The ESG-Innovation Disconnect: Evidence from Green Patenting / Lauren Cohen, Umit G. Gurun, Quoc H. Nguyen.

Author
Cohen, Lauren [Browse]
Format
Book
Language
English
Published/​Created
Cambridge, Mass. National Bureau of Economic Research 2020.
Description
1 online resource: illustrations (black and white);

Details

Series
  • Working Paper Series (National Bureau of Economic Research) no. w27990. [More in this series]
  • NBER working paper series no. w27990
Summary note
No firm or sector of the global economy is untouched by innovation. In equilibrium, innovators will flock to (and innovation will occur where) the returns to innovative capital are the highest. In this paper, we document a strong empirical pattern in green patent production. Specifically, we find that oil, gas, and energy-producing firms - firms with lower Environmental, Social, and Governance (ESG) scores, and who are often explicitly excluded from ESG funds' investment universe - are key innovators in the United States' green patent landscape. These energy producers produce more, and significantly higher quality, green innovation. Our findings raise important questions as to whether the current exclusions of many ESG-focused policies - along with the increasing incidence of explicit divestiture campaigns - are optimal, or whether reward-based incentives would lead to more efficient innovative outcomes.
Notes
October 2020.
Source of description
Print version record
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