Date of Award
Spring 2024
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Management
First Advisor
Thomas, Jacob
Abstract
I investigate the relation between increased investor relations (IR) activities and four ESG outcomes: coverage by ESG rating agencies, ESG rating levels, the stock market response to bad ESG news, and the use of ESG-related terms in earnings conference calls. Firms with more IR activities—indicated by an IR Officer’s (IRO) presence on conference calls—could improve communication about ESG efforts with investors and ESG rating agencies, and feedback received might even increase the level of ESG efforts. I find that firms with IR prominence (1) are more likely to be covered by ESG raters; (2) experience an increase in overall, E, S, and G ratings; (3) exhibit a substantial reduction in the negative stock market impact of negative ESG news, with this effect being concentrated among smaller firms and firms with more institutional ownership; and (4) do not use more ESG-related terms in conference calls. Focusing on climate change related bigrams (Sautner et al. 2023), I find results consistent with a positive association between IR prominence and the relative frequency of (1) climate change bigrams; (2) climate change bigrams appearing in the same sentences as positive tone words; and (3) bigrams related to climate change technological opportunities appearing in the same sentence as positive tone words in earnings conference call transcripts. These results suggest that IROs encourage management to discuss specific climate change issues and opportunities in more positive terms. A small survey of IROs provides anecdotal evidence that IR plays an important role in ESG reporting and communication.
Recommended Citation
Masaya, Tendai, "Investor Relations and ESG" (2024). Yale Graduate School of Arts and Sciences Dissertations. 1473.
https://elischolar.library.yale.edu/gsas_dissertations/1473
