Environmental, Social and Governance (ESG) Analytics Lab

ESG Analytics Lab

Within the last five years, the share of total global assets under management actively weighting Environmental, Social and Governance (ESG) factors has doubled (to $30.7 Trillion or 39% of total AUM) as has the share of executives, board members, and investment managers who consider ESG issues to be material. At the same time, however, the confidence of executives, board members, and investment managers in the data available to evaluate the materiality of ESG factors has halved. ESG scores across proprietary data providers have been demonstrated to be unreliable and often lean on outdated information around relevant ESG factors—others omit pertinent factors in their scoring altogether.

The ESG Analytics Lab seeks to solve these problems by leveraging Wharton’s demonstrated expertise in analytics. We focus on developing high-quality, replicable academic research and pedagogy resulting in insights that can help current and future investors, asset managers and other ESG integrators make informed decisions.

Wharton Online Specialization

The Materiality of ESG Factors

Using insight and expertise from four esteemed Wharton faculty, the Materiality of ESG Specialization is designed to provide learners with the fundamentals and history of ESG investing, and a close examination of the set of investment approaches that are informed by environmental, social, and governance factors.

ESG in Action

The ESG Analytics Lab supports high-quality, replicable academic research on ESG integration using alternative data sources as well as producing novel pedagogy showcasing best practices among asset managers. We also partner with students and seek to influence practice and policy.

Conducting academically rigorous and practically relevant research on ESG integration.

In three published papers and two working papers, Witold Henisz, Sinziana Dorobantu and Lite Nartey demonstrate the materiality of stakeholder engagement for 19 publicly traded gold mining companies, show that positive stakeholder sentiment is particularly valuable during a crisis, and analyze different strategies for earning and maintaining stakeholder support.

⇒ Read Gold Mining Research Papers

⇒ More ESG Research

  • Professor Claudine Gartenberg analyzes the financial impact of corporate purpose as well as its determinants. She also studies the determinants of pay inequality among employees within and between firms as well as the role of social comparisons in limiting such inequality.
  • Katarzyna Odziemkowska and Witold Henisz demonstrate that managerial choices regarding their firms’ performance on ESG are a function of national societal pressure on these issues as measured by media content analysis
    • Odziemkowska, Katarzyna and Witold J. Henisz, (2020) “Web of Influence:
      National Stakeholder Networks and Corporate Social Performance” Organization Science Forthcoming.
  • Sarah Light and Steven Kimbrough are using computational text analysis of corporate disclosure documents to help justify a more rigorous standard for mandatory audited ESG disclosure.
  • Aline Gatignon studies ESG implementation among Indian firms after a government mandate and in cross-sector collaborations in emerging markets.
  • James McGlinch and Witold Henisz are integrating value-based strategy and stakeholder theory in a paper that maps ESG impacts onto intermediate accounting outcomes highlighting the differential materiality across industries and time based on structural characteristics as well as shifting stakeholder salience.
  • Chris Bruno and Witold Henisz in partnership with ESG Analytics Lab Corporate Research Sponsor the Calvert Institute are analyzing the materiality of ESG factors for municipal finance.
  • Kevin Chuah, James McGlinch and Witold Henisz are analyzing the determinants of inflows into ESG oriented mutual funds and ETFs and helping to expose the rampant greenwash (i.e., false claims regarding ESG integration) characterizing many of the offerings in this rapidly growing investment domain.
  • Witold Henisz is working to augment existing ESG metrics focused largely on voluntary corporate reporting and/or media-reported stakeholder sentiment to more tangible and science-based outcomes of relevance to stakeholders. This work highlights the financial materiality of a firms’ negative externalities imposed on stakeholders for shareholders in the future through distinct stakeholder pathways whose strength varies by industry and stakeholder salience.
  • Tony He is analyzing the strategic response of consumer product companies to ESG scandals impacting competitors’ products.
  • James McGlinch is analyzing the role of ESG for firms in financial distress including analysis of the likelihood they enter into reorganizations, the type of reorganization (i.e., Chapter 7, Chapter 11 or private reorganization) as well as the outcome of that reorganization and the firms’ subsequent economic performance.
  • Maria Gelrud and Jessica Wachter analyze the impact of climate risk for asset pricing

Expanding the scope of ESG data available to scholars affiliated with the Lab beyond the suite available through Wharton Research Data Services (e.g., MSCI-KLD, Sustainalytics, RepRisk, Ravenpack).

For access to these datasets, please contact henisz@wharton.upenn.edu.

Developing pedagogy to bring the practical challenge of ESG integration into the classroom.

We are partnering with

  • Parnassus Investments,
  • Glenmede,
  • Alliance Bernstein,
  • Record Currency Management,
  • Atlas Impact Partners and
  • Calvert

to showcase best practices in ESG integration across different asset classes and investment strategies. Enroll in Wharton’s online specialization in ESG offered via Coursera with Wharton Professors Witold Henisz, Sarah Light, Mae McDonnell, and Chris Geczy. Register Now >>

Partnering with students to support and develop their ESG integration skills through competitions, career expos, speakers, networking events and other initiatives.

Influencing practice and policy via industry-facing publications, speaking events and policymaking debates

Publications

Open Position at Wharton ESG Analytics Lab

Postdoctoral Fellowship
Location: Philadelphia, PA – USA
Starting date: July 1, 2022
Length: 1 year, renewable for a second year based on satisfactory performance evaluation

Open Positions with Wharton ESG Analytics Lab Partners

Brown Advisory logo

Brown Advisory is an independent investment management and strategic advisory firm committed to delivering a combination of first-class performance, strategic advice, and the highest level of client service.

FCLT Global logo

FCLTGlobal’s mission is to focus capital on the long term to support a sustainable and prosperous economy. We are a non-profit organization whose members are leading companies and investors worldwide that develop actionable research and tools to drive long-term value creation for savers and communities.

Fitch Ratings logo

Fitch Ratings is a leading provider of credit ratings, commentary and research. Dedicated to providing value beyond the rating through independent and prospective credit opinions, Fitch Ratings offers global perspectives shaped by strong local market experience and credit market expertise.

Longevity Partners logo

Longevity Partners is a multi-disciplinary energy and sustainability consultancy and investment business. Established in 2015 to support the transition to a low carbon economy in the UK, Europe and worldwide, we have since grown to a multi-million leading advisory firm with offices in London, Paris, Amsterdam, Munich, New York, Austin, San Francisco and Milan.

Ramboll Logo

Ramboll is a global engineering, architecture and consultancy company founded in Denmark in 1945. Our 16,000 experts create sustainable solutions across Buildings, Transport, Water, Environment & Health, Architecture, Landscape & Urbanism, Energy and Management Consulting.

TIAA logo

TIAA started out over 100 years ago to help ensure teachers could retire with dignity. Today, many people who work at not-for-profits rely on our wide range of financial products and services to support and strengthen their financial well-being.

Walking the Talk:
Valuing a Multi-Stakeholder Strategy

A new study, published by FCLTGlobal and the ESG Analytics Lab, analyzes the annual reports of over 3,000 global companies (drawn from MSCI’s All Country World Index) to look for stakeholder-oriented language, and compares the presence of that language with financial, environmental, social, and governance (ESG) outcomes.

The data shows that if all the companies in the study performed like the top tercile, they would have generated a collective $2.9 trillion in additional firm value between 2010-2020.

In the News

Stay up to date on ESG Analytics at the Wharton School.

Claudine Gartenberg

Witold Henisz

Beyond Business Image

The COVID crisis has further emphasized the inequalities between different professions, classes, racial groups, and nationalities. Witold J. Henisz, Deloitte & Touche Professor of Management and founder of the Wharton ESG Analytics Lab joined Dean Erika James to discuss how the industry can minimize harm and be a positive force in addressing these challenges.

Humanizing ESG

Why Diversity, Wage Inequality, and Workers Rights Deserve Our Attention

Corporate Partnership Program

The ESG Lab connects corporate partners with our four pillars of work

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Nimble and Accurate ESG Valuation

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Comprehensive, Transparent and Objective Rankings

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Thought Partnership for Innovative Research

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Building a Talent Pipeline of Future ESG Leaders

Our Partners

The Bay & Paul Foundations logo
Calvert Institute logo
Children's Investment Fund Foundation logo
Northern Trust Logo
Research Council of Norway Logo
TIAA logo
Brown Advisory logo
Diligent Institute Logo
Engine No 1 Logo
Bank of America logo
Principles for Responsible Investment logo
FCLT Global logo
Penn Global Logo
Wharton Logo

A New Way of Seeing Value: Introducing the Engine No. 1 Total Value Framework

Investors shouldn’t have to choose between a portfolio’s long-term financial return and its positive global impact. Enter: The Engine No. 1 Total Value Framework, which directly ties environmental, social, and governance impacts to financial value creation.

Co-authored by Witold J. Henisz, Deloitte & Touche Professor of Management and founder of the Wharton ESG Analytics Lab, this white paper takes a data-driven approach that integrates non-traditional but financially material ESG data, methods, and systems into traditional analysis.

The Team

Our team of faculty and doctoral students are advancing the frontier of ESG Analytics.

Faculty

Carolyn Deller
Assistant Professor of Accounting

Emilie Feldman
Associate Professor of Management

Claudine Gartenberg
Assistant Professor of Management

Aline Gatignon
Assistant Professor of Management

Witold Henisz
Deloitte & Touche Professor of Management

Chris Ittner
EY Professor of Accounting

Benjamin Keys
Rowan Family Foundation Associate Professor; Associate Professor of Real Estate

Steve Kimbrough
Professor of Operations, Information and Decisions

Sarah Light
Associate Professor of Legal Studies & Business Ethics

Mary Hunter McDonnell
Associate Professor of Management

Philip Nichols
Joseph Kolodny Professor of Social Responsibility in Business; Professor of Legal Studies & Business Ethics

Eric W. Orts
Faculty Director, Initiative for Global Environmental Leadership; Guardsmark Professor of Legal Studies and Business Ethics

Deborah Small
Laura and John J. Pomerantz Professor of Marketing; Professor of Psychology

Jessica Wachter
Dr. Bruce I. Jacobs Professor in Quantitative Finance

Tyler Wry
Associate Professor of Management

Visiting Scholars

Kevin Chuah
Doctoral Candidate in Strategy & Entrepreneurship, London Business School

Rachelle Sampson
Professor of Logistics, Business and Public Policy, University of Maryland

Doctoral Students

Aymeric Bellon
Doctoral Candidate, Finance Department

Chris Bruno
Doctoral Student, Management Department

Samantha Darnell
Doctoral Student, Management Department

Maria Gelrud
Doctoral Student, Finance Department

Tony He
Doctoral Student, Applied Economics

James McGlinch
Doctoral Student, Management Department

Philip Mulder
Doctoral Student, Applied Economics