All you need is G(overnance): Sustainable Finance Following Ambrogio Lorenzetti’s Frescoes


  • Costanza Consolandi Universuty of Siena
  • Giovanni Ferri LUMSA University
  • Andrea Roncella 3Catholic University of the Sacred Hearth



Sustainable finance, ESG, Corporate governance, Equity volatility, Equity risk, Ambrogio Lorenzetti


This paper takes at firm level the inspiration of the Allegory of the Good and Bad Government, the 14th century series of frescoes by Ambrogio Lorenzetti. Namely, we investigate whether a good corporate governance stabilizes financial performance and whether such superior governance improves ‘ESG (Environmental, Social, Governance) resilience’ against controversies related to sustainability issues. Using a large sample of European listed firms from 2006 to 2019, we find that a good governance is the key factor not only in getting ESG controversies managed, therefore increasing firm sustainability resilience, but also in reducing equity volatility, therefore stabilizing firm financial performance.


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Research paper