RRBM Honor Roll

The RRBM Honor Roll publications have been selected as examples of research that is both rigorous and relevant. The listing below offers credible insights for society.

These publications have been selected for the RRBM Honor Roll by the Selection Board with the exception of 2019 articles selected by a pre-test review panel.


Nature of the publicationJournal article
Title of the publicationWhy is Corporate Virtue in the Eye of The Beholder? The Case of ESG Ratings
Journal name/Book publisherThe Accounting Review

Despite the rising use of environmental, social, and governance (ESG) ratings, there is substantial disagreement across rating agencies regarding what rating to give to individual firms. As what drives this disagreement is unclear, we examine whether a firm's ESG disclosure helps explain some of this disagreement. We predict and find that greater ESG disclosure actually leads to greater ESG rating disagreement. These findings hold using firm fixed effects and using a difference-in-differences design with mandatory ESG disclosure shocks. We also find that raters disagree more about ESG outcome metrics than input metrics (policies), and that disclosure appears to amplify disagreement more for outcomes. Last, we examine consequences of ESG disagreement and find that greater ESG disagreement is associated with higher return volatility, larger absolute price movements, and a lower likelihood of issuing external financing. Overall, our findings highlight that ESG disclosure generally exacerbates ESG rating disagreement rather than resolves it.

Author #1Dane M Christensen
Affiliation Author #1University of Oregon
Author #2George Serafeim
Affiliation Author #2Harvard University
Author #3Anywhere Sikochi
Affiliation Author #3Harvard University