The PRI Academic Seminar Series invites leading ESG experts to present their research to academic scholars and investors.

The aim of the series is to:

  • give world thought leaders in responsible investing the opportunity to present their work and obtain valuable feedback
  • provide an opportunity to junior scholars to network with the speaker and obtain career advice
  • be more inclusive and strengthen our global PRI Academic Network community throughout the year

Laura Starks, 4 December 2020

Paper: Climate Regulatory Risks and Corporate Bonds

Abstract: Examining how climate and other environmental regulatory risks affect bond risk and pricing, we find that bond credit ratings and yield spreads appear to be influenced by a firm’s environmental performance along with its regulatory conditions. Firms with poor environmental profiles tend to have lower credit ratings and higher yield spreads, particularly when the firm is located in a state with more stringent environmental regulations. Using the Paris Agreement as a shock to expected climate regulation, we provide evidence of a causal relation between climate regulatory risks and the credit ratings and yield spreads of bonds with problematic environmental profile.

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About Laura

Laura is the Charles E. and Sarah M. Seay Regents Chair in Finance, McCombs School of Business, University of Texas at Austin.

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Luigi Zingales, 6 November 2020

Paper: Exit vs. Voice

Abstract: We study the relative effectiveness of exit (divestment and boycott) and voice (engagement) strategies in promoting socially desirable outcomes in companies. We show that in a competitive world exit is less effective than voice in pushing firms to act in a socially responsible manner. Furthermore, we demonstrate that individual incentives to join an exit strategy are not necessarily aligned with social incentives, whereas they are when well-diversified investors are allowed to express their voice. We discuss what social and legal considerations might sometimes make exit preferable to voice.

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About Luigi

Luigi is the Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance, and Charles M. Harper Faculty Fellow, Booth School of Business, University of Chicago 

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