Seminar (Dept. of General Management)

Theme： Limits of ESG Investing? Challenges from Global Supply Chain

Speaker：Shipeng Yan (The University of Hong Kong)

Time：2022-03-24 10:00

Address：Online Meeting

Language：Chinese/English

ABSTRACT:

A growing number of studies show that responsible investors help business firms improve their environmental performance, but we still need to know more about how business firms actually react to the increasing investor-initiated ESG pressures. Rather than making honest efforts to address environmental concerns, we explore a much less examined mechanism: firms may circumvent the pressures of ESG investors by engaging in potentially insidious moves, such as increasing their own ESG performance at the expense of others. Due to its lack of visibility, the increasingly complex global supply chain of modern firms provides such an opportunity. Analyzing a dataset of global firms from 2007 to 2017, we predict and find causal evidence that, with an increase in a buyer’s ownership from responsible investors, measured by signatory status in PRI, its suppliers’ ESG performance declines. Analysis based on exogenous increases in buyer ownership from responsible investors, such as M&A and regulatory change in ownership code, affirms this relationship. Our study contributes to research on corporate social responsibility and the pollution heaven hypothesis.

SHORT BIOGRAPHY:

Dr. Shipeng YAN is a management scholar with an institutional lens, a sociological orientation, and an interest in markets and organizations. In particular, he is keen to study (1) comparative dynamics of institutional arrangements across countries; (2) the emergence of new markets and strategies of nascent organizations in these markets; (3) the relationship between finance and society. His research works have appeared in prestigious journals such as Administrative Science Quarterly, Organization Science, and Journal of International Business Studies.