Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    The ESG-Innovation Disconnect: Evidence from Green Patenting
    05 Jan 2021Working Paper Summaries

    The ESG-Innovation Disconnect: Evidence from Green Patenting

    by Lauren Cohen, Umit G. Gurun, and Quoc H. Nguyen
    Energy-producing firms are more likely to produce “blockbuster” green patents than other firms. Yet energy firms are excluded from many environmental, social, and governance (ESG) funds, and are the targets of divestiture campaigns whose stated aims often include green energy innovation.
    LinkedIn
    Email

    Author Abstract

    No firm or sector of the global economy is untouched by innovation. In equilibrium, innovators will flock to (and innovation will occur where) the returns to innovative capital are the highest. In this paper, we document a strong empirical pattern in green patent production. Specifically, we find that oil, gas, and energy producing firms—firms with lower Environmental, Social, and Governance (ESG) scores, and who are often explicitly excluded from ESG funds’ investment universe—are key innovators in the United States’ green patent landscape. These energy producers produce more, and significantly higher quality, green innovation. Our findings raise important questions as to whether the current exclusions of many ESG-focused policies—along with the increasing incidence of explicit divestiture campaigns—are optimal, or whether reward-based incentives would lead to more efficient innovative outcomes.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: October 2020
    • HBS Working Paper Number: NBER Working Paper Series, No. 27990
    • Faculty Unit(s): Finance
      Trending
        • 13 Aug 2021
        • Research & Ideas

        Managers, Here’s How to Bond with New Hires Remotely

        • 18 May 2022
        • Research & Ideas

        Are Banks the ‘Bad Guys’? Overdraft Fees Are Crushing Low-Income Customers

        • 09 Dec 2019
        • Research & Ideas

        Identify Great Customers from Their First Purchase

        • 13 May 2022
        • Research & Ideas

        Company Reviews on Glassdoor: Petty Complaints or Signs of Potential Misconduct?

        • 25 Feb 2019
        • Research & Ideas

        How Gender Stereotypes Kill a Woman’s Self-Confidence

    Lauren H. Cohen
    Lauren H. Cohen
    L.E. Simmons Professor of Business Administration
    Contact
    Send an email
    → More Articles
    Find Related Articles
    • Environmental Sustainability
    • Energy

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College