The Center for Responsible Business at the Haas School of Business, University of California, Berkeley, announced in October, in collaboration with The SRI Conference, the winner of the 2017 annual Moskowitz Prize. The prize recognizes outstanding quantitative research in sustainable and responsible investing.
This year, the Moskowitz Prize acknowledged the superior quality of the paper Corporate Governance and the Rise of Integrating Corporate Social Responsibility (CSR) Criteria in Executive Compensation: Effectiveness and Implications for Firm Outcomes released in September 2017. Download the paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2831694
The study examined the integration of CSR contracting – that is the linking of executive compensation to social and environmental performance – and how it affects firm-level outcomes. Assistant professors Caroline Flammer (Boston University), Bryan Hong (University of Western Ontario Ivey Business School) and Dylan Minor (Northwestern University Kellogg School of Management) conducted the study.
Flammer and her co-authors compiled a new database that aggregates CSR-contracting data collected between 2004 and 2013 from company proxy statements. The authors explored how CSR contracting helps focus managers\’ attention on areas that are less salient, but financially material, to the firm in the long term, thereby enhancing corporate governance.
Key findings from the study show that the adoption of CSR contracting leads to:
• An increase in long-term orientation on the part of managers;
• An increase in firm value;
• An increase in social and environmental performance;
• A reduction in emissions; and
• An increase in green innovations.
“This study provides practitioners of sustainable, responsible and impact (SRI) investing with data that shows how companies that do good also perform well,” said Steve Schueth, producer of The SRI Conference and president of First Affirmative Financial Network. “The authors\’ findings add to the mounting evidence that investing in companies that integrate sustainability best practices into their operations does not hinder financial performance, but can improve it – especially for their long-term investors.”
“This is a difficult, multifaceted topic, and there has been little direct study of it,” said Lloyd Kurtz, senior portfolio manager, Wells Fargo Private Bank and faculty co-chair, Moskowitz Prize. “The authors\’ new database of corporate pay arrangements creates the first really clear picture of the relationships between executive pay, corporate social performance and firm value.”
In its 22nd year, the Moskowitz Prize also recognized another study Why Do Investors Hold Socially Responsible Mutual Funds? with an honorable mention by authors Arno Riedl and Paul Smeets of Maastricht University. Download the paper here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2318987
Lloyd Kurtz and Caroline Flammer attended The 2017 SRI Conference recently and discussed these and other recent studies that are adding value to the responsible investment industry.
Since its inception in 1996, the Moskowitz Prize has been awarded annually at The SRI Conference. The next one, 29th annual SRI Conference, will be held at The Broadmoor Hotel in Colorado Springs, CO on November 1-3, 2018. For more information please visit: www.sriconference.com
The 2017 Moskowitz Prize sponsors are Bailard, Calvert Group, First Affirmative Financial Network, Neuberger Berman, Trillium Asset Management, and Wells Fargo.
About The SRI Conference
The 29th annual SRI Conference will be held at The Broadmoor Hotel in Colorado Springs, CO on November 1-3, 2018. Produced by The SRI Conference and Community, LLC in collaboration with many organizations working to direct investment capital toward the creation of a truly sustainable future, The SRI Conference is the premier annual forum for investment professionals and investors engaged in sustainable, responsible, impact (SRI) investing. Conference participants include investment professionals, institutional investors, and related organizations. The program features educational sessions and opportunities to network with hundreds of like-minded individuals, organizations, and leaders in the field of sustainable, responsible, impact investing.
About The Center for Responsible Business at the Haas School of Business, UC Berkeley Building upon over a decade of research, teaching, and industry engagement, the Center for Responsible Business (CRB) brings together students, company leaders and faculty to develop leaders who redefine business for a sustainable future. The CRB, part of the Institute for Business and Social Impact at the Berkeley Haas School of Business, inspires students, practitioners, and researchers to re-think traditional business practices, envision the roles that they can play in creating change, and obtain the skills to get there.
