Climate investments in the real estate and building sector - the impact of social networks

Purpose and goal:

The purpose of this project is to investigate how climate investments are disseminated within corporate networks. We specifically focus on companies in the construction and real estate sector, as companies in this sector exhibit high carbon emissions. Furthermore, we examine whether the proportion of women in corporate leadership and boards influences corporate climate efforts.

The results are summarized in a working paper and have been presented during a seminar with our project partner and stakeholders from the business community. Expected results and effects:

Our results indicate that the social contacts of board members are significant in improving the ´E´ in ESG (Environmental, Social, and Governance) and in reducing carbon emissions. Regarding board members in the construction sector, we find that they do not leverage their social networks to reduce emissions. The effects of social networks in the real estate sector are consistent with those in the overall sample.

Furthermore, we find that a higher number of women on the board is correlated with lower carbon emissions. Approach and implementation:

Using data from the Boardex database, we identify companies that share board members and, thus, are assumed to have a relationship. We also locate the companies within the overall network structure by calculating various centrality measures. From the Asset4 database, we retrieve information about companies´ environmental performance (the "E" in ESG and carbon dioxide emissions).

Company-specific data is sourced from Refinitiv Eikon. The dataset comprises 2,400 companies, 44,464 board members in 52 countries, spanning the period from 2003 to 2020.