There are numerous risk factors in asset pricing models that have been identified over the years. In this paper, we address the question of whether factors constructed using ESG (Environmental, Social, Governance) scores could potentially meet the necessary requirements for risk factors in...

Joining voluntary thematic initiatives can be a means for firms to legitimate their business activities. However, a lack of review mechanisms could create incentives for free-riding. This might lead to a lower commitment to the initiative’s principles, and endanger its credibility and its...