Purpose – This paper aims to identify the relative contribution of sustainability criteria to property value risk. Design/methodology/approach – Adiscounted cash flow (DCF) model is used to assess the effect of a given set of 42 sustainability sub-indicators on property value. The anticipated demand for each sustainability sub-indicator is described by four future states of nature. Their impact on costs or revenue is estimated and included in the model. Subjective probability distributions describe the occurrence of the future states of nature. Monte Carlo simulations of the DCF model are then used to estimate the impact of an individual feature on the risk (volatility) of the property value distribution. Findings – The results for Switzerland show that “use of thermal energy” (29.3 per cent), followed by “access to public transportation” (16.3 per cent), “day light” (9.6 per cent) and “story height” (6.3 per cent) have the highest single impact on property value risk. Practical implications – The results are used for a risk-based weighting of a sustainability rating. The rating illustrates how sustainability criteria affect the risk of specific properties and are used as a basis for real estate investment decisions. Originality/value – In this paper, an effort is made to rigorously ground sustainability ratings in financial theory.
Die neue Veröffentlichung des CCRS gibt einen Überblick über bewährte und neuere Rendite- und Risikokennzahlen für Immobilien und beurteilt sie aus Nachhaltigkeitssicht. Herausgegeben wird sie gemeinsam mit RICS Switzerland und dem Verband der Immobilieninvestoren sowie Immobilien Basel-Stadt, Migros-Pensionskasse, Liegenschaftenverwaltung Stadt Zürich, SUVA, Swisscanto und Zürcher Kantonalbank.
Was sind die Ursachen hoher Preisvolatilität auf den globalen Agrarmärkten? In der öffentlichen Diskussion wird oft die «Finanzialisierung» des Agrarhandels für die stark schwankenden Nahrungsmittelpreise verantwortlich gemacht. Dabei wird übersehen, dass Preisbewegungen primär auf Veränderungen der Verfügbarkeit von global handelbaren Nahrungsmitteln zurückzuführen sind. Diese realwirtschaftlichen Verhältnisse werden von der Politik und weniger von Finanzmärkten, die diese primär nachbilden, beeinflusst. Nachhaltige Ernährungssicherung bedingt institutionelle Rahmenbedingungen, die Anreize schaffen, in die Landwirtschaft zu investieren, und den fairen Handel mit Agrargütern ermöglichen.
Agricultural innovation in low-income tropical countries ontributes to a more effective and sustainable use of natural resources and reduces hunger and poverty through economic development in rural areas. Yet, despite numerous recent public and private initiatives to develop capacities for agricultural innovation, such in itiatives are often not well aligned with national efforts to revive existing Agricultural Innovation Systems (AIS). In an effort to improve coordination and responsiveness of Capacity Development (CD) initiatives, the G20 Agriculture Ministers requested the Food and Agriculture Organization of the United Nations (FAO) to lead the development of a Tropical Agricultural Platform (TAP), which is designed to improve coherence and coordination of CD for agricultural innovation in the tropics. This paper presents a summary of the results obtained from three regional needs assessments undertaken by TAP and its partners. The surveyed tropical regions were Southeast Asia, Sub-Saharan Africa and Central America. The findings reveal a mismatch in all three regions between the external supply of primarily individual CD and the actual demand for institutional CD. The misalignment might be addressed by strengthening south-south and triangular collaboration and by improving the institutional capacities that would render national AIS more demand-oriented and responsive to the needs of mallholders in domestic agriculture.
In capitalist societies it is the role of the state to establish the preconditions that promote societal well-being through proper functioning markets.
On the other hand enterprises have a right to provide goods and services in return for private profit. This sharp contrast between government and corporate responsibilities is created by a theoretical idealized first-best world.
Only governments have the legitimacy and the power to overcome free riding and collective action problems which cause market ineficiencies such as negative externalities and underprovision of public goods. With this classical
dichotomy between state and corporate responsibilities in mind, at first glance it seems puzzling that some firms also seem to provide public goods. They other goods and services or operate in a manner which can be characterized
as the private provision of public goods.
This thesis asks how information about the voluntary private provision of public goods, also known as corporate social responsibility (CSR), affects asset prices. Since the stock market has a disciplining effect on corporations,
stock price reactions capture the possibilities and limits of voluntary corporate action. The thesis proposes some answers to the question of whether corporate acts that do primarily benefit stakeholders without share ownership
are against the interest of shareholders, and, if so, under which circumstances. The first chapter starts with a broad introduction to the topic. It discusses the role of government on the basis of welfare theory and market failures. In addition, it emphasizes the moral dimension of voluntary action and explains the link between the private provision of public goods and CSR. Because the thesis studies asset price reactions, relevant finance concepts are introduced. Furthermore, the ambition and contribution of the thesis is outlined.
The first chapter gives short summaries of chapter two to five and offers a primer on portfolio theory to foster understanding of the last two chapters. It closes with a description of the findings and discusses their implications.
Chapters 2 and 3 contribute to the literature on voluntary firm action by introducing the role of regulatory pressure for asset price reactions. Both chapters study corporate efforts to reduce carbon emissions. Chapter 2 asks
whether the carbon intensity of a firm carries any information on its growth opportunities as measured by Tobin's Q. Panel regressions that account for unobserved firm heterogeneity and autocorrelation, tackle this question by using carbon emission data on the global firm level. In order to obtain insight into the role of regulatory pressure for the relationship between carbon
intensity and Q, two countries with different regulatory regimes are juxtaposed.
Chapter 3 explores one specific motivation for firms to join voluntary environmental agreements: the anticipation of more restrictive future regulation. The research design explores in an event-study stock market reactions for
firms in two popular corporate climate initiatives, when the likelihood for stricter federal carbon emission regulation suddenly increases. Additionally, the market reactions for membership announcement in these initiatives are evaluated and discussed.
The last two chapters investigate whether voluntary investment screens used in socially responsible investing (SRI) have any implications for financial performance. These two chapters are complementary and analyze the risk
adjusted return performance of synthetically constructed portfolios that are unaffected by skill or luck of asset managers. Chapter 3 analyzes portfolios of high market capitalization firms from Europe and the United States. Even
though firms from many industries are excluded in the creening process, the risk adjusted returns for these SRI portfolios are neutral in both markets. In Chapter 4 a distinct portfolio of small European growth firms with an innovative strategic CSR implementation is put to the test. Bad model problems prevalent for portfolios with the observed characteristics are addressed by using a novel robustness check and the finding of positive abnormal performance obtained by conventional methods is confirmed. It is argued that two different hypotheses, one of them under appreciated in the literature, might be responsible for this apparent market inefficiency.
Nachhaltige Landwirtschaft wird in Wohlstandgesellschaften wie der unseren gerne mit der Förderung von Bio und Fair Trade in Verbindung gebracht. Kaum jemand kennt jedoch Standards der Nachhaltigkeit wie Rainforest Alliance, UTZ (Umwelt- und Sozialbestimmungen), SA8000 (Arbeiterschutz) oder Technoserve (Armutsbekämpfung durch Ermächtigung zum Unternehmertum). Bei diesen Labels sollen die Nachhaltigkeitsziele möglichst pragmatisch und effektiv erreicht werden. So kennen sie keine Vorschriften, welche etwa eine Zusammenarbeit mit Multis oder den Einsatz neuer Technologien per se ausschliessen - sofern die strikten Nachhaltigkeitskriterien erfüllt werden.
Bei Investitionsentscheidungen ist nicht nur die Rendite von Interesse, sondern auch das Risiko. Dies gilt bei Aktien- genauso wie bei Immobilienanlagen. Die Diskussion um Nachhaltigkeit ist u.a. geprägt vom Wunsch, Gutes zu tun. Aus Sicht von Unternehmen spielt dies im Zusammenhang mit Corporate Social Responsiblity eine wichtige Rolle. Aus Investitionssicht steht allerdings die Frage nach der finanziellen Relevanz von Nachhaltigkeit im Vordergrund. Bei Immobilien gibt es empirische Evidenz dafür, dass es einen positiven Zusammenhang zwischen gewissen Nachhaltigkeitsmerkmalen und der finanziellen Performance gibt. So erzielen energieeffiziente Immobilien oder solche mit gutem ÖV-Anschluss im Schnitt höhere Transaktions- und Mietpreise.
Investitionsentscheidungen fallen entlang des Lebenszyklus einer Immobilie immer wieder an: Standort- und Bauentscheidung, Sanierungs- und/oder Abrissentscheidungen. Dafür braucht es fundierte Grundlagen: Welche Nachhaltigkeitsmerkmale beeinflussen wie stark die finanzielle Performance? Damit wird es möglich, Nachhaltigkeit entsprechend der finanziellen Auswirkung bei den verschiedenen Investitionsentscheidungen einzubeziehen. Dies ist bei Immobilieninvestitionen umso wichtiger, weil diese in der Regel mit viel Geld verbunden sind. Die Entscheidungen, die heute getroffen werden, sind von deshalb von hoher Relevanz für den finanziellen Erfolg in der Zukunft. Von besonderem Interesse ist deshalb neben der Rendite, das Risiko der Wertentwicklung einer Immobilie.
Under conditions of growing interconnected- ness of the global economy, more and more stakeholders are exposed to risks and costs resulting from business activities that are neither regulated nor compensated for by means of national governance. The changing distribution of risks poses a threat to the legitimacy of business firms that normally derive their legitimacy from operating in com- pliance with the legal rules of democratic nation states. However, during the process of globalization, the regula- tory power of nation states has been weakened and many production processes have been shifted to states with weak regulatory frameworks where businesses operate outside the reach of the democratic nation state. As a result, business firms have to address the various legitimacy challenges of their operations directly and cannot rely upon the legitimacy of their regulatory environment. These developments challenge the dominant approach to corpo- rate governance that regards shareholders as the only stakeholder group in need of special protection due to risks not covered by contracts and legal regulations. On the basis of these considerations, we argue for a democratization of corporate governance structures in order to compensate for the governance deficits in their regulatory environment and to cope with the changing allocation of risks and costs. By way of democratic involvement of various stakeholders, business firms may be able to mitigate the redistribution of individual risk and address the resulting legitimacy deficits even when operating under conditions of regulatory gaps and governance failure.
