Doug Schuler


SURF Mentoring

Potential projects/topics:

Title: Testing the Relationship between firm-level ESG behaviors and performance

For centuries, humankind has been fascinated with the pursuit of a good life. Aristotle's teachings on virtuous living and its connection to happiness and well-being continue to be relevant today, especially in the business world. Business scholars have explored the correlation between ethical treatment of stakeholders – including employees, customers, communities, and the environment – and business success, as indicated by metrics such as market share, profits, and valuation. The rise of theories like the triple bottom line, Environmental, Social, and Governance (ESG) investing, Corporate Social Responsibility (CSR), shared value, and integrated non-market strategy highlights the belief that companies prioritizing social responsibility can achieve both positive outcomes for society and success in business, creating a mutually beneficial scenario.

Despite this logic and numerous theoretical models, there has been a dearth of empirical evidence linking the strategic choice of what firms say in response to corporate social crises. Firms have countless ways to respond to negative incidents in the absence of standardized disclosures. Competing incentives may result in competing disclosure choices. In the wake of a negative incident, firms may choose to provide forward-looking information to explain how they are improving. Alternatively, firms may provide unrelated positive disclosures to distract from the incident. In the ESG space, one potential reason for these different responses is that ESG ratings agencies may be more likely to respond to observable disclosures than to unobservable activities.

This proposal aims to advance the current literature on corporate sustainability by analyzing the content of annual voluntary disclosures made by firms through their ESG reports. To carry out this study, we have manually collected a database of these reports and will use NLP techniques to identify key features related to the materiality of the firms and their sectors. The first objective of the project is to explore the relationship between disclosure practices and ESG performance. We will define ESG performance using various proxies and examine both the quantity and tone of the disclosures. This analysis will consider both firm-specific incidents (e.g., an oil spill by Exxon vs. Chevron) and industry-wide incidents (e.g., all Oil & Gas firms' response to an Exxon spill). We expect to find a positive correlation between the related disclosure and better ESG performance. Broadly, we plan on covering two dimensions of ESG - environmental incidents and performance, and employee incidents and performance related to diversity and safety. The outcome of this project is a research paper that can be presented at relevant conferences and potentially published in a scholarly journal.

Required qualifications:

Course Requirements We do not have any required courses or majors to apply for this project.

We prefer a student in (i) economics (with an interest in applied microeconomics), (ii) strategic management, and (iii) data science (those with interest in computer vision and/or NLP).

Skills Requirements:

Strong analytical and critical thinking abilities to synthesize and interpret data. Excellent written and verbal communication skills to effectively communicate findings and results. Detail-oriented and organized approach to research and data management to ensure accuracy and efficiency. Experience in using Python or R is a plus. Potential interest in conducting research.

Direct mentor: Faculty/P.I., (We will have two faculty members: Dr. Kunal Sachdeva and Dr. Doug Schuler - both of the business school.

Potential projects/topics:

Black Soldier Fly

We are interested in developing a research-oriented case study about the evolution of a nascent industry. The industry involves an insect, the black soldier fly (BSF), that has applications in several existing industries such as animal and aquaculture feeds, cosmetics, and even human consumption. Most BSF companies are small – several are spin-offs of university technologies – and rely upon a mix of private funding and public policies and funding to stay afloat.

We intend to position this research around non-market strategy (NMS). NMS involves the integration of political strategies, such as companies lobbying for public policies that might benefit their sector, with conventional commercial strategies, such as expansion into a new market. NMS states that companies that integrate their political and commercial strategies well can outperform companies that neglect political (and social) activities. For BSF, they must compete against large companies in established sectors such as soy-based feeds and even other insect-based feeds (such as millworms).

We have access to a lab at Texas A&M University (TAMU) with one of the top researchers in the world on BSF. Additionally, they formed a spin-off company that breeds and markets (mostly for poultry and chicken feed) the BSF. They are very interested in growing their business and in understanding the political and social issues that might drive such growth.

Our project would be a research paper and/or a research-oriented case about the BSF industry.

Potential skills gained: The fellow would be intimately involved in the project. We have worked with the TAMU team for some time, but have never dug into the project. Thus, the fellow would be able to ideate, hone in on the best approach, do literature search, participate in meetings, and visit the field site (at least at TAMU). We have two PIs (Drs. Koka and Schuler) so the fellow would be interacting with both. We also will give a lot of independence to the student so they will learn planning and time management and reporting back to us.

Required qualifications: Not required.

Desired courses might be strategic management, a political science course on interest group politics, economics (micro), and sociology (about organizations and society). Someone with some biology, zoology, entomology, ecology skills also is desirable.

Skills: Data gathering, including some data scraping might be done. Software skills to do such work.

Direct mentor: Faculty/P.I., (We will have two faculty members: Dr. Balaji Koka and Dr. Doug Schuler - both of the business school.

Research Areas

Douglas Schuler is professor of business and public policy. His main research interests are corporate political activity, public policy, corporate social responsibility and non-profit organizations. He also does research about organizational collaborations about food insecurity in and around Houston. Schuler has published many research articles in top-tier academic outlets, including the Academy of Management Journal, Academy of Management Review, Business and Politics, Business Ethics Quarterly, Business & Society, California Management Review, Journal of Management, PLoS-ONE, and Strategic Management Journal. A member of the Rice Business faculty since 1992, he has taught many courses, most recently Business-Government Relations, Globalization of Business, and Social Entrepreneurship. Schuler has received several teaching and service awards at Rice, including the 1997 JGS Award for Teaching Excellence, 1997 Rice Graduate Students Association Teaching Award, the 2006 Rice Graduate Students Association Faculty/Staff Service Award, and the 2018 Teaching Award for Inquiry-Based Learning.