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source: Hombach/Sellhorn (2019)
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transparency reports regularly read by employees
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is a political progress
- no clear mandate, just reporting, just information
- peer pressure from stakeholders and competitors
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no guarantee that the intended objectives are achieved
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free market forces still apply, if the market doesn’t care about sustainability they simply don’t
Channels
- internal information channel
- have the data available internally for educated decisions
- transparency action channel
- peer pressure
- competition on sustainability
- firm’s actions
- actual changes in behavior, not just advertised/reported
Empirical Evidence
- Hummel/Jobst (2024)
- difference between EU and US/CH companies/loans
- companies with higher sustainability performance have lower loan costs
- Difference in Difference method
Intermediaries
- rating agencies → Rating Suppliers
- AAA, AA, A, etc