Unlocking Forecast Quality: The Power of Material Sustainability Disclosures
In 2013, the Sustainability Accounting Standards Board (SASB) began releasing guidelines to identify material (or financially relevant) sustainability metrics. This study investigates the effects of material and immaterial sustainability activities on analyst forecast error and dispersion. We further examine how these effects are influenced by the issuance of stand-alone sustainability reports and the release of SASB’s material sustainability standards.
Effects of Greenhouse Gas Emissions and Climate Change Policy on Audit Fees
This study explores the correlation between greenhouse gas (GHG) emissions from U.S. companies and their audit fees, driven by the escalating frequency and intensity of extreme weather events. Building on prior research that connects climate risk, regulation, and audit fees, our investigation uses a sample of companies with Scope 1 GHG emissions sourced from the U.S. Environmental Protection Agency’s (EPA’s) Greenhouse Gas Reporting Program (GHGRP). Our results show a positive association between GHG emissions and audit fees.
Biodiversity Entrepreneurship
We study an emerging class of start-up organizations focused on biodiversity conservation and the challenges they face in financing these ventures. Using a novel machine learning method, we identify 630 biodiversity-linked start-ups in PitchBook and compare their financing dynamics to other ventures. Biodiversity start-ups raise less capital but attract a broader coalition of investors, including not only venture capitalists (“value investors”) but also mission-aligned impact funds and public institutions (“values investors”).
EPA Scrutiny and Voluntary Environmental Disclosures
Market participants have called on the SEC to address the lack of disclosures about firms’ environmental impacts, investments, and exposures. However, the frictions that obstruct the flow of environmental information are not well understood. I shed light on these frictions by examining whether scrutiny by the Environmental Protection Agency (EPA) restricts the firm’s voluntary environmental disclosures in earnings conference calls.
Applied AI for finance and accounting: Alternative data and opportunities
Big data and artificial intelligence (AI) have transformed the finance industry by altering the way data and information are generated, processed, and incorporated into decision-making processes. Data and information have emerged as a new class of assets, facilitating efficient contracting and risk-sharing among corporate stakeholders. Researchers have also increasingly embraced machine learning and AI analytics tools, which enable them to exploit empirical evidence to an extent that far surpasses traditional methodologies.