Best paper award for FS professors Kornelia Fabisik and Zacharias Sautner

Professors Kornelia Fabisik, Assistant Professor of Finance, and Zacharias Sautner, Professor of Finance, have won the best paper award at one of the most prestigious corporate governance conferences. The 2022 Corporate Governance Symposium organised at University of Delaware in cooperation with the European Corporate Governance Institute (ECGI) awarded the paper “Is History Repeating Itself? The (Un)Predictable Past of ESG Ratings”. The John L. Weinberg/IRRCi research award is endowed with USD 10,000.

In the paper, co-authored with Florian Berg, the authors show that one of the key ESG rating providers has been rewriting not only the current, but also the historical ESG ratings in their database. Their findings have widespread implications for both the academic research as well as the investment practice. For example, in data downloads from different years, the ESG data of the same company differ for every third company that belongs to the top decile in terms of ESG aspects. The ESG data rewriting is an ongoing rather than a one-off phenomenon.

Depending on whether the original or rewritten data are used, ESG-based classifications of firms that relate ESG scores to returns change. While there is a positive link between ESG scores and firms’ stock market performance in the rewritten data, such a relationship cannot be observed in the initial data.

The complete paper is available for download here.