“Executive Ownership and Sustainability Performance” by G. Gianfrate, winner of the SIIIC Best Paper Award 2022

Written on 22 Dec 2022.

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The Social Impact Investments International Conference (SIIIC) was launched in 2017 by the Department of Management of the University of Rome “La Sapienza” as an annual meeting for international scholars, practitioners and policy makers from the field of social impact finance.


Every year the SIIIC Scientific Committee selects the most interesting papers presented.


On December 1st, Gianfranco Gianfrate, Research Director at EDHEC-Risk Climate Impact Institute and Professor of Finance, EDHEC Business School, presented his paper "Executive Ownership and Sustainability Performance" during the session on Sustainability & Corporate Governance.

Gianfranco’s paper won the SIIIC Best Paper Award 2022, in recognition of its excellent structure and methodology and very interesting results.


SIIIC Best Paper Award 2022

Two other researchers won the best paper award:

  • “Investor preferences, financial literacy and intermediary choice towards sustainability” by Maria Gaia Soana, Doriana Cucinelli
  • “Portfolio Allocation and Optimization with Carbon Offsets. Is it Worth the While?” by Patrick Behr, Carsten Mueller, Papa Orgen


Gianfranco and his co-authors, Marco Ghitti (University of Padua - Department of Economics and Management) and Edoardo Reccagni (Bocconi University), examined executive ownership in publicly traded companies in the US and found that when a CEO has a personal stake in a company’s financial success, ESG goals – while perhaps openly stated on the company’s website and in investor relations materials – are often set aside.

The authors collected firm-level sustainability data (environmental and social) from 742 US corporations and reviewed their key performance indicators (KPIs). They merged this data set with one comprising executive ownership information for the same firms from 2002 to 2019 and found that executive ownership leads to a 13.1% drop in ESG performance.

Professor Gianfrate’s research supports the view that while executive ownership does align the financial objectives of management and shareholders, a business’ sustainability performance is penalised when executives own shares. He believes that alternative governance mechanisms, those that include a wider range of Environment & Social stakeholders, should be added.  


“Our findings were particularly striking for the US, where our data showed that a superior corporate sustainability footprint can protect a firm’s value despite impressive disruption from outside sources,” says Gianfranco Gianfrate for the Banker.


These insightful results have been released by The Banker Executive ownership – a bad deal for ESG and by Sustainable Views (FT Group).