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Finance Seminar Series

4
Oct

Seminar – Investments that make our homes greener: the role of regulation

12:00 - 13:30

Dr Lakshmi Naaraayanan, Assistant Professor of Finance, London Business School

The operation of residential buildings (our homes) is responsible for roughly 22% of the global energy consumption and 17% of the CO2 emissions. We study the effects of a regulatory intervention aiming to reduce carbon emissions by requiring privately rented properties to satisfy minimum energy efficiency standards. The regulation triggered significant investments in the rental sector. However, the environmental gains were smaller, limited by the use of more polluting energy sources. Regulatory interventions that target carbon emissions directly may be more effective in tackling the climate challenge.

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18
Oct

Seminar – The ESG home bias

12:00 - 14:00

Dr Moqi Groen-Xu, Senior Lecturer, Queen Mary University of London, School of Economics and Finance

Firms shift undesirable environmental, social, and governance (ESG) activities abroad rather than avoid them altogether. We show that this is consistent with shareholder preferences: we find ESG incident returns to be less negative when they take place outside offenders’ headquarter countries. Our analysis is based on 7,209 ESG incidents involving 63 incident countries and more than 6,000 firms. We exploit events that involve firms from multiple countries to show that geographic heterogeneity in investor preferences explains variation in foreign incident returns. Foreign incident returns are (i) more negative for firms with a larger shareholder base from the incident country, (ii) less negative for firms headquartered in more patriotic countries, and (iii) more negative for firms headquartered in more environmentally friendly countries.

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