SPUR Recap: The Impact of Negative Events on Company's Sustainability Ratings

Maggie Sun Headshot
During the spring of 2020, Maggie Sun (BS '22) completed a SPUR project with the Center for Sustainable Business. Read on to learn more about her experience:

Name: Maggie Sun
Year: 2022
Concentration: Econometrics & Quantitative Economics and Sustainable Busines

Tell us briefly about yourself (name, degree program, focus of study, grad year).
My interest in sustainable business started Freshman spring when I was taking the Business and Society class. I went abroad to NYU London during my Sophomore fall and participated in the NYU academic internship program. Through the program, I was fortunate enough to intern with a non-profit organization focused on environmental measuring and scoring. Given the positive internship experience and the overall increasing level of awareness on sustainability, I decided to co-concentrate in sustainable business and explore it as a valid career path in the future. As I returned to New York in the spring, I realized that I should take up the opportunity to engage with the Center for Sustainable Business, and the SPUR project was a great way of doing that.

Briefly describe the project you worked on with CSB (both the topics of focus and the deliverable you produced).
The project I worked on with CSB is called “The Impact of Negative Events on Company Sustainability Ratings”. We studied numerous ESG ratings and their components, and I was tasked with the environmental part of the research. The first part of the research included a literature review. We investigated negative events involving specific companies as well as their media coverage on Nexis Uni. Then, we identified key milestones in the progression of those events and compiled the information in a database. The second part of the research was about data analysis. We used the daily ESG ratings of those companies responsible for the scandals and attempted to identify changes in the ratings that coincide with the timing of the milestone. In the end, we tried to assess whether the “bad press” had a direct impact on the companies’ sustainability ratings. For the deliverables, we produced a midterm presentation as well as a final presentation summarizing our findings and takeaways from the research. We also created a repository of negative events that were used in the study and a short conclusion of our research.

In your own words, why do you think this research is important?
I believe that this research is important for me because it is a great way to gain valuable experience as well as exposure to my topic of interest. It also helps me sharpen my research skills which will be useful for both graduate school and entry-level jobs with research as a major component. More importantly, this research is critical for society because it motivates companies to make substantial changes in their corporate behaviors. Not only does it give the organizations that produce the ESG ratings a chance to review their scoring methodologies, but it also helps establish the direct link between scandals and ESG ratings, which then affect other stakeholders like investors and consumers in their decision-making. As stakeholders look towards ESG ratings to be more informed about the companies, this research will drive the companies to be more conscious about long-term impacts in their business practices and invest more in their initiatives in the ESG areas.

How did this project prepare you for future classes/projects at Stern? For your future career path?
This project has prepared me for future projects at Stern since I have rarely worked individually on a project and produced my deliverables before. It gave me the freedom of a more flexible schedule, but it also made me realize the importance of planning and pacing myself because I would not have my teammates to keep me in check. In addition, I gained real-life experience in analyzing data. I had to demonstrate the significance of changes in the ratings and find ways to prove that they are not simply fluctuations; the process requires more creativity than the exercises I did in my quantitative classes. I became more familiar with the ESG ratings, their methodologies as well as the areas of focus in sustainability overall, which helped me become more prepared for future classes in the sustainable business concentration.

In terms of my future career path, I believe this project has been incredibly helpful. I have met interviewers who believe that I was a great fit for a job because of my relevant experiences in sustainability. Research opportunities similar to this one do not come often for undergraduate students, but Stern and CSB have certainly made them more accessible through the SPUR project. Because I have had such a fruitful experience working with CSB, I have no doubt that I will be involved with its projects moving forward.