ESG News, Future Cash Flows, and Firm Value

François Derrien, Philipp Krueger, Tianhao Yao

2022 | Academic | Risk & Performance, Valuation

Through the use of a global sample, this paper examines how negative ESG news impacts the revisions of earnings forecasts by analysts. Following the occurrence of negative ESG incidents, we document significant downward revisions of earnings forecasts over both short horizons (one quarter) and longer horizons (three years).