• Journal of Intelligence and Information Systems
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• v.29 no.2
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• pp.1-22
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• 2023

Existing studies on mixed ratings that combine ESG ratings and credit ratings have been rare. Through meta-frontier analysis, this study examines the relationship between the prime and non-prime groups in ESG ratings, credit ratings, and mixed ratings that consider ESG ratings and credit ratings at the same time. Efficiency was compared. Meta-frontier analysis was used to compare the efficiency of 143 listed manufacturing companies in Korea between the prime and non-prime groups based on the ESG ratings assigned to them by KCGS and the credit ratings assigned by Korea's three major credit rating agencies. As a result of this study, first, the meta-efficiency of the prime mixed-grade group was statistically more efficient than the non-prime mixed-grade group under the variable return scale (VRS) assumption. Second, the prime ESG rating group had a relatively higher proportion of scale inefficiency than the non-prime ESG rating group. Third, in terms of economies of scale, the prime credit rating group had a higher proportion of diminishing returns to scale (DRS) than the non-prime credit rating group. This study will help companies interested in sustainability management to do ESG management.

• The Journal of Industrial Distribution & Business
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• v.13 no.1
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• pp.23-32
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• 2022

Purpose: This study used ESG grade, but defined AESG, adjusted to the size of a company and examines whether it can be used as an investment strategy. Research design, data and methodology: The analysis sample in this study is a company that has given an ESG rating among companies listed on the Korea Stock Exchange. We examine the results through portfolio analysis and Fama-macbeth regression analysis. Results: As result of examining the long-only performance and the long-short performance by constructing quintile portfolios, it was observed that a significant positive return was shown. It was observed that there was an alpha that could not be explained in asset pricing models. Also, AESG had a return prediction effect in the result of a Fama-Macbeth regression that controlled corporate characteristic variables in individual stocks. Next, we confirmed AESG's usage through various portfolio composition. In the portfolio optimization, the Risk Efficient method was the most superior in terms of sharpe ratio and the construct multi-factor model with Value, Momentum and Low Vol showed statistically significant performance improvement. Conclusions: The results of this study suggest that it can be helpful in ESG investment to reflect the ESG rating of relatively small companies more through the scale adjustment of the ESG rating (i.e.AESG).

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.1
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• pp.47-65
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• 2023

As stakeholder demands and sustainable finance grow, ESG management and ESG evaluation are becoming important. SMEs should also prepare for the trends of ESG rating practices that affects supply chain management and financial transactions. However, SMEs have no choice but to focus on survival first, so there are restrictions on putting into ESG management. In addition, there is a lack of research on the legitimacy of ESG management by SMEs, and volatility in ESG evaluation systems and rating grades is also increasing. Accordingly, it is necessary to review ESG evaluation trends and practical guidelines along with the review of previous studies. As a result of the exploratory study, SMEs need to implement ESG management and make efforts to specialize in ESG related new businesses under conditions in which their survival base is guaranteed in terms of implementation strategies. In addition, it is necessary to focus on the strategic use of various evaluation results along with accumulating information favorable for ESG evaluation through organizational learning and software management. The implications of this study are that various studies such as the classification criteria for SMEs and the relationship between ESG evaluation grades and long-term survival rates are needed in ESG evaluation of SMEs. At the government policy level, it is time to consider the ESG evaluation system exclusively for SMEs so that ESG management can be implemented and ESG evaluation at different levels by industry and size.