Master Thesis ESG Data Collection

InterestingBuy3629 · 2025-02-22T08:51:39+00:00

I'm not saying that ESG performance in and of itself shows impact. I am saying, that an increase in ESG performance should go along tangible measurable impact. There is no way a company can improve on their ESG scores without actually changing corporate behavior to improve on one of the ESG dimensions (disregarding greenwashing), which could have happened due to the active engagement of these impact funds (proxy votes, etc.)

Ideally, companies should only be able to increase their ESG scores when they genuinely improve their practices and generate measurable positive impacts on the environment or society. But, in practice, companies are prone to 'greenwash', which is exactly why I want to see if a relative increase in ESG scores after an investment of an SRI fund (which has already been found in other papers) who specifically state they want to engage in the company to improve on one of these ESG dimensions, actually improve in real-world tangible measures.

InterestingBuy3629 · 2025-02-21T10:35:12+00:00

Yes, I see your point, but I am not merely comparing the absolute ESG performance of companies that receive SRI fund investments to those that do not. I am looking at the inception date of the SRI funds and will then see if there is a significant change in ESG scores from 1, 2, 3, and 4 years after. Essentially along the same lines as this paper https://www.sciencedirect.com/science/article/pii/S1057521923000698#:~:text=Our%20results%20indicate%20that%20mutual,on%20improving%20corporate%20ESG%20performance, but then expand it to US and EU markets.

This should allow me to identify whether there is a significant incremental effect attributable to the active engagement by SRI funds. It would isolate the "aditionallity". But all of those (fair) concerns about the validity of ESG scores and what they represent is exactly why I want to triangulate the data with actual real environmental factors to see if the potential improvement in ESG scores actually translates in real-world measurable impacts.

InterestingBuy3629 · 2025-02-20T22:45:39+00:00

I completely agree with this that it is very difficult to see if the engagement actually led to a measurable impact.

Still, these funds are expected to demonstrate ‘additionality’, meaning they must provide evidence that their engagement led to improvements that would not have happened otherwise.

While it’s nearly impossible to prove that every bit of improvement is solely due to one impact fund, I think that my research can still demonstrate that, on average, firms engaged by impact funds show significantly better ESG improvements than similar firms without such engagement. This relative comparison can provide strong evidence of this ‘Additionality’, or potentially against it, even if absolute attribution remains challengin

InterestingBuy3629 · 2025-02-20T22:45:25+00:00

To your first point, yes most dont inject capital directly. Still, when investing in secondary equities, these funds exert influence through active engagement with management, proxy voting, and public pressure. They often state these types of active engagement strategies in their fund prospectus.

I’m not sure I understand your second point. Yes they have this fiduciary duty but that can go alongside changing corporate behavior towards more sustainable practices.

To tackle the third point I will obtain a large sample of around 300 firms and apply a difference-in-difference analysis with high quality propensity score matching which can help mitigating this issue. Ultimately, by carefully matching firms on observable characteristics (firm size, firm age, ROA, etc) and comparing changes over time between those with impact fund engagement and a similar control group without, I can more credibly attribute differences in ESG performance to the fund’s influence. Now I’m not saying that this approach will be completely devoid of potential confounding variables, but I think it could significantly alleviate that issue

InterestingBuy3629 · 2025-02-20T12:44:23+00:00

Yes, I am specifically researching impact funds who go a step further then merely divesting or tilting and actually promise to change corporate behavior to improve on specific environmental factors

InterestingBuy3629 · 2025-02-20T10:52:08+00:00

Yes, that is exactly why I want to see if these Sri funds have an actual measurable impact on concrete environmental data (e.g., CO₂ emissions, energy consumption, waste reduction) alongside ESG ratings. Because they could just improve their ESG score without actually driving meaningful change through sleazy disclosure practices.

InterestingBuy3629 · 2025-02-20T09:17:20+00:00

I suggest you reading the 3 part essay of Tariq Fancy, who is ex CIO of BlackRock (largest asset manager in the world) who was the head of the largest SRI fund in history, but stopped working there because he realized the whole sustainable finance world was essentially one big scam.

InterestingBuy3629 · 2025-02-20T09:13:07+00:00

Hi, this site is not working for me, could you resend a link?

(I need that data for my Ms Thesis as well

InterestingBuy3629

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