主题：Limits of Equilibrium ESG Investing

报告人：Christoph H. LOCH, Professor of Operations and Technology Management, University of Cambridge; Visiting Professor, PHBS in Shenzhen

主持人：

Jim DAI, Dean, School of Data Science, CUHK-Shenzhen

Zizhuo WANG, Professor & Associate Dean (Education), School of Data Science, CUHK-Shenzhen

日期：14 November (Tuesday), 2023

时间：11:00 AM - 12:00 PM, Beijing Time

形式：Hybrid

地点：103Meeting Room, Daoyuan Building

SDS视频号直播：

语言：English

摘要：

We present an equilibrium model of Environmental, Social, and Governance (ESG) investing. Our model approaches ESG investing - a process that fuses environmental and social considerations with investment of financial capital - from the point of view of an owner/manager, rather than a benevolent investor. Specifically, we model an economy in which risk averse owners/managers of projects with both a risky financial return and a private non-pecuniary ESG benefit seek funding from risk neutral competitive investors. Investors maximize expected profits; for them ESG is neither profit nor cost generating, just an additional source of noise in the context of a risky project. In equilibrium, investors place a limit on ESG-related managerial actions as a way to extract a better signal about the project’s financial return. The owner/manager agrees to the ESG limit in order to get the project funded. The key insight from our model is that rational financial investors will, in order to gain information, tend to limit managerial actions on ESG rather than support them. Reducing information asymmetry about the project’s ESG characteristics relaxes the limit on optimal ESG investing.

简介：

Professor Christoph H. Loch was the Dean of Cambridge Judge Business School (CJBS) from 2011-2021 and now is Professor of Operations and Technology Management at CJBS as well as visiting professor at PHBS in Shenzhen. Professor Loch’s expertise is in the management of innovation, including innovation portfolios, project management, and the motivation of professional employees. He will start a term as the Editor-in-Chief of Management Science in January 2024.