Honors Program Theses
Award/Availability
Open Access Honors Program Thesis
First Advisor
Ryan Flugum
Keywords
Business--Moral and ethical aspects;
Abstract
In recent years, there has been an uproar of the term “ESG” to describe a firm’s risk on the environmental, social, and governmental aspects of their business. The term/concept was not new, per se, as it was referred to in other ways, such as “Triple Bottom Line,” PPP (People, Planet, Profit, SRI (Socially Responsible Investing (SRI), etc. With the recent traction, consumers as well as stakeholders, have become more concerned with how their business is being managed, especially in terms of environmental, social, and governance issues. While companies utilize many practices to promote the framework and subsequently add value to their business, most involve renewable energy, diversity and inclusion initiatives, ethical governance practices, etc. Around the globe, corporations allocate billions of dollars to promoting their tactics that make their business ‘green.’ These tactics raise the question of whether such initiatives lead to increased shareholder value, or if they are merely superficial tactics that will make the company look more appealing to investors.
As a framework, ESG is designed to focus on improving a company’s reputation solely through promotion and on driving the implementation of tactics that lead to improved sustainability. One outlet for companies to promote their perceived initiatives is through quarterly earnings transcripts. In recent years, companies have increased their emphasis of the ESG framework in their transcripts using specific buzzwords like ‘health,’ ‘environment,’ and ‘sustainable.’ It is important to distinguish whether the emphasis of ESG terms of a company is focused more on company branding rather than tangible improvements.
In this study, I will explore the relationship between the frequency of references to sustainability and ESG initiatives in earnings call transcripts and future stock returns of Dow Jones constituents. Through my analyses, I will be able to answer whether the spotlight is valuable to shareholders in the form of improved earnings. Due to the substantial capital that companies allocate towards making their firm look attractive in a sustainable sense to investors, it is important to realize if these terms are superficial embellishments or telling of future performance.
Year of Submission
2024
Department
Department of Finance
University Honors Designation
A thesis submitted in partial fulfillment of the requirements for the designation University Honors
Date Original
12-2024
Object Description
1 PDF (14 pages)
Copyright
©2024 Reagan Lommell
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Language
en
File Format
application/pdf
Recommended Citation
Lommell, Reagan, "Impact of ESG Initiatives on Stock Returns" (2024). Honors Program Theses. 955.
https://scholarworks.uni.edu/hpt/955
