Project Outline

Project Title: -
On the relationship between Firms performance, environment, social and

governance reporting: Empirical evidences from ESG compliant firms
Introduction
The emphasis on sustainable and responsible investment (SRI) strategies have
been steadily on the rise given the increasing awareness towards environmental
stability, socio-economic development and adherence to ethical standards. Recently,
the perceived lack of governance during global financial crisis, increasing threat from
global warming, activism on social issues etc. have brought about a consensus
towards importance of holistic growth and responsible investment. One such strategy
that has gradually gained popularity among investors is environmental, social and
governance (ESG) based investing.
The underlying principle behind ESG based investing lies in identifying & quantifying
the intangible value possessed by socially responsible, environmentally friendly firms
with robust governance policies in place. These firms are believed to exhibit better
risk management measures on ESG parameters which in turn creates value for
investors with long-lasting sustainable business models. ESG based investment
philosophy has a rich history with its roots in United States and Europe set in 1960-
70.
In Europe, the first SRI fund was launched in Sweden in 1960s whereas socio-
political movements in US led to start of socially responsible investments in 1970s.
Globally, as of 2016, there were $22.89 trillion worth of assets professionally
managed under SRI theme. This represents a healthy rise ~11.9% CAGR since
2014. Environmental, Social and Governance (ESG) theme is an effective portfolio
selection strategy under the broader theme of sustainable and responsible
investment (SRI). Fund managers and investors can focus upon firms with better
ESG performance to generate higher returns with lower company specific risk.
Bloomberg ESG Data Service
In 2009 Bloomberg acquired New Energy Finance, which provides information
regarding renewable energy and the carbon market, and subsequently launched
Bloomberg ESG Data Service. Bloomberg collects ESG data for over 10,000
publicly-listed companies globally. ESG data is integrated into Bloomberg Equities
and Intelligence Services. Bloomberg ESG Disclosure Scores rate companies
annually based on their disclosure of quantitative and policy-related ESG data.
Rating Scale: Out of 100. Bloomberg also provides scores from third party rating
agencies (RobecoSam, Sustainalytics, ISS Quality Score, and CDP Climate
Disclosure Score) and an overview of a company from an ESG perspective both
historically and relative to peers.
Methodology:
Bloomberg evaluates companies on an annual basis, collecting public ESG

information disclosed by companies through corporate social responsibility (CSR) or
sustainability reports, annual reports and websites, and other public sources, as well
as through company direct contact. This data is checked and standardized.
Bloomberg ESG data covers 120 environmental, social and governance indicators
including: carbon emissions, climate change effect, pollution,
waste disposal, renewable energy, resource depletion, supply chain, political
contributions, discrimination, diversity, community relations, human rights,
cumulative voting, executive compensation, shareholders’ rights, takeover defense,
staggered boards, and independent directors. Bloomberg ESG rating will penalize
companies for “missing data.”
This study investigates the effect of environmental, social, and governance (ESG)
activities and their disclosure on firm performance. In recent years, numerous
studies have attempted to measure the performance and valuation impact of ESG
factors. A stream of this literature has also addressed the determinants of the firm's
ESG disclosure and the possible valuation effects of such disclosure. We
hypothesize that the association between a firm's performance and ESG disclosures
related to those environment, social, and governance activities. However, the impact
of disclosure in this context is not ex ante clear. One might expect a positive effect
insofar as disclosure reduces information asymmetries and helps investors better
understand the firm's ESG strengths or weaknesses. Alternatively, ESG disclosure
may impair firm value if investors view such disclosure as “cheap talk” or
“greenwashing”.
In this study we explore effects of ESG and sustainability reporting on firm
performance controlled with some other control variable affecting firm
performance:
Data Collection and Variable Description
Dependent Variable (ROA/ROE/Tobin’s):
Name of Definition/Description Bloomberg field
Variable
ROA % return on asset RETURN_ON_ASSET
TOBINQ Economic measure of TOBIN_Q_RATIO
firm performance
ROE % return on equity OPER_ROE
Independent Variables (ESG-score):

Name of Variable Definition/Description Bloomberg field
ESG ESG_DISCLOSURE_SCORE
ENV ENVIRON_DISCLOSURE_SCORE
SOC SOCIAL_DISCLOSURE_SCORE
GOV GOVNCE_DISCLOSURE_SCORE
Independent Variables (Governance variables):
Name of Definition/ Bloomberg field
Variable Description
ESGCOMP Dummy variable ESG_LINKED_COMPENSATION_FOR_BR
IF YES =1 D
Otherwise =0
INDP % of Independent PCT_INDEPENDENT_DIRECTORS
directors
GRI Dummy variable GRI_COMPLIANCE
IF YES =1
Otherwise =0
BRDSIZE BOARD_SIZE
WOMEN % of women on PCT_WOMEN_ON_BOARD
board
CEODUL Dummy variable CEO_DUALITY
IF YES =1
Otherwise =0
BRDMEET % of attendance in BOARD_MEETING_ATTENDANCE_PCT
board meeting
NONEXEBR % of non executive PCT_OF_NON_EXEC_DIR_ON_BRD
D directors on board
BRDMEETY # meeting per year BOARD_MEETINGS_PER_YR
R in board
CEOPAY TOT_SAL_&_BNS_AW_TO_CEO_&_EQUI
V
Total salary TOT_SALARIES_PAID_TO_EXECUTIVES
to Executive
Independent Variables (Control variables):

Name of Definition/Description Bloomberg field
Variable
TOTALEMP Total employee in org. NUM_OF_EMPLOYEES
WOMEMP Total women PCT_WOMEN_EMPLOYEES
employees
CSRSUST Dummy variable CSR_SUSTAINABILITY_COMMITTEE
IF YES =1
Otherwise =0
NWT Number of times net NET_WORTH_GROWTH
worth
TOTSALES Total Sales SALES_REV_TURN
SALGWT % Sales Growth SALES_GROWTH
NETINM Total net income NET_INCOME
NETPRF % net profit margin PROF_MARGIN
EBITDA EBITDA
EPSGWT % EPS growth EPS_GROWTH
FCF Free Cash flow CF_FREE_CASH_FLOW
CR Current Ratio (X) CUR_RATIO
DTE Debt to equity ratio (X) TOT_DEBT_TO_TOT_EQY
TOTALAST Total Assets BS_TOT_ASSET
INTGBL Total Intangible assets BS_DISCLOSED_INTANGIBLES
CAPEXP Total Capital CF_CAP_EXPEND_PRPTY_ADD
Expenditure
ZSCORE Prob of bankruptcy ALTMAN_Z_SCORE
TEQT Total equity TOTAL_EQUITY
AGE Age of firm You need to calculate
Data Collection and period:

Data source Frequenc Time Period
y
Bloomberg Annual 2011-2021
Fiscal
Note: Where data is not available place in that cell N/A

Regression Model:
ROA / ROE/Tobin’ s=β 0 + β i Vector of ESG−score + β j Vector of Governance variables + β k Vector of Control va
Guidelines for Preparing the Project:
Your project report should follow the following sections:

Fonts and Size : Times New Roman and 12"
Margin : 1.5"
Maximum Word Limit : Between 4,000 to 6,000 Words
1. Introduction
The Aim/Scope/The Issue
Definitions
The broad area
The role of Management accounting (in your issue/topic)
2. Review of earlier studies
Books
Journal paper
Newspaper articles
Magazines
Online sources
(Note: everything should be re-written by you, no copy pest)
3. Data and Descriptive analysis (this section is must, project not acceptable if this is not included)
Data Description
Variables/Qualitative information
Accounting/Costing Calculation/if any other calculation
Summary/Descriptive statistics
Mean
Standard deviation
Percentage
Coefficient of variation,
Regressions
4. Main Results and Discussions
Main observation of the study
Main Findings /Suggestions
Limitations
Critical Remarks
5. Managerial Implications
Management accountant Perspective
Decision Making process help
Organizational problem and solution
6. Summary and conclusions
At the end of the report(Must)

List of References, material used must be given in chronological manner.

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Project Title: -

On the relationship between Firms performance, environment, social and

Bloomberg evaluates companies on an annual basis, collecting public ESG

Independent Variables (ESG-score):

Independent Variables (Control variables):

Data Collection and period:

Note: Where data is not available place in that cell N/A

Guidelines for Preparing the Project:

Your project report should follow the following sections:

At the end of the report(Must)

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