ESG and Capital Market Requirements

📌 Key facts

• 📌 Key facts
• 💡 Background
• 🦾Who We Are
• 🎯 Goals
• 🎓 Profile
• 📚 Further Reading
• 📄 Requirements to any Work
• 📝 How to Apply

💡 Background

ESG is the abbreviation for environmental, social and governance (ESG) ratings of companies which responsible investors increasingly assess stocks in their portfolios based on nonfinancial data on environmental impact (e.g., carbon emissions), social impact (e.g., employee satisfaction), and governance attributes (e.g., board structure) (Matos, 2020). Although there are taxonomies like the one from the European Commission (2023) and studies show that environmental ratings from three out of four ESG data providers are significantly related to that EU Taxonomy (Dumrose et al., 2020), it still leads to the conclusion that there is still potential for reducing measurement divergence between ESG indicators that has not yet fully materialised.

On the financial site, while former findings showed that for example in the period between 1991 and 2012 in the U.S. market, there were no significant abnormal returns by trading a difference portfolio of high and low rated firms with regard to ESG aspects (Halbritter et al., 2015), it would be interesting to test if this is also a result today and/or in Germany. Because in a recent analysis (S&P Global, 2022) for the U.S. market, there was a bigger difference visible: While throughout 2019 the S&P 500 and the S&P 500 ESG index had similar performances, by the fourth quarter of 2020, the S&P 500 ESG index began to steadily outperform the normal S&P 500 by four points on average.

That is why this thesis or project should answer most of the research questions listed below in the “Goals” tab, answering which new ESG reporting requirements exist for companies, how these ratings are measured and reported by these firms and how the best practices of innovative ESG companies look like.

🦾Who We Are

The Chair for Strategy and Organization is focused on research with impact. This means we do not want to repeat old ideas and base our research solely on the research people did 10 years ago. Instead, we currently research topics that will shape the future. Topics such as Agile Organisations and Digital Disruption, Blockchain Technology, Creativity and Innovation, Digital Transformation and Business Model Innovation, Diversity, Education: Education Technology and Performance Management, HRTech, Leadership, and Teams.. We are always early in noticing trends, technologies, strategies, and organisations that shape the future, which has its ups and downs.

🎯 Goals

The objectives of this research topic is answering following questions:

a) Which new reporting requirements exist for companies with regard to ESG for the capital market?

b) How is ESG measured and reported in different companies?

c) How do the best practices for ESG reporting look like in Germany and on the German capital market?

d) On which topics investors and funds will attach even more importance to with regard to ESG reporting in the future?

e) What are the most innovative companies doing with regard to ESG?

🎓 Profile

• Reliable and self-driven
• Enthusiasm for research and deep analytics
• Passion to learn more about the future and do research with impact

📚 Further Reading

• Halbritter, G. and Dorfleitner, G. (2015), The wages of social responsibility — where are they? A critical review of ESG investing. Review of Financial Economics, 26: 25-35.
• Website of the European Commission about its taxonomy for sustainable activities (Retrieved January 31, 2023).
• Dumrose M. et al. (2020),Disaggregating confusion? The EU Taxonomy and its relation to ESG rating, Finance Research Letters, Volume 48, 2022, 102928.
• Matos, P. (2020), ESG and Responsible Institutional Investing Around the World: A Critical Review. CFA Institute Research Foundation Literature Reviews, May 2020.
• S&P Global (2022). Comparison of the effect of the S&P 500 ESG and S&P 500 indices between March 2019 and November 2022 (in standardized index points) [Graph]. In Statista (Retrieved January 31, 2023).

📄 Requirements to any Work

We do not want your research to gather dust in some corner of bookshelf but make it accessible to the world. Thus, we warmly encourage you to create some or all of the following:

• Infograph - visually represent some of your work (find examples here)
• Slide Deck - summarise your research and possibly present it
• Extract most important sequences from podcasts, videos, and other media
• 3-4 Tweets about the most important findings and summarising the topic
• optional: Medium Article - let people outside the university know about your research and start your personal brand

Please note that these deliverables are not officially required, but desirable. All required documents for the thesis or project study will declared before its regristration.

📝 How to Apply

If you are interested, please contact Prof. Dr. Isabell Welpe (click the button below to send an email) by submitting a short motivation letter, your CV and grade report.

Please also add a short research proposal (maximum one page) where you briefly outline your tentative research idea (explain here which and how many of the research questions above you want to answer) and which data and methods you want to use to answer them - including a maximum of 10 key references so that we see that you know what you are writing about - all in word as a *.docx file.

We're greatly looking forward to hearing more about you!

Apply now!