New research collaboration between University of Zurich and Robeco reveals sustainable companies are less likely to be involved in scandals
*Robeco Japan Co., Ltd.*
Press release: September 6, 2024
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New research collaboration between University of Zurich and Robeco reveals sustainable companies are less likely to be involved in scandals
*September 6, 2024:*
In a new research paper, Robeco and the University of Zurich find that companies that contribute positively to the United Nations Sustainable Development Goals (SDGs) are at risk of being embroiled in scandals such as corruption, fraud and environmental pollution in the future. announced the results of a survey showing that the We also found that these sustainable companies actually have fewer scandals, and when they do engage in scandals, the severity of the scandals is minor, and there are fewer cases that have an impact on controversial issues. Robeco and the University of Zurich are Walter
Collaborative relationship with Professor Farkas as coordinator Under this collaboration, Anna, who is enrolled in a doctoral course at the University of Zurich,
A research paper led by Vasileva investigating the relationship between corporate sustainability and scandals was published. This study found that incorporating SDG contributions into investment strategies not only leads to improved sustainability performance, but also contributes to investment return objectives.
This survey uses Robeco’s SDG score to measure companies’ compliance with the SDGs. Each company surveyed is given a score based on its contribution to the SDGs, ranging from -3 (high negative impact) to +3 (high positive impact). The study found that for every one point improvement in the SDG score, a company is 2% less likely to be involved in a scandal in the following year. Furthermore, the SDGs For every 1 point improvement in score, the number of scandals for a given company decreases by 11% (0.44 scandals per company per year). (equivalent to a decrease in the number of cases). This trend was most evident in more serious scandals. SDG score is 1
For each point improvement, the probability of a serious scandal occurring in the following year decreases by an average of 17%.
These findings can be explained by differences in the sustainability performance of companies in different industries. Industries that are resource-intensive and have low sustainability standards, such as oil exploration and coal mining, are more likely to experience accidents that could turn into scandals. Additionally, these sectors tend to attract more public attention, and the more closely a company is exposed to scrutiny, the more likely it is that a scandal will occur. Companies in the energy and utilities sectors contributed to the findings. Companies with low SDG scores within the sector are primarily engaged in fossil fuel-related businesses, while companies with high scores are actively developing renewable energy businesses.
These findings have important implications both from an investment return perspective and from a sustainability perspective. Companies involved in scandals typically not only lose stakeholder trust, but also suffer long-term reputational damage and negative financial consequences. By considering SDG compliance in your investment portfolio, you can reduce the probability of investing in companies involved in scandals. This allows investors to not only reduce their exposure to the negative environmental and social consequences associated with scandals, but also reduce the negative impact on investment returns due to scandals occurring at investee companies.
Anna is a doctoral student at the University of Zurich.
Vasileva says: “This research will further advance the debate on sustainable investing. The momentum for sustainable investing is stronger than ever, and the importance of sustainability-related information in investment decisions is expanding. It is important for investors to recognize that new metrics for measuring a company’s sustainability can help avoid scandals. This will support both sustainability and investment performance.”
Jan Anton van, SDG Strategist at Robeco
Zanten says: “It has become clear that companies that are highly aligned with the United Nations SDGs are less likely to have scandals in the future. This is an imperative that cannot be ignored by investors. Corporate scandals have a negative impact on market value. Therefore, by investing with SDG compliance in mind, investors can advance both their investment and sustainability goals. ”.
Thorsten is a professor of financial economics at the University of Zurich. Dr Hens said: “Academia and the financial industry should work together to develop a common understanding of effective financial models. This collaboration between the University of Zurich and Robeco brings together experts from different fields to explore the field of sustainable investing. This is a great example of new insights and data that have wide-ranging practical applications.”
Download the paper (in English) here:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4925213
For more information on the collaboration between Robeco and the University of Zurich, please see the press release (in English) Please take a look.
This document is the Japanese version of a press release issued on September 5, 2024 in Rotterdam, Netherlands/Zurich, Switzerland. *About Robeco*
Robeco is a dedicated global asset management company founded in 1929. The company has 16 locations around the world and is headquartered in Rotterdam, Netherlands. A global leader in sustainable investing since 1995, by combining sustainability, fundamental, and quantitative research, we offer a wide range of active management strategies across a wide range of asset classes for both institutional and individual investors. We offer As of March 31, 2024, Robeco alone has total assets under management of 194 billion euros (approximately 31.71 trillion yen*), of which 190 billion euros have integrated ESG factors. Robeco is a subsidiary of Orix Corporation Europe N.V. For more information about Robeco, please visit: www.robeco.com
Robeco Japan Co., Ltd. is Robeco’s Japanese subsidiary, established in September 2013.
*Converted at 1 euro = 163.4526 yen
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