Variable definition
| Variable | Definition | Source |
|---|---|---|
| Dependent variables | ||
| ESG_SCOREit | Natural log of ESG score after adding 1, with ESG score being an overall company score based on the self-reported information in the environmental, social and corporate governance pillars | London Stock Exchange Group (LSEG) Refinitiv Workspace |
| ESG_COMBit | Natural log of ESG combined score after adding 1, with the combined score being the ESG score with an ESG Controversies overlay | LSEG Refinitiv Workspace |
| ESG_AVEit | Natural log of the unweighted average of environmental, governance and social pillar scores after adding 1. The environmental pillar measures a company’s impact on living and non-living natural systems, including the air, land and water, as well as complete ecosystems. The corporate governance pillar measures a company’s systems and processes, which ensure that its board members and executives act in the best interests of its long-term shareholders. The social pillar measures a company’s capacity to generate trust and loyalty with its workforce, customers and society, through its use of best management practices | LSEG Refinitiv Workspace |
| Independent/control variables | ||
| AC_INDit | Percentage of independent board members on the audit committee as stipulated by the company | LSEG Refinitiv Workspace |
| GENDitCEODit | Percentage of females on the board. If the firm’s chairperson is also the CEO, score = 1, otherwise score 0 | LSEG Refinitiv Workspace LSEG Refinitiv Workspace |
| POLit | If firm has policy on board size, score = 1, otherwise 0 | LSEG Refinitiv Workspace |
| TAit | Natural of total assets after adding 1, which represents the total assets reported by a company. In case the total assets is not reported, it will be the sum of the following items: total current assets, total non-current assets | LSEG Refinitiv Workspace |
| CEOMit | If CEO of firm is a board member, score = 1, otherwise 0 | LSEG Refinitiv Workspace |
| BTENit | The average number of years each board member has been on the board | LSEG Refinitiv Workspace |
| ATENit | The number of years current auditor is serving the organization | LSEG Refinitiv Workspace |
| Instrumental variables | ||
| AC_MGTit | If the company reports that all audit committee members are non-executives, score = 1, otherwise 0 | LSEG Refinitiv Workspace |
| Variable | Definition | Source |
|---|---|---|
| Natural log of | London Stock Exchange Group ( | |
| Natural log of | ||
| Natural log of the unweighted average of environmental, governance and social pillar scores after adding 1. The environmental pillar measures a company’s impact on living and non-living natural systems, including the air, land and water, as well as complete ecosystems. The corporate governance pillar measures a company’s systems and processes, which ensure that its board members and executives act in the best interests of its long-term shareholders. The social pillar measures a company’s capacity to generate trust and loyalty with its workforce, customers and society, through its use of best management practices | ||
| Percentage of independent board members on the audit committee as stipulated by the company | ||
| Percentage of females on the board. If the firm’s chairperson is also the CEO, score = 1, otherwise score 0 | ||
| If firm has policy on board size, score = 1, otherwise 0 | ||
| Natural of total assets after adding 1, which represents the total assets reported by a company. In case the total assets is not reported, it will be the sum of the following items: total current assets, total non-current assets | ||
| If | ||
| The average number of years each board member has been on the board | ||
| The number of years current auditor is serving the organization | ||
| If the company reports that all audit committee members are non-executives, score = 1, otherwise 0 | ||
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