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This study sheds light on agency conflicts between creditors and shareholders and their effect on a firm's corporate social responsibility (CSR) performance. We find that the presence of institutio...

This paper assesses the energy transition in Germany from 1990 to 2017 with a focus on the politics and energy policies of the three German Chancellors. Its aim is to investigate the factors underlying the outcomes from a socio-political perspective and through this offer insight as to energy policy reforms that may be transferrable to other governments. We reveal the incremental and politically pivotal role of grassroots movements against nuclear power forming the catalyst and ongoing driver for Germany's energy transition - the Energiewende. Energiewende harbors a compelling socio-technical experiment based on government-led policy-driven structural changes to the energy system that has concurrently supported a heavily industrialized economy. Despite higher energy costs, borne disproportionally by residents, the energy vision and social experiment shared decadal and multi government cross-partisan political and community support. This socio-political policy stability provides a notable point of difference when comparing the energy transitions of lagging nations such as Australia that reveals the criticality of policy certainty to support investment towards new models of clean energy generation and distribution.

Financial markets play a decisive role in the transition to a low-carbon economy. This study investigates the role of climate information presentation for climate-friendly investing among retail investors. We conduct a choice experiment in which we vary the presentation format of climate information by means of three label designs to test their influence on investment practices. We provide empirical evidence for the effectiveness of climate labeling as a potential nudge for climate-friendly investing. Furthermore, we find heterogeneity in the influence of climate information across different label designs and cognitive characteristics of investors. Intuitive (reflective) decision makers tend to place significantly more (less) weight on funds’ climate performance compared with financial performance—irrespective of a participant’s environmental preference.

Purpose So far, sustainability reporting in higher education is in a very early stage – partly, because of the lack of an established and widely recognized sustainability reporting framework for higher education institutions (HEIs). Therefore, a modification of the sustainability code for the use in the higher education context was recently developed in Germany. The purpose of this paper is to evaluate this modification from an academic point of view. Design/methodology/approach The evaluation of the sustainability code is based on selected reporting principles drawn from frameworks of sustainability and financial reporting. Findings The evaluation shows that to a large extent, the modification of the sustainability code for HEIs contributes to the fulfillment of the selected reporting principles. However, it also became evident that there is still room for improvement, especially in terms of clarity and the inclusion of material aspects. Practical implications The need for an implementation manual regarding the modified HEI-specific sustainability code is emphasized, as the sustainability code requires further clarification to be manageable for HEIs. Originality/value This paper provides suggestions for the further development of a sustainability reporting guideline for HEIs to enhance its alignment with both sustainability reporting principles and the needs of HEIs.

Companies disclose increasingly more corporate social responsibility (CSR) related information. However, CSR information is not always treated entirely rationally by capital market participants. In an experiment using experienced investment professionals, we investigate how the timing of CSR disclosure influences firm valuations by professional investors. The results suggest that CSR disclosure in a stand-alone report, temporally disconnected to firm’s financial disclosure, may lead to asymmetric anchoring, whereby simultaneous disclosure of CSR and financial information in an integrated report prevents anchoring in investors’ judgement. Investors’ asymmetric anchoring is induced by differences in cognitive effort invested in CSR information processing, which depends on whether CSR information signals future profits or losses. Our results contribute to the debate on disclosure standards for CSR information and the use of CSR information by professional investors.

In this paper, Sustainable Development at Higher Education Institutions is introduced as a field of research and application. An interdisciplinary German collaboration on Sustainable Development at Higher Education Institutions – HOCHN – serves as an example of how this topic is addressed on a national level. Results and advances of the HOCHN collaboration are summarized. Moreover, challenges of implementing sustainability-related organizational development at universities are discussed. Focusing on Education for Sustainable Development at universities, three different methodologies are outlined that exceed conventional approaches in tertiary education: Lego® Serious Play® methodology, constellation techniques, and a coaching program on the “Five Minds for the Future”. They illustrate different ways of addressing issues of Education for Sustainable Development and skills and habits respectively that are crucial for achieving the global Sustainable Development Goals of the UN.

This study examines how coal companies were affected by the announcement of thermal coal divestment made by Blackrock, a large institutional asset manager. Following the announcement, the largest thermal coal mining companies exhibited negative abnormal returns. However, the stock prices of other firms were not affected. Blackrock’s own share price increased following the announcement. We provide additional evidence that Blackrock protected its clients by lowering its exposure towards affected companies before the announcement. Overall, our results show that divestment has significant impacts on the companies in question and that the capital market sees divestment as value-enhancing for the divesting institution.

Non-professional investors face a series of complex decisions when considering environmental, social and governance (ESG) issues for their investment activities. As such, this study sheds light on the question: what influences the use of sustainable information and the decision to invest in a sustainable company by non-professional investors? In order to answer the question, this article builds on the behavioral finance and information overload literature. We used an online survey carried out in Germany and applied a structural equation model. The results show that the personal orientation toward sustainability issues is the most important factor in deciding to use a company’s sustainability information. Furthermore, the study reveals that the decision to invest in a sustainable company is influenced by the personal sustainability orientation, identification induced by a good feeling, their willingness to waive returns for sustainability, their exposure to sustainability information, the investor’...

We examine whether, and how, investor relations (IR) quality affects managerial malfeasance by exploring the potential effects on the value, accumulation, and uses of cash holdings. Using European data, we find that an increase in the IR quality rank from the lower quartile to the upper quartile raises the marginal value of cash, on average, by €0.40 to €0.69. The effect is more pronounced for firms with weaker (stronger) external (internal) governance structures. We further document an inverted J-shaped relationship between IR quality and the propensity of firms to hoard cash. Specifically, higher-quality IR initially constrain the propensity of firms to accumulate cash; however, the effect is partially reversed as IR quality rank exceeds 0.69. Cash-rich firms with lower-rated IR programs are also more likely to dissipate cash through value-decreasing capital expenditures. Unexpectedly, IR quality seems not to matter for acquisitions and R&D spending nor for repurchases. Instead, IR quality has a negative impact on the propensity of firms to pay dividends, which attests to the shareholder power hypothesis. Overall, we show that higher-quality IR are a market-based approach to increased investor protection that effectively constrain both the profusion and insiders’ negligent allocation of corporate liquid assets. Actually, visibility improves firm transparency, making possible processes of managerial subjection to investor rights.

Although the distinction between top-down and bottom-up attention is well-established in the literature, organizational research on the interaction of both processes is still fragmented. Drawing on...

This paper analyses the investments of US activist investor Guy Wyser-Pratte in listed companies in Germany, France, Austria and Switzerland between the years 2001 and 2011. Wyser-Pratte is the best known single activist investor in Continental Europe whose investments have typically been followed intensively by the press. For the first time, this study examines the investment activities of a single activist investor with key focus on Continental Europe and complements the few existing studies on single activist investors and their focus on Anglo-Saxon jurisdictions. The results show that he approaches poor performing companies and that his investment activities increase the short- and long-term shareholder value. Key differentiator to existing research is the focus of Wyser-Pratte on improving the profitability of his target companies. This new insight can be interpreted as an indicator that value generation by shareholder activism works different in the institutional setting of Continental Europe.

Empirical research in financial markets has been interested in the relationship between the financial performance of an exchange-listed company and its behavior as corporate citizen for a long time. Today, this debate concentrates in particular on the financial performance of sustainable investment projects. In such a context, this chapter analyzes the state of the literature on the performance of the fast-growing segment of green bonds as well as gives a general overview on the relationship between environmental, social, and governance (ESG) performances and financial performances.

The interest in how shareholders engage with the management of their investee companies has been rekindled recently by the global financial crisis. The topic has however received little but growing academic attention, even though it has already been addressed by regulators in countries such as the UK and Japan, and is in discussion by supranational bodies such as the UN and the EU. Investors and management have different understandings of what engagement actually is, different preferences of how it should be carried out and different ideas of what successful engagement constitutes. This variance in understanding of shareholder engagement can also be seen in academic publications concerning the topic. The aim of this chapter is to better understand the plurality of meanings associated with terms related to shareholder engagement by various parties and to produce a theoretical basis for framing a definition, which is broadly approved.

We study the fixed term nature of the German supervisory board appointment hypothesizing that the timing of the upcoming election has an impact on the credibility of effort by activist investors. More credible approaches should consequently be associated with higher wealth effects. An average abnormal return that is up to 6.9 percent higher can be observed when potential activists consider the timing of the next supervisory board election. Capital markets apparently perceive an activist effort within one to two years prior to the election as being most credible. Quite contrary to intuition it seems that high cash positions on targets’ balance sheets have a negative impact on the post-announcement wealth effects.

The search for a relation between environmental, social, and governance (ESG) criteria and corporate financial performance (CFP) can be traced back to the beginning of the 1970s. Scholars and investors have published more than 2000 empirical studies and several review studies on this relation since then. The largest previous review study analyzes just a fraction of existing primary studies, making findings difficult to generalize. Thus, knowledge on the financial effects of ESG criteria remains fragmented. To overcome this shortcoming, this study extracts all provided primary and secondary data of previous academic review studies. Through doing this, the study combines the findings of about 2200 individual studies. Hence, this study is by far the most exhaustive overview of academic research on this topic and allows for generalizable statements. The results show that the business case for ESG investing is empirically very well founded. Roughly 90% of studies find a nonnegative ESG–CFP relation. More impor...

This article examines intra-industry information transfers in the European and Japanese electric industry in the wake of the Fukushima nuclear accident. For European conventional utilities, the downward price drift is relatively small and transient in nature. Yet, we find positive and lingering effects of the accident on the shares of alternative electric utilities. Japanese utilities were hit the hardest and the shock seems to be long-lasting. An interesting finding of this article is the abrupt increase (decrease) in the systematic risk of conventional (alternative) electric utilities following the event. In Europe, we could only document a decrease in the idiosyncratic risk of conventional utilities, pointing to enhanced return synchronicity in the conventional power industry. In turn, total risk seems to be stationary around the accident. In rebuttal, idiosyncratic and systematic risks (and consequently total risk) have substantially risen in Japan since the event. Finally, intercept values related to...

This paper investigates capital market reactions to announcements of corporate strategic transactions in the clean technology, or cleantech, industry. Using the event study method in a multi-country setting, we exploit a dataset of 328 hand-collected announcements of mergers and acquisitions, joint ventures, and asset disposals that took place between 2001 and 2011. We provide strong evidence of significant wealth gains from cleantech deals. On average, cleantech companies earn significantly higher abnormal returns than non-cleantech companies, confirming the beneficial idiosyncrasies of the cleantech industry. These high premia are likely driven by government interventions that are believed to be a necessary pre-condition for development of clean technology. Alternatively, the premia are commanded by the acquisition of cutting-edge environmental innovations and the positive credibility spillover inherent in cleantech deals.

This paper assesses the carbon exposure of European electric utilities covered by the EU Emissions Trading System (EU ETS). First, we rely on an asset pricing model to empirically determine the effect of carbon price risks on firm-specific cost of capital for a sample of 20 European utility stocks during the period 2005–2010. Second, we employ a discounted cash flow framework to simulate carbon-adjusted equity values for three selected utilities and their investment strategies from 2009 to 2020. We show that company-specific carbon risks are asymmetrically distributed to a few utility firms: While for the great majority of power producers carbon price movements are not a relevant risk factor, we find that utilities with an extremely high-emitting fuel mix bear significant risk premiums for carbon which translate to higher cost of capital and a loss of equity value. In contrast, we find no evidence that low-emitting utilities benefit from reduced capital costs. We further reveal that, in addition to the firm's fuel mix, permit allocation rules and replacement investment decisions in terms of fuel technology choice are the driving forces behind the carbon exposure of the utilities. The carbon-related loss of equity value is substantially reduced by implementing an investment strategy directed towards a carbon-free generation mix. The derogations from full permit auctioning in Eastern European member states provide insurance against carbon risks of utilities.

This article examines the value creation of 78 German acquisitions in the US during the period 1990 to 2004. The observed Cumulative Abnormal Returns (CARs) confirm the previous finding that cross-border Mergers and Acquisitions (M&A) activity yields on average wealth gains for shareholders of the acquiring companies. No evidence of a negative cross-border wealth effect could be ascertained, thereby indicating a high international integration of the German capital market. The positive capital market perception of German M&A activities in the US is mainly driven by the acquisition of private targets and equity-settled transactions. The market reactions yield overall congruent results to the responses from surveyed executives of German acquirers. However, bidders’ self assessment of US acquisitions is more positive than the capital market valuation, which substantiates manager overconfidence.

This paper reviews the existing literature on investor relations. The purpose of investor relations is consistently to provide market participants with decision-relevant information as a result of either mandatory or voluntary information-disclosure policies. A causation chain between investor relations and stock prices is established through the liquidity hypothesis with respect to the depth of analyst coverage. Though a positive association is documented, it is not perfectly linear. After presenting the taxonomy of corporate disclosures, we elaborate on how well the full-disclosure and the discretionary disclosure models fit into reality. In addition, the extant theoretical and empirical literature reports that investor relations policies vary over time, across firms and jurisdictions.

Manuscript Type: Empirical.Research Question / Issue: This study contributes to the emerging research that analyzes the relation between performance and single components of broad corporate governance aggregates, such as governance codes and ratings. Available research is confined to the U.S., Japan, and emerging markets. We enlarge the geographical scope to the German Corporate Governance Code (GCGC).Research Findings / Insights: For a sample of 100 large listed German stock corporations, compliance with the GCGC at large is significantly associated only with one of our performance measures (Tobin's q); this connection is negative. Individual analysis of eleven GCGC recommendations reveals that for three of them, association with all performance measures is insignificant. Four (four) components are significantly positively (negatively) connected with at least one performance measure.Theoretical / Academic Implications: Most remarkably are some significantly negative associations between components and performance. Their existence might explain why the majority of studies fail to find a significant connection between the GCGC at large and performance. As the group of single components found to be significant in the literature is quite inconsistent, further research questions emerge, such as whether there is some stability in the set of significant single components across performance measures, across countries, and through time.Practitioner / Policy Implications: This study provides new impulse to both commissions setting up governance codes and to commercial providers of governance scores. Given the significantly negative associations we found, an empirical quality inspection of the GCGC at large and of its components is recommended.

Vor dem Hintergrund aktueller gesellschaftlicher Fragestellungen wie Globalisierung, Klimawandel und Finanzkrise wird vermehrt auch grundsätzliche Kritik an der Wertschöpfung von Unternehmen laut. Um Glaubwürdigkeit und Vertrauen in verantwortungsvolles Unternehmenshandeln zurückzugewinnen, sind nachhaltige Geschäftsmodelle unabdingbar. Der Arbeitskreis "Nachhaltige Unternehmensführung" der Schmalenbach-Gesellschaft für Betriebswirtschaft e.V. bietet Ihnen prägnante und praxisorientierte Grundsätze für das wirksame Einbinden der Nachhaltigkeit in betriebliche Entscheidungsprozesse. Erfahren Sie in dieser 2. Auflage des viel beachteten Buchs, wie sich eine nachhaltige Führungskultur überzeugend als unternehmerisches Erfolgsprinzip beweist – sowohl in kapitalmarktorientierten als auch in familiengeführten, mittelständischen und öffentlichen Unternehmen.

This article analyses the importance of corporate governance for growth companies, derives specific requirements for them and evaluates the corporate governance quality for companies listed on TecDax. Growth companies’ characteristics imply a comparatively high importance of corporate governance due to a high level of business and agency risk. Several corporate governance elements are therefore particularly important for growth companies. Overall, the empirical results imply a high conformity of the Tec-Dax companies with the GCGC criteria with some exceptions for specific companies and criteria. But the analysis of the quality of their supervisory boards delivers a differentiated result as in some of the analysed companies the effectiveness of the supervisory board is questionable.

Throughout Europe corporate governance codes are increasing in importance. These codes are developed to enhance the quality of corporate governance. Institutional investors are the major trigger in penalising companies' lack of compliance with a code. The mechanisms of institutional investors to penalise companies are analysed and empirical results for Germany are presented. To reduce the cost of these mechanisms, the Scorecard for German Corporate Governance (CG Scorecard) will be examined as an instrument for institutional investors. Empirical findings regarding compliance with the CG Scorecard show that there are particular deficits in terms of corporate governance commitment and remuneration of board members.

Das Ende des New-Economy-Hypes im Jahr 2000 hat im deutschen Private-Equity-Markt zu einer deutlichen Verschiebung der Investitionsschwerpunkte vom Early-Stage- in den Later-StageBereich gefuhrt.1 Dabei lasst sich insbesondere eine Zunahme von Buyout-Finanzierungen etablierter mittelstandischer Unternehmen beobachten, weshalb die European Venture Capital and Private Equity Association (EVCA) das Jahr 2002 zum Jahr des Buyout ernannte.2 Obwohl verschiedene Umstande wie die schwache Eigenkapitalausstattung oder die Problematik fehlender familieninterner Nachfolger bei Generationswechseln in mittelstandischen Unternehmen sowie die immer noch nicht abgeschlossene Restrukturierung deutscher Konzerne auch zukunftig eine zunehmende Bedeutung von Buyouts vermuten lassen, hat sich die betriebswirtschaftliche Forschung bisher nicht mit dem Controlling von Buyout-Transaktionen befasst. Diese Tatsache uberrascht, handelt es sich hierbei doch um einen wertmasig bedeutenden Teilbereich des Beteiligungscontrollings. Im Rahmen dieses Beitrags werden einfuhrende Uberlegungen uber die grundsatzliche Ausgestaltung einer Controllingkonzeption fur Buyouts angestellt und die Balanced Scorecard als praxistaugliches Instrument zur Steuerung von Buyouts aus Sicht von Private-Equity-Gesellschaften vorgestellt.

Institutionelle Anleger und ihr Einfluss auf Corporate Governance und Unternehmensführung haben in der wissenschaftlichen und praktischen Diskussion an Bedeutung gewonnen. Hierzu werden Ergebnisse einer Befragung von etablierten Unternehmen und Wachstumsunternehmen einander gegenüber gestellt. Obwohl der Einfluss institutioneller Anleger die Unternehmen bereits zu Anpassungen veranlasst hat, bestehen weiterhin deutliche Divergenzen zwischen den Anforderungen der institutionellen Anleger und den Governance-Praktiken in den Unternehmen.

We hypothesize that corporate carbon performance is negatively associated with accounting-based financial performance and that this relationship is positive for market-based financial performance. ...

Der Einfluss von Corporate Social Responsibility (CSR) auf den Wert eines Unternehmens wird vor dem Hintergrund des wachsenden Interesses der Offentlichkeit in der Literatur und Praxis vielfach diskutiert. Untersuchungen zeigen, dass der Erfolg von CSR vor allem der positiven Wirkung auf die Kapitalkosten des Unternehmens zuzuschreiben ist. Durch die senkende Wirkung von CSR-Aktivitaten auf das geschatzte Risiko des Unternehmens konnen Eigenkapital- wie auch Fremdkapitalkosten reduziert werden. Finanzverantwortliche sollten aus diesem Grund Nachhaltigkeitsinformationen bei der Unternehmensbewertung berucksichtigen, indem sie nachhaltigkeitsorientierte Aspekte in klassische Bewertungsverfahren integrieren. Einige praxistaugliche Ansatze zur Integration existieren bereits. Zu empfehlen ist die Anwendung des Sustainable Value-Ansatzes, da dieser eine umfassende Berucksichtigung aller relevanten Nachhaltigkeitsfaktoren verfolgt.

In recent years, sustainability has increasingly attracted the attention of capital market participants. While event studies have established that stock prices react to news about environmental, social, and governance (ESG) performance, further empirical evidence raises the question of whether market participants always rationally process ESG information included in a standalone sustainability report. In an experiment with investment professionals, this study investigates whether a disconnect between financial statements and sustainability reports leads to an anchoring effect in the assessment of ESG information. Results show that users of standalone sustainability reports fully adjust their valuations to the level of integrated (financial and sustainability) report users following information about bad ESG performance. However, none of the standalone reports users adjust their valuations following information about good ESG performance. Thus, financial statement users asymmetrically anchor on their financial value judgments when assessing ESG information provided in a standalone report.

This paper investigates capital market reactions to announcements of corporate strategic transactions in the cleantech industry. Using the event study method in a multi-country setting, we exploit a dataset of 328 hand-collected announcements of mergers and acquisitions, joint ventures and asset disposals that took place between 2001 and 2011. We provide strong evidence of significant wealth gains from cleantech deals. On average, cleantech companies earn significantly higher abnormal returns than non-cleantech companies, which attests to beneficial idiosyncrasies of the cleantech industry. These high premiums are likely driven by government interventions which are believed to be a necessary pre-condition for clean technology to develop. Alternatively, the premiums are commanded by the acquisition of cutting-edge environmental innovations and the positive credibility spillover inherent in cleantech deals.

This paper examines intra-industry information transfers in the European and Japanese electric industry in the wake of the Fukushima nuclear accident. For European conventional utilities, the downward price drift is relatively small and transient in nature. Yet, we find positive and lingering effects of the accident on the shares of alternative electric utilities. Japanese utilities were hit the hardest and the shock seems to be long-lasting. An interesting finding of the paper is the abrupt increase (decrease) in the systematic risk of conventional (alternative) electric utilities following the event. In Europe, we could only document a decrease in the idiosyncratic risk of conventional utilities, pointing to enhanced return synchronicity in the conventional power industry. In turn, total risk seems to be stationary around the accident. In rebuttal, idiosyncratic and systematic risks (and consequently total risk) have substantially risen in Japan since the event. On the other hand, intercept values related to European utilities remained stable around the accident while Japanese utilities incurred a substantial decline in their daily average returns as captured by alpha shifts. Our results about the stability of the risk-return profile of the sample firms around the event are robust to a number of specifications.

Veranderungen auf der Angebots- sowie der Nachfrageseite im non-profit-Sektor hatten in der letzten Zeit einen zunehmenden Professionalisierungsdruck zur Folge, der das Konzept „Social Entrepreneurship“ begunstigt [social entrepreneurship und social entrepreneurs im Sinne von social entrepreneurship organization werden im Folgenden vorwiegend mit dem Kurzel SEO bezeichnet]. Social entrepreneurs gehen gesellschaftliche Probleme an und zielen nicht auf die Maximierung des okonomischen Gewinns. Um die tatsachliche Wirksamkeit dieses Ansatzes zu verdeutlichen sowie den Ressourceneinsatz zu einem gegebenen Ziel ins Verhaltnis zu setzen und moglichst zu minimieren, fehlte jedoch bisher die Grundlage fur ein professionelles Reporting. Ein solches Reporting wurde

Ein branchenübergreifendes Expertenteam um Alfred Wagenhofer liefert Ihnen Wissen und Vorschläge zur Lösung neuer Controlling-Aufgaben im Zuge der Corporate-Governance-Diskussion. Sie erfahren, welche Konsequenzen für das Controlling aus den Entwicklungen im Bereich Corporate Governance entstehen. Sie erhalten Know-how, um auch weitherin Controlling-Aufgaben souverän zu lösen: Vergütungssysteme für Manager, Risikomanagement, Interne Kontrollsysteme und vieles mehr. Sie gewinnen Einblicke in erfolgreiche Controlling-Konzepte aus der Praxis. Mit diesem Wissen agieren Sie souverän!