The ESG-Innovation Disconnect: Evidence from Green Patenting

By Lauren H. Cohen, Umit G. Gurun, Q. Nguyen. Social Science Research Network, 2020

146 citations recorded by the source corpus.

We document that traditional energy firms are key innovators in the United States’ green patent landscape. These firms produce more, and significantly higher-quality, green innovation. In many green technology spaces, they appear to be influential first movers and to produce ongoing foundational aspects of innovation and commercialization on which other alternative energy producers build. They additionally invest significantly in labor and capital to complement these green innovations. These traditional energy firms, however, receive significantly lower environmental, social, and governance (ESG) scores and fund flows and are not rewarded for incremental green innovation. This behavior is consistent with a competitive response by traditional energy firms to preempt obsolescence of current technology by investing in future replacement technologies. This paper was accepted by Bo Becker, finance. Funding: Funding was provided by the National Science Foundation [Grant SciSIP 1535813] and the Fordham University Gabelli School of Business—PVH Corp. Global Thought Leadership Grant on Corporate Social Responsibility. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.09124 .

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9f8f36d2e7acb8ff0f638682e95c0f1f14d22796

Citations in the corpus

• Investor Rewards to Climate Responsibility: Stock-Price Responses to the Opposite Shocks of the 2016 and 2020 U.S. Elections (2021, unknown): “For instance, Cohen et al. (2020) recently document that the energy sector has a large and growing percentage of patenting activity dedicated to green research, more than other less climate-sensitive sectors.”