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 ESG scores across proprietary data providers have been demonstrated to be unreliable and often lean on outdated information around relevant ESG factors—others omit pertinent factors in their scoring altogether.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.

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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.

RESEARCH

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

Witold Henisz, Sinziana Dorobantu, Lite Nartey (2014), Spinning Gold: The Financial and Operational Returns to External Stakeholder
Engagement, Strategic Management Journal, 35 (12), pp. 1727-1748. 10.1002/smj.2180
Sinziana Dorobantu, Witold Henisz, Lite Nartey (2017), Not All Sparks Light a Fire: Stakeholder and Shareholder Reactions to Critical Events in Contested Markets, Administrative Science Quarterly, 62 (3), pp. 561-597.
Lite Nartey, Witold Henisz, Sinziana Dorobantu (2018), Status Climbing Versus Bridging: Multinational Stakeholder Engagement Strategies, Strategy Science, 3 (2), pp. 367-392.
Lite Nartey, Sinziana Dorobantu, Witold Henisz, A Participatory Approach to Stakeholder Engagement: Defining a Hierarchy of Strategic Action.
Sinziana Dorobantu, Witold Henisz, Lite Nartey, Proactive Stakeholder Engagement and Stakeholder Preferences for Firm Investments.

Featured Research

Benjamin Keys and Philip Mulder assess the impact of climate change on the price of low lying real estate in Florida
Carolyn Deller and Chris Ittner analyze the link between enterprise risk management, governance and ESG performance
Aymeric Bellon analyzes the environmental impact of private equity ownership

⇒ 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

DATA

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.

PEDAGOGY

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 >>

STUDENTS

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

PRACTICE & POLICY

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

Publications

Events

Policy

Research independently cited in five comments to DOL ESG Rulemaking process

Wealth Tax

CAREERS

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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 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.

Brown Advisory Careers

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.

FCLTGlobal Careers

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.

Fitch Ratings Careers

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.

Longevity Partners Careers

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.

Ramboll Careers

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.

TIAA Careers

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.

View Report

In the News

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.