We present a model in which the agent reports a privately observed signal about the stochastic outcome of her action, while bearing a cost of misreporting her private information. If the agent receives a low payment contingent on her performance, it is very costly for the agent to misreport her...

We present a model of ESG integration where borrowers can deviate from ESG promises ex-post. Borrowers are incentivized to pursue ESG projects only when lenders can charge a high borrowing rate, which decreases the borrowers’ private benefit from pursuing financial returns. In the presence of...