Measurement of Sustainability and Responsible Business Practice for Sustainable and Responsible Investors

This cumulative thesis consists of an introduction and five papers. The introduction provides more insight into the papers and puts the results into context. The following summary is intended to provide only a brief overview of the papers. The first paper examines the influence of company size, resources to provide ESG data, and data availability on ESG performance. The paper is based on the ASSET4 database and uses several methods: Linear Mixed Model and Structural Equation Modeling. The paper supports the hypothesized correlation. The second paper focuses on one of the sustainability sensitive industries: The mining sector. The aim of the paper is to present and connect the results of the interdisciplinary research project NamiRo. The study refers to further research articles and identified the drivers of standard acceptance. The creation of a level-playing field by governments is analyzed in the third paper using the example of the Indian Company Act 2013. The Act requires companies of a certain size to spend at least 2% of their net profit to Corporate Social Responsibility (CSR) activities. The paper analyzes the influence of mandatory CSR on the interface between Corporate Sustainability Performance and Financial Performance and finds a difference before and after the introduction of the Indian Company Act. The fourth paper in this dissertation investigates a new research question while advancing the methodological literature. Under the assumption that ESG data are backward-looking, the paper analyzes whether the Science Based Targets (SBTs) of the Science Based Targets initiative can be used as a predictor of emissions reductions and by sustainable investors as a selection criterion for ambitious companies. The study finds no evidence that companies with SBTs are more ambitious in reducing GHG emissions and therefore does not recommend using SBTs as a forward looking indicator for sustainable investors. The second contribution of the fourth paper is to compare the two-way fixed effects difference in difference (DiD) regressions with the staggered DiD regressions. The fact that sustainability ratings are also increasingly being used by companies and CEOs to pursue their own goals is discussed in the fifth paper. The paper addresses the issue of reputation management through ESG data management and is based on the observation that Refinitiv's ESG database is not static. The study finds that companies use the opportunity to edit their ESG data to improve their rating and to engage in green reputation management. It is shown that editing can lead to capital market reactions that differ across industries.