Researcher ORCID Identifier


Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Nishant Dass

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With its roots dating back to 1960, ESG Investing has expanded into one of the fastest growing segments of finance, permeating capital markets not only driven by shareholders’ investment decisions through socially responsible investing, shareholder activism and impact investing but also through conscious management. While measures of ESG are yet to become universal, the purpose of this added dynamic remains singular: to create value for stakeholders. The impact of ESG on capital markets is far from fully realized as the industry matures, but a greater degree of understanding around the material influence ESG bears in the equity markets sphere now exists thanks to ratings providers and their efforts to standardize a highly nuanced dynamic. In a study on 99 firms in the energy and utilities industry with IPOs in the period 2000-2021, I explore, using textual analysis tools, the impact of ESG disclosure in IPO prospectuses on subsequent IPO underpricing. Using three indicators of ESG disclosure in my OLS regressions, namely unweighted term frequency, weighted term frequency, and sentiment analysis, I find that quality of ESG disclosure in IPO prospectuses, as measured by weighted term frequency, has a significant inverse relationship with IPO underpricing. Unweighted term frequency and overall sentiment scores of ESG terms do not explain the IPO underpricing outcome variable.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.