Christopher Bruno

Christopher Bruno, Farhed Shah, Gary Robbins (2025), An Economic Model of Transboundary Water Agreements With Groundwater and Surface Water Interaction: Application to a US River Basin With a History of Conflict, Water Resources Research, 61 (7). 10.1029/2024WR037585

Abstract: This study examines the connection between groundwater and surface water in the design of transboundary compacts. A steady‐state hydro‐economic model is developed and applied to a river basin in the United States. Simulations demonstrate that when a water compact is designed to govern only surface water, the assigned allocations are nonbinding and lead to decreased river‐flow in the downstream region. When the compact is designed to govern surface water and groundwater usage combined, however, the assigned allocations are binding and changes in them can increase overall net benefits, with the extent dependent on flexibility in compact design.

Description: Key Points: • Allocation of transboundary water resources can cause conflict between regions, especially if mechanisms for allocation are not adequate • Economic analysis of transboundary water compacts often does not incorporate the connection between groundwater and surface water • We develop a hydro‐economic model that considers this connection and apply it to a case region in the US

Christopher Bruno and Witold Henisz (2024), Environmental, Social, and Governance (ESG) Outcomes and Municipal Credit Risk, Business & Society, 63 (8), pp. 1709-1756.

Abstract: We investigate the association between a wide range of community-level environmental, social, and governance (ESG) outcomes and the credit risk of U.S. municipal finance fixed-income securities. We develop a novel dataset of multiple ESG outcomes for U.S. counties and connect it to a 2001-2020 panel of municipal bonds issued within those counties. Overall, we find supportive evidence that collective increases in community-level ESG factors (i.e., ESG outcomes) are associated with reductions in credit risk for U.S. municipal finance instruments over time. We theorize that these associations arise from variations in investor perceptions and manifested changes in fiscal health over time as a function of changing ESG outcomes. Post hoc analyses leveraging quasi-exogenous shocks to uncertainty, as well as connecting ESG outcomes to various measures of fiscal health at the county-year level, and credit ratings at the bond-year level, help validate this theory. Our research suggests that even socially agnostic investors should investigate the environmental and social performance of a municipality as part of their credit due diligence.

Ulrich Atz, Tracy Van Holt, Zoe Liu, Christopher Bruno (2022), Does Sustainability Generate Better Financial Performance? Review, Meta-analysis, and Propositions, Journal of Sustainable Finance & Investment.

Abstract: Sustainability in business and ESG (environmental, social, and governance) in finance have exploded in popularity among researchers and practitioners. We surveyed 1,141 primary peer-reviewed papers and 27 meta-reviews (based on ∼1,400 underlying studies) published between 2015 and 2020. Aggregate conclusions from a sample suggest that the financial performance of ESG investing has on average been indistinguishable from conventional investing (with one in three studies indicating superior performance) – in contrast with research in the wider management literature as well as industry reports. Until recently top finance journals did not publish climate change related studies, yet these studies capture the frontier of corporate risk and ESG investment strategies. We developed three propositions: first, ESG integration as a strategy seems to perform better than screening or divestment; second, ESG investing provides asymmetric benefits, especially during a social or economic crisis; and third, decarbonization strategies can potentially capture a climate risk premium.