Corporate social irresponsibility: The relationship between ESG misconduct and the cost of equity
研究了2007至2017年间MSCI美国指数中731家公司的媒体负面报道（代表企业社会不负责任）与股权成本的关系，发现ESG不当行为会提高股权成本，且对高ESG评分公司影响更大。
Reputational risk arising from environmental, social, and governance (ESG) conduct is increasingly relevant. This paper studies the role of media coverage related to corporate social irresponsibility (measured by RepRisk) as a source of reputational risk for public companies by verifying the relationship with the cost of equity. The research covers a decade of data, from 2007 to 2017, relative to 731 firms included in the MSCI USA Index. Our results show a positive relationship between reputational risk and the cost of equity capital, demonstrating a positive effect of corporate misconduct on the cost of equity for all three categories of risk: environmental, social, and governance. The magnitude of this impact is greater for social risks than for environmental and governance risks. We also find that the cost of misconduct is higher for companies with higher ESG scores than for those with lower ESG scores. Our findings are relevant for practitioners and policy makers, since the cost of equity is one of the channels through which capital markets can encourage firms to make effective efforts aimed at reducing their ESG incidents.