A0890
Title: Pattern and dynamics of ESG scores of European firms: Spatiotemporal cluster analysis
Authors: Caterina Morelli - University of Milan Bicocca (Italy) [presenting]
Simone Boccaletti - University of Milano-Bicocca (Italy)
Paolo Maranzano - University of Milano-Bicocca & Fondazione Eni Enrico Mattei (Italy)
Philipp Otto - University of Glasgow (United Kingdom)
Abstract: The assessment of corporate sustainability performance is extremely relevant in facilitating the transition to a green and low-carbon intensity economy. However, companies located in different areas may be subject to different sustainability and environmental risks and policies. Henceforth, the main objective is to investigate the spatial and temporal pattern of the sustainability evaluations of European firms. A large dataset is leveraged, containing information about companies' sustainability performances, measured by MSCI ESG ratings and geographical coordinates of firms in Western Europe between 2013 and 2023. By means of a modified version of the hierarchical algorithm, a spatial clustering analysis is conducted, combining sustainability and spatial information, and a spatiotemporal clustering analysis, which combines the time dynamics of multiple sustainability features and spatial dissimilarities, to detect groups of firms with homogeneous sustainability performance. Cross-national and cross-industry clusters are built with remarkable differences in terms of sustainability scores. The findings help to capture the diversity of ESG ratings across Western Europe and may assist practitioners and policymakers in evaluating companies facing different sustainability-linked risks in different areas.
