How do some companies become “greener”?

Whenever you see an E score improve…  

Ask yourself: “How come?”

It is increasingly common that some listed companies (that are scrutinized about ESG) sell their “dirty” (carbon-emitting) assets to private equity (that are not too scrutinized about ESG), hence the listed companies’ scores improve, but the economy is as dirty as before.

https://www.economist.com/leaders/2022/02/12/the-truth-about-dirty-assets

Or you can see some merger activity that helps companies to appear greener…

Author: Prof. Dr. Kornelia Fabisik

Assistant Professor of Finance at the University of Bern // I do research in empirical corporate finance, corporate governance, ESG and sustainable finance. I am a recipient of the 2021 Lamfalussy Research Fellowship from the European Central Bank (ECB) as well as a Research Affiliate at the Centre for Economic Policy Research (CEPR). I worked as an Assistant Professor of Finance at the Frankfurt School of Finance & Management from August 2020 to July 2022 and in August 2022, I joined the University of Bern.