Date of Submission

Spring 2022

Academic Program

Economics and Finance

Project Advisor 1

Dimitri Papadimitriou

Abstract/Artist's Statement

ESG is a metric designed to assess the extent to which a company has mitigated its risks with regard to environmental, social, and governance factors. In the past two decades, ESG investing and adoption has risen significantly, and ESG evaluation and practices are increasingly being introduced to governments and the private sector. However, today, ESG disclosure is not mandated in the United States, leading to asymmetries in disclosure quality and divergence in ESG scores issued by ratings providers. These massive discrepancies have consequences for companies (e.g. cost of capital), investors (e.g. investment hesitance, lost potential returns), and the ESG metric itself (i.e. damage to ESG’s reputation and reliability), making it imperative that disclosure is made mandatory and that a generally-accepted disclosure framework is developed. In recent years, several proposals for ESG disclosure regulation have been put forth to achieve this, and as such, this paper assesses the viability of these proposals. To this end, this paper aims to clarify some of the confusion surrounding ESG and its meaning, as well as offer recommendations for future ESG regulation.

Open Access Agreement

Open Access

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Download

This work is protected by a Creative Commons license. Any use not permitted under that license is prohibited.

Included in

Finance Commons

Share

COinS