Prof. Ormazabal is Associate Dean for Research and PhD Programs at IESE Business School and Professor in the Accounting and Control Department. He also serves as an editor of the Review of Accounting Studies, is a Research Affiliate at the CEPR, and a Research Member of the European Corporate Governance Institute. His research focuses on ESG, executive compensation, and corporate governance, and has been published in leading journals such as Journal of Accounting and Economics, Journal of Accounting Research, Journal of Finance, Journal of Financial Economics, Journal of Law and Economics, Review of Accounting Studies, and The Accounting Review. His work has been cited by regulators including the U.S. Securities and Exchange Commission and the European Securities and Markets Authority, and featured in outlets such as The Wall Street Journal, The New York Times, and The Economist. You can find more information about Prof. Ormazabal and his research here: Gaizka Ormazabal – IESE Profile

Title of the paper: Do consumers (have to) pay for ESG? 

Abstract: This paper examines the pricing of ESG (i.e., environmental, social, and governance) in product markets. Price effects may be demand-driven reflecting consumers’ willingness to pay for ESG outcomes or supply-driven, as firms pass ESG-related costs onto consumers. For identification, we focus on ESG-related incidents in the airline industry, which offers comprehensive public data on consumer prices. We find that airlines increase ticket prices following ESG incidents, with price effects being more pronounced when consumers are less elastic, airlines are more elastic, or the demand-side effect is weaker. Collectively, our results suggest that consumers at least in part bear the cost of ESG initiatives, and that ESG-related price increases cannot be fully attributed to consumer demand for improved environmental or social outcomes.

Please contact Mariya Ivanova (mariya.ivanova@nhh.no) for a copy of the paper. Looking forward to seeing many of you at the seminar!