Emma Sjöström

Social Impact Bonds (SIBs) demonstrate the growing interest in innovative financing solutions that seek to address complex social challenges through cross-sector collaboration. This paper reviews experience of implementing SIBs, drawing insights from case studies and interviews to identify the lessons learned that can inform the design and implementation of future SIBs. Our analysis reveals inherent tensions between flexibility and standardization, between stakeholder expectations and outcome attainability, as well as between the context-specific nature of SIBs and the scope for creating a replicable model. A thematic analysis of qualitative data from 30 SIB case studies contributes to the empirical literature on social financing, providing actionable insights for policymakers, investors and service providers engaged in or considering SIBs as a mechanism for social change.

We examine how the authority of investors to speak about climate change with corporations is established. Leveraging the ‘communication as constitutive of organisations’ (CCO) perspective, we analyse who speaks on behalf of whom (or what) in shareholder engagement on corporate carbon emissions. Based on access to private dialogues between an engager acting on behalf of a pool of investors with 20 utility corporations, we identify how three authoritative personae—that of diplomat, advocate, and coach—convey climate change concerns. We find that the mirroring of these authoritative personae by corporations may lead to deliberation, evasion, or rejection of the suggested courses of action. We theorise how relational authority is communicatively constituted in shareholder engagement through a process of mirroring and switching between authoritative personae. Our framework contributes to the study of CCO and relational authority by highlighting how meta-figures are used by external actors in an attempt to author appropriate corporate actions. We discuss the implications of our framework for the role of shareholder engagement in current attempts at greening financial capitalism.

Financial market actors are subject to mounting demands to integrate environmental, social and governance (ESG) issues into financial analysis. To make non-financial issues “work with” the existing modus and format of financial analysis has however turned out to be something of a struggle. In this paper, we explore how financial actors cope with ESG integration, and in particular the financialization of ESG. More generally we seek to better understand how existing calculative practices accommodate new “frames” (Callon, 1998). To do this, we draw on the notion of sociomaterial assemblages i.e. the arrangements of human beings and material entities, and examine existing and ESG-oriented assemblages in the Swedish financial market. We propose a sociomaterial process model of calculability for how new frames are introduced, in four parts. We find that central to this process is bricolage, which contributes to the reframing process and to a better appropriation of new frames by existing assemblages.

Climate change is a major concern for many companies, but it has not historically featured much in earnings conference calls. We find a marked increase in climate talk on these calls in recent years. We also find that climate talk is negatively related to the change in CO2 emissions (especially Scope 2) in the year after the call, particularly in firms with high overall environmental and governance ratings. Conversely, investors react particularly negatively to climate talk when it comes from a firm with low levels of ESG performance or following poor earnings performance. Finally, a firm employs more climate talk when it is more material, when there is greater shareholder pressure or when it is better prepared for climate-related disclosure. Overall, these results suggest that investors and other stakeholders interested in corporate climate action should be paying attention to earnings conference calls as a source of useful information about companies’ broader stance on climate-related issues.

Many investors and companies around the world now agree that sustainability can directly influence the evaluation of companies’ current and future financial performance. For this reason, it has become central to understand how sustainability—or environmental, social and governance (ESG) issues1 —can be integrated into financial analysis. This is a task not just for financial analysts, however, but also for the portfolio managers who buy such analysis from sell-side researchers, as well as the officers who handle investor relations at the listed companies that are the target of financial analysis and investment. It is therefore important to study the interaction between these three actor groups, in order to better understand the drivers of and challenges for integrating ESG issues into financial analysis. This report extends the results of a 2019 study by Swesif, Stockholm School of Economics (SSE) and the Stockholm Environment Institute (SEI) on the theme of integrating long-term perspectives into financial analysis.2 Both reports include all three actor groups. While the first study was survey-based, and addressed ESG only implicitly through its focus on long-term issues, this report provides more context by using interviews to document how the different actors view the integration of sustainability into their work. To this end, we draw on 30 interviews with Swedish financial actors: 10 from the sell-side, 10 from the buy-side and 10 from the corporate side.Our study makes four main contributions: • First, our study indicates that there has been a notable increase in sell-side analysts’ focus on sustainability in the past two years. We identify three major drivers of this change: investors’ growing interest in ESG issues, the EU taxonomy on sustainability activities, and the increased attention paid to and understanding of the financial relevance of ESG. • Second, while previous studies have emphasised that financial analysts’ short-termism may have spurred markets to overlook sustainability risks, we found that participants in our study did not view short-term pressures as a major impediment. They do however highlight the need to balance shortterm and long-term issues in order to better integrate ESG issues. The quarterly earnings call is a typical setting where companies often struggle to frame ESG issues in a financial context. • Third, quantifying ESG aspects is perceived as a major challenge when integrating ESG issues into financial analysis. Our results show that initial progress has been made as some financial actors do factor either ESG scores or materiality assessments into their financial valuations. The EU taxonomy and the harmonisation of other reporting standards are perceived as important tools for further supporting these advances. Many interviewees, however, insisted that there is also ample room for qualitative assessments of ESG issues in financial analysis. • Lastly, our findings highlight the importance of access to sufficient and high-quality ESG-related skills and resources. Most of our interviewees rely on an important variety of sources for ESG information, but largely learn how to make use of these sources “on the job”. We find that dedicated ESG teams and the involvement of companies’ sustainability officers provide important support, especially in the early phases of a learning curve.

In this chapter, we explore the motivations of sustainability-oriented investors for directing capital towards sustainable production and consumption practices. Whereas in public communication it is often framed in financial terms, i.e. that a focus on sustainability is a way to generate long-term shareholder value, some investors may also be motivated by “doing good” and by an urge to contribute to a sustainable future. These two rationales build on different logics, and may produce different strategies on part of the investors, and have different outcomes. The financial logic has a theoretical or mind-to-world direction of fit, and it requires investors to adopt a reactive and hypothetical stance towards sustainability issues. The moral logic, on the other hand, has a practical or world-to-mind direction of fit, and it requires investors to adopt a proactive and categorical stance to sustainability issues. In this chapter we reflect on what this might entail for sustainable production and consumption.

One of the most important forums for companies to disclose financial information to the market is the quarterly earnings call. Environmental, social and governance (ESG) issues are gaining increased traction among institutional investors but are yet to find a place in the earnings call. We launched the Action Lab project, which was a facilitated process of investor relations and sustainability functions working together to communicate ESG factors in the earnings call setting. Three publicly listed companies committed to work with us in the lead-up to the third quarter 2017 call, when they would include ESG dimensions in their presentations. Five major challenges emerged from our research. First, there is a chicken and egg situation in which companies do not convey ESG information because they think analysts are not interested, and analyst do not ask ESG-related questions because there is no ESG-related information for them to base questions on. Second, it is challenging to quantify ESG factors in ways that fit analysts’ models. Third, the earnings call is a highly ritualized event and there is a reluctance to change the format. Fourth, there is a fear on the company side that ESG issues might be perceived as greenwashing, especially in times of weaker financial performance. Finally, ESG perspectives are typically too long-term to fit the focus of a short-term earnings call, and might therefore be better suited to other forums.

CSR OCH HÅLLBART FÖRETAGANDE introducerar många perspektiv på företagens sociala ansvar och hållbart företagande, samt hur de olika perspektiven hänger ihop. Resonemangen knyter an till verkliga exempel och fall.
Utvecklingen inom CSR har gått snabbt inom både politik och företagande. Fenomen som socialt entreprenörskap, hållbara affärsstrategier och nya finansiella modeller kring hållbarhet har vuxit sig allt starkare. Nytt i denna upplaga är att de globala hållbarhetsmålen diskuteras mer ingående och ett helt nytt kapitel har tillkommit som diskuterar begrepp och fenomen kopplade till mångfald och integration. Boken ger både en överblick över de viktigaste koncepten och teorierna samt ett djup kring historiska perspektiv och företagsetiska kopplingar. Teori varvas med exempel från en lång rad företag och organisationer.

CSR AND SUSTAINABLE BUSINESS introduces many perspectives on corporate social responsibility and sustainable business, as well as how the different perspectives are connected. The discussion is based on real examples and cases.The development within CSR has been moving quickly, both in politics and in business. Phenomena, like social entrepreneurism, sustainable business strategies and new financial models relating to sustainability, have grown stronger. This book gives an overview of the most important concepts and theories, as well as offering a depth of historical perspectives and connections to business ethics. Theoretical aspects are combined with examples from a large number of companies and organizations. The text is divided into three parts. The first part provides an overview of the topic, its history and growth. The second part covers practices at companies and business operations. In the third part, the focus is on control and strategies for responsible, sustainable business.

The 2020 COVID-19 pandemic and social and economic responses are amplifying social inequalities and hampering strategic, long-term investments into sustainability by firms and governments. Researchers affiliated with Misum (Mistra Center for Sustainable Markets) discuss how the global response to the pandemic has slowed progress toward the Sustainable Development Goals adopted by the United Nations in 2015. The article emphasizes that low-income groups are most affected by the economic consequences of the coronavirus crisis, that the pandemic is reducing the ability and willingness of firms to make strategic investments, and that companies and governments need to deploy resources that ensure a sustainable recovery from the crisis.