Why and How Investors Use ESG Information: Evidence from a Global Survey

The respondents' high average ESG share of 41% exceeds the percentages reported in other studies, reflecting potential sampling bias.

“This potential sampling bias is reflected in our respondents' high average ESG share of 41%, which exceeds the percentages reported in other studies.”

Professional investors focus primarily on CSR information that they consider financially material.

“More nuanced findings suggest that professional investors focus primarily on CSR information that they consider financially material (Amel-Zadeh and Serafeim 2018), that individual investors perceive CSR disclosures as more important (and as increasing their willingness to invest) if CSR activities are relevant to the firm’s strategy (Cheng et al. 2015), and that CSR disclosures affect investor”

In response to or in anticipation of such behavior, firms could reduce their negative externalities.

“In response to or in anticipation of such behavior, firms could reduce their negative externalities (e.g., Amel-Zadeh and Serafeim 2018).”

As a result, standard setters ex ante and managers ex post face substantial discretion in assessing the materiality of CSR topics.

“As a result, standard setters (ex ante) and managers (ex post) face substantial discretion in assessing the materiality of CSR topics (Matsumura et al. 2017; Amel-Zadeh and Serafeim 2018).”