CSR valuations with the financial performance of companies in a unique measure of global sustainability performance.

Design/methodology/approach

The authors present a hybrid TOPSIS methodology on transformed scores of both the CSR valuations and the financial ratios. The “attribute-specific evaluation” approach into Multi-attribute Prospect Theory (PT) has been applied and the Design of Experiments (DoE) is used with the TOPSIS value of the firm as the response variable.

Findings

The proposal has been applied to 118 companies evaluated by Vigeo and Covalence CSR agencies. The authors also have considered five financial ratios of the companies in order to assess their financial performance. Consistent aggregation for firms has been achieved. Relationships between the different rankings, both those of Vigeo and Covalence and the ones constructed in this research, have been analysed. All top 10 Global sustainable firms rank among the top 10 positions in at least one of the remaining rankings. The results show that Vigeo and Covalence provide different information about the CSR behaviour of the companies.

Research limitations/implications

Another interesting question is to study the discrepancies between Vigeo and Covalence, for example, in which areas there is the greatest divergence between the two agencies and what could be the reasons for this.

Practical implications

The results of this research could be of interest for both investors who want a global picture of companies in their selection process and stakeholders concerned with CSR issues who want to take advantage of different CSR ratings.

Originality/value

The application of PT softens the compensatory behaviour of the classical TOPSIS that may prove unsuitable for social evaluation. The DoE allows the aggregation of the weight sets from various decision markers. The combined methodology facilitates the scoring of new firms and the rank reversal problem can be mitigated with this methodology.

Details

Management Decision, vol. 57 no. 2
Type: Research Article
ISSN: 0025-1747

Keywords

Available. Open Access. Open Access
Article
Publication date: 18 November 2024

Susana Martinez-Meyers, Idoya Ferrero-Ferrero and María Jesús Muñoz-Torres

The aim of this paper is to evaluate the impact of the sustainable financial disclosure regulation (SFDR) on the environmental, social and governance (ESG) performance and risk…

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Abstract

Purpose

The aim of this paper is to evaluate the impact of the sustainable financial disclosure regulation (SFDR) on the environmental, social and governance (ESG) performance and risk scores of sustainable funds (SFs) from a multi-regional perspective.

Design/methodology/approach

This research involves conducting a comparative study between self-labeled SFs and conventional funds of the same mutual fund company matched using a five-step process. Using the SFDR publication as a natural study, this study uses panel data methodology on a portfolio ESG score database before SFDR implementation and three to six months post-SFDR Level 1 requirement to measure the impact.

Findings

The findings provide evidence of a clear reduction in ESG risk and an improvement in ESG performance across all samples and ESG dimensions following the SFDR regulation. In addition, the results reveal a positive spillover effect of the regulation on conventional funds following its implementation.

Research limitations/implications

The study can be helpful for fund managers, investors and regulators as it provides insights into the impact of mandatory ESG disclosure regulation on the global fund investment market. The study is limited by data availability due to the restrictive matching approach used, which starts with fund pairs from the same fund management company.

Practical implications

The study can be helpful for fund managers, investors and regulators as it provides insights into the impact of mandatory ESG disclosure regulation on the global fund investment market.

Originality/value

To the best of the authors’ knowledge, there is a lack of research papers that analyze the impact of the SFDR mandatory regulation as a driving force on the ESG scores of the fund market using the same fund management matched pair approach. This paper tests the importance of the investment area through a multi-regional approach to study potential “spillover” effects.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

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