TY  - UNPD
A1  - Rzeźnik, Aleksandra
A1  - Hanley, Kathleen Weiss
A1  - Pelizzon, Loriana
T1  - The salience of ESG ratings for stock pricing: evidence from (potentially) confused investors
T2  - SAFE working paper ; No. 310
N2  - We exploit the a modification to Sustainanlytics’ environmental, social, and governance (ESG) rating methodology, which is subsequently adopted by Morningstar, to study whether ESG ratings are salient for stock pricing. We show that the inversion of the rating scale but not new information leads some investors to make incorrect assessments about the meaning of the change in ESG ratings. They buy (sell) stocks they misconceive as ESG upgraded (downgraded) even when the opposite is true. This trading behavior exerts transitory price pressure on affected stocks. Our paper highlights the importance of ESG ratings for investors and consequently for asset prices.
T3  - SAFE working paper - 310 
KW  - Corporate Social Responsibility
KW  - ESG Rating Agencies
KW  - Sustainable Investments
KW  - Socially responsible investing
KW  - ESG
KW  - Portfolio choice
Y1  - 2021
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/58273
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-582731
IS  - June 24, 2021
PB  - SAFE
CY  - Frankfurt am Main
ER  -