Research

Implied temperature rise (ITR) metrics translate corporate emissions pathways into a temperature-based measure of climate alignment and are used to assess climate alignment at the company and portfolio levels. This paper examines the consistency across providers and practical relevance of ITR metrics. Using data from four major providers, we document substantial disagreement in reported climate-alignment outcomes. Cross-provider correlations at the company level are close to zero. Observable company characteristics explain little of the variation, indicating that provider-specific methodological choices are the main source of divergence. This disagreement does not diminish at the portfolio level and materially affects reported climate alignment for optimized portfolios and Paris-aligned benchmark funds. We find no evidence of meaningful convergence between 2021 and 2022, despite improvements in climate-related disclosure. Overall, our findings suggest that ITR metrics should be used thoughtfully when aligning portfolios with climate goals.

This paper empirically analyzes the determinants of corporate greenwashing behavior to enhance forecasting and mitigation of greenwashing practices, particularly in the context of stakeholder decision-making. Using company-level characteristics from a sample of STOXX Europe 600 constituents, we show that ESG and environmental (E) scores exhibit a U-shaped relationship with greenwashing, indicating that companies with both low and high (E)SG scores are more likely to engage in greenwashing. Additionally, ESG disclosure score, company size, cash-to-assets, and capital intensity are positively associated with greenwashing behavior. Furthermore, greenwashing behavior is more prevalent in consumer-related industries than in other industries. Building on the identified determinants of greenwashing behavior, we develop machine learning models grounded in economic theory to forecast greenwashing risk. Overall, our analyses demonstrate how current and future greenwashing risks can be effectively assessed. This enables stakeholders such as investors and policymakers to better identify corporate greenwashing behavior and incorporate the associated risks into their decision-making.

This paper analyzes the impact of leveraged buyouts (LBOs) on the profitability of target firms’ industry peers in Europe. To address the endogeneity of LBO activity, I employ a control function approach, using the European Takeover Directive as an instrumental variable. The results indicate that peers improve their profitability following LBOs, driven by improved asset utilization and enhanced cost efficiency. Unlike the findings in the US-based literature, my analysis reveals that positive future industry developments also contribute to the overall effect. These findings suggest that the impact of LBOs on industry peers varies to some extent in the European context.

This paper shows that ESG scores capture a company’s greenwashing behavior. Greenwashing accusations are most prevalent among large companies with high ESG scores. We empirically employ a novel theoretical model that distinguishes between the communication of a company’s environmental efforts (apparent environmental performance) and its actual environmental impact (real environmental performance). The correlation of the apparent (real) environmental performance with ESG scores is significantly positive (negative). Therefore, ESG scores are unsuitable for measuring real environmental impact. Thus, investors focusing on high ESG-rated companies may unknowingly increase their greenwashing risk exposure, and academics may use misleading information to assess greenwashing risk.

Our paper provides a contribution to the literature on peer effects in leveraged buyouts and delivers an explanation for the seemingly contradicting findings in the existing literature. We find that the average peer announcement CAR amounts to −1.98%. A buyout may reveal private information about peer value and can also change in the competition within the buyout target industry. Our identification strategy to examine the information and competition channels relies on two quasi-natural experiments, which generate exogenous variation in the information and competition environments. In addition, we analyze various mechanisms within these two channels by considering the cross-section of peer CARs and by running additional tests. Our results support the revaluation and the competitive pressure hypotheses.

We examine how changes in competition affect firms’ carbon performance. Exploiting reductions in import tariffs as a quasi-natural experiment that increases competitive pressure, we find that stronger competition improves firms’ carbon efficiency through lower Scope 1 and 2 emission intensities. These results remain robust to alternative specifications, heterogeneous treatment effects, and placebo tests. Mechanism analyses indicate systematic differences in firms’ strategic responses. High-emission-intensity firms tend to adopt visible environmental actions and reallocate resources toward intangible assets, whereas low-emission firms increase investment and internal financing activities. Overall, our results highlight competition as a determinant of corporate decarbonization, suggesting that market forces can complement regulatory approaches to improving firms’ environmental performance.

This study examines how leveraged buyouts (LBOs) affect the capital structure of target firms’ industry peers. Using a sample of US public firms, I find that peer firms significantly increase their leverage ratios following LBO announcements in their industry. The effect is more pronounced in competitive industries, consistent with LBOs generating positive competitive spillovers. Managers of peer firms also use higher leverage ratios as a defense tool against potential follow-on acquisitions, independent of existing anti-takeover provisions. There is no evidence that peers increase leverage to address industry-wide agency problems signaled by LBOs. Further analyses show that the results are not driven by changes in debt supply. Overall, the findings indicate that LBOs convey valuable information for managers of industry peers regarding capital structure decisions.