Analysing Volkswagen Diesel Scandal and E-S-G Spillover Effects with real-time AI
Analysis of the Volkswagen Diesel Scandal and the spillover effects on E-S-G performance with Knowsis ESG scores.
Since we classified such a scandal as a governance topic, we begin focusing on the governance score (fourth quadrant). There is a significant correlation (71%) between the stock price and the “G” score. More importantly, the “G” score severely drops (from 0.25 to around -0.8) 2 days ahead of the stock price. Similarly, the Social score (third quadrant) also dipped due to spillover effects before quickly recovering and stabilizing around -0.2. It is in fact hard to imagine that a corporate scandal doesn’t affect the social dimension of a company. Averaging the “S” and “G” scores, we obtain the ESG score (second quadrant) that collapses ahead of the market sell-off but then recovers more quickly than the stock price, signalling early the stabilization of the market perception of Volkswagen’s failure.
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