IMAP Hosts Research on Tap Event

Seven BU researchers. Six-minute lightening talks on the topic of measuring corporate impacts on the environment and society. Mingling over hors d’oeuvres and drinks.

This was the set up for the recent IMAP-hosted Research on Tap, organized by BU’s Office of Research. IMAP Director, Nalin Kulatilaka welcomed the attendees and pointed out that what made this event somewhat unique is that it was from the point of view of businesses, whose actions affect us all in both good ways – and bad. He highlighted IMAP’s Corporate Carbon Risk project and pointed out that many corporations are publicizing plans to reduce their carbon emissions, but, he said, “Not all these targets are met and not meeting these targets impose risks to the companies as well as society.” IMAP’s Corporate Carbon Risk project is visualizing targets versus actual emissions, and creating a model to predict whether a utility will meet its future carbon emissions targets.

Jonathan Buonocore of the School of Public Health talked about developing tools like COBE to incorporate health data into corporate sustainability reports that show things like CO2 emissions, water usage, and waste generated to provide a measurement of the impact of corporate activities on public health, climate, the environment, and other outcomes as a way of creating a framework to aid decision-making.

Eddie Riedl, of the accounting department at the Questrom School of Business, explained that ESG metrics are likely to be the next major regulatory movement in accounting and discussed his research which looked at how consistent companies current 10-K filings are with SASB recommendations on ESG disclosures. He concluded the strongest predictor of current ESG risk disclosures is what the largest companies within an industry are disclosing, rather than what SASB recommends.

Keith Ericson, of Questrom’s markets, public policy and law department, discussed his research into determining shareholders’ desired balance between maximizing profits versus enhancing ESG objectives. He found that shareholders want firms to place some weight on consumer benefits and that, in the trade-off between profit and environment, the importance assigned to the environment is two times that desired for consumers.

Jesse Chan, of Questrom’s accounting department, is looking at how financial markets integrate ESG metrics, including how stakeholders are consuming ESG data, how firms are communicating ESG-related metrics, and how ESG issues affect market participant behavior. There’s an increased standardization in ESG reporting, a growing role of the use of advanced technologies in ESG reporting, and an increased divergence in how people view ESG issues and reporting, including some backlash.

Shuba Srinivasan, of Questrom’s marketing department, talked about her research into how to predict when sociopolitical controversies will impact a company. Her research looks at low effort responses (deny, issue a statement or apology, or no response) versus high effort responses (curtailing the offending action, offering employee training, terminating an offender, suspending operations, settling lawsuits). Firms with high effort responses were shown to do better at mitigating negative talk on social media and also had a positive effect on stock returns.

Suchi Gopal, of Earth & Environment, is using satellite data to examine deforestation associated with both small and large palm oil plantations in Indonesia. With this data, she can both calculate the amount of carbon released, and identify the specific suppliers of palm oil in the supply chain that may not be following sustainable palm oil practices.