Finance for a sustainable world. Three essays on sustainable finance.

Abstract

This thesis is made up of three essays on sustainable finance, which aim to make a little contribution tothe environmental and social well-being of our world and the society as a whole. The order of thechapters follows the logical development of improvements in this area within sustainable finance:First, ESG data are needed. Companies are one of the main actors in the economy and can play a big rolein the achievement (or non-achievement) of sustainability. Therefore, we need companies to report ESGinformation. To learn how to foster the process of improvement in ESG reporting, we need to analyse thefactors that make wider reporting possible. In my study I find that reporting patterns are different forenvironmental and social information and governance information.Second, once data are available, they must be processed, because rough data are not very useful as a basisfor decision-making. Therefore, Chapter 2 proposes two measures: the Relative Sustainable PerformanceMeasure (RSPM) and the Measure of Commitment-failure (MC), which permit sustainable decisionmaking taking not just financial but environmental and social variables into consideration.Finally, it is also important to know whether those measures are actually being used in the real world. InChapter 3, I test whether credit ratings take the above-mentioned measures into account. I find thatcompanies with higher sustainability performance levels tend to have higher credit ratings, thoughperforming less consistently over time seems to have no effect.