Georgia State University

Companies that proactively manage climate risks boost their valuations, while those with a passive stance are discounted in the equity market, according to new research. A pioneering study from the University of Florida has quantified corporations' exposure to climate change risks like hurricanes, wildfires, and climate-related regulations and the extent to which climate risks are priced into their market valuations. The research also exposes a costly divide -- companies that proactively manage climate risks fare much better than those that ignore the threats. Using textual analysis of earnings call transcripts from almost 5,000 U.S. public companies, researchers developed novel measures of firms' physical climate risk exposure from weather extremes as well as the 'transition risks' that firms face from the global shift to a low-carbon economy, like shifting to renewable energy and reduced carbon emissions. They found companies facing high transition risks from things like emissions regulations tended to be valued at a discount by investors. "In recent years, overall investor attention to climate change has increased," explained Qing Li, Clinical Assistant Professor at the University of Florida Warrington College of Business. "As our research shows, companies that have high exposure to transition risk seem to be punished by markets." However, the valuation discount didn't apply to companies actively working to adapt their business models and reduce climate impacts through strategies like increasing sustainable investments and green technologies. These 'proactive' firms tend to ramp up sustainable innovations and avoid cuts to research spending as transition risks intensify. In contrast, companies that discuss transition risks but take a passive stance tend to slash R&D budgets and jobs when facing higher climate exposure -- a potential impediment to their long-term competitiveness. "The divide in strategies and outcomes between proactive and nonproactive firms is quite stark," noted researcher Yuehua Tang, Emerson-Merrill Lynch Associate Professor. "Companies being transparent about their climate vulnerabilities but also demonstrating tangible responses to mitigate those risks seem to be rewarded by markets." The findings come amid increasing pressure from investors, regulators and activists for companies to publicly disclose climate risks. In 2024, the SEC implemented new rules that require public corporations to report risks from climate change impacts and in some cases their greenhouse gas emissions. While there are costs for businesses that adapt to both physical and transitional climate risks, the study by Li, Tang, China Europe International Business School's Hongyu Shan (Ph.D. '19) and Georgia State University's Vincent Yao suggests proactive efforts could actually boost valuations and preparedness as investors increasingly consider climate threats when making informed investment decisions. "Corporate Climate Risk: Measurements and Responses" is published in The Review of Financial Studies. The research team also shares their climate risk measures at:

A panel of healthcare and business policy researchers participates in a Q&A during the FTC's virtual workshop of private equity in healthcare. They echoed the testimonies of clinicians who described worsened care standards among healthcare organizations acquired by private equity firms. Federal regulators are weighing new safeguards against exploitative dealmaking by private equity firms within healthcare—and, so far, they aren't signaling any reprieve for the corporate investors experts say are behind withering care standards and preventable bankruptcies. Back in December, the Biden administration announced a sweeping, multiagency effort to clamp down on what it described as “corporate greed in healthcare.” That push was preceded by legal challenges against PE-backed physician roll-up schemes and ownership transparency requirements for several types of providers, and in recent months involves new data sharing between agencies as well as specific leadership roles focused on healthcare competition. The government went a step further on Tuesday as the Federal Trade Commission (FTC), the Department of Justice’s (DOJ's) Antitrust Division, and the U.S. Department of Health and Human Services (HHS) together issued a new request for information surrounding healthcare dealmaking. Specifically, the government said it wants to hear from the public on PE, health system, private payer or other healthcare-related asset manager deals that “may increase consolidation and generate profits for firms while threatening patients’ health, workers’ safety, quality of care, and affordable health care for patients and taxpayers.” They’re also seeking feedback on healthcare deals that potentially would not be noticed by regulators under the current premerger notification framework along with firsthand accounts from patients and workers who saw changes in their facilities following a merger or acquisition. The inquiry follows a multidecade uptick in PE involvement within the healthcare industry. A study published this week in Health Affairs, for instance, found that the number of PE-owned physician practice sites rose from 816 in 2012 to 5,779 in 2021 and that single PE firms had gained “significant” market share in dozens of metropolitan statistical areas thanks to their acquisitions. Regulators lay out enforcement priorities   The information gathering kicked off later that afternoon with a virtual public workshop on private equity in healthcare hosted by the FTC. It featured comments from FTC commissioners and DOJ and Centers for Medicare & Medicaid Services heads in addition to testimonies and Q&As from academic researchers, clinicians and other stakeholders. Both the policymakers and the public, near unanimously, painted PE as an exploitative and damaging force on care. In opening comments, FTC Chair Lina Khan said that PE healthcare acquisitions “has been top of mind” for the regulator and that it has heard “an outpouring of concern” within the last two years alone. Though she acknowledged that PE “can sometimes be an important source of capital” for small or midsized companies, and that “some” PE firms will take a long-term view of generating value, she pointed to a general trend in which increased financialization and pursuit of profits supplant clinicians’ medical judgement. Khan also drew attention to specific PE tactics—debt-financed strip-and-flip deals, market roll-ups via serial smaller acquisitions, and reducing competitive incentives among rivals through minority stake purchases or interlocking directorates—that she said regulators already have the tools to address. “Firms of all types should be on the notice that we’re on the lookout for these strategies and will continue to deploy the full scope of our authority to protect the American public from anti-competitive and unlawful tactics,” she said. Assistant Attorney General Jonathan Kanter, of the DOJ’s Antitrust Division, followed Khan by highlighting specific enforcement wins, including the resignation of 15 interlocking directors from 11 different corporate boards, and promised that “more than anything, we will stay laser-focused on the intermediaries that sit between you and your doctor.” Other officials from HHS outlined cases of healthcare fraud and warned that unchecked consolidation has increased Medicare costs and drives thousands of monthly complaints from beneficiaries. “For example … private Medicare managed care plans receive over $400 billion per year and cover over 50% of the Medicare population—and its growth has attracted more private investment,” Christi Grimm, HHS inspector general, said during the workshop. “It’s important that this investment supports well-run managed care plans that both comply with Medicare rules and ensure enrollees have access to cost effective, high-quality services for enrollees. … When investors’ conduct jeopardizes patient safety or crosses the line into fraud, [the Office of Inspector General] and our law enforcement partners are exploring the best ways to hold them accountable.” "The worst experience of my professional life"   More explicit criticisms of corporate ownership came during firsthand accounts on the “human impact” of PE in healthcare. In one testimony, a registered nurse and supervisor from a rural community hospital—who opted to testify anonymously “due to concerns about potential workplace retaliation”—said it was “evident” that their hospital had become “chronically understaffed” and unsafe since being acquired by a PE firm over a decade prior. They detailed an incident where a psychiatric patient being held in the ER escaped his bed and entered an adjacent room where he used his thumbs to “gouge out” the eye of another elderly patient, who later died of her wounds. The nurse said that there was no security guard on staff and that panic buttons hidden at nurses' desks “historically” haven’t led to responses within 15 minutes. “After that incident, ER nurses were given de-escalation training with the assumption that the handyman maintenance staff will act as security. Hiring a full-time security guard is simply too expensive,” they said before describing other incidents of sexual harassment and preventable patient deaths. Jonathan Jones, M.D., president of the American Academy for Emergency Medicine, said that he has worked in multiple hospitals and employment models over his career, “and I can definitively say that working under a PE-backed managed group has been the worst experience of my professional life. More importantly, it’s also been the worst possible experience for my patients.” He detailed a large community hospital he worked in where ED staffing had recently switched to a PE-controlled group, which led to staffing reductions “outside what is considered safe by any of the emergency medical specialty societies.” Physicians who said that changes were unsafe were told they “could stop complaining or we would be terminated,” he said. Jones eventually decided to leave, but, “given that the same PE that group staffed four other emergency departments in the city, and had a commanding share of the market in general, I had to leave my city as well.” In reaction to these and other provider testimonies, FTC Commissioner Alvaro Bedoya said it was clear PE was interfering with the goals of clinicians and healthcare. “I fear that PE threatens to turn the Hippocratic Oath on its head,” Bedoya said. “So many of the warnings and allegations that we’re hearing today … stem from situations where PE is taking control away from doctors and medical professionals.” "Heads, I win, tails, you lose"   Between breakdowns of the extensive body of academic data linking PE to worsened outcomes, healthcare and business policy researchers floated their ideas on how the administration should rein in exploitative investors. They noted that several practices outlined during the course of the day aren’t exclusive to PE. Rather, PE often moves more quickly than other types of for-profit businesses to exploit legal “loopholes” for the benefit of their investors, said Erin Fuse Brown, a law professor at Georgia State University. “When we think about crafting these policy responses … the polices themselves should be somewhat agnostic as to the type of owner,” she told regulators. “If it’s the same risk, it should apply equally no matter who is pulling the lever.” On the other hand, Brendan Ballou, an attorney, DOJ special counsel and author, said there are cases in which PE equity acquisitions are “qualitatively different” than those of traditional healthcare players. He said that it is “very hard” to hold PE firms conducting a roll-up strategy responsible for the portfolio companies it acquired. He also noted that PE firms' profit incentives aren’t always aligned with the goals of a healthcare company, and highlighted scenarios (akin to the now-scrutinized Steward Health Care) in which a transaction fee paid directly to a PE firm can justify a hospital’s decision to sell off its real estate and become saddled with regular rent payments to the new owner. “What that means is private equity firms often have a ‘heads, I win, tails, you lose’ sort of business model, where it makes sense, actually, for them to lever the company up and cut staffing in the hope of ambitious growth or increased profitability,” he said. “If things go well, that's great. But if things go poorly, often nothing bad will come [to the PE firm].” The expert panel said they were generally encouraged by regulators’ recent actions to address PE exploitation, including adjustments to premerger notification requirements that empower the FTC block “platform” companies from acquiring rivals should that lead to reduced competition. As for potential policy solutions, Brown described HHS’ moves to increase ownership transparency as “a fundamental starting point” that will act as the “bedrock principle” for future interventions. From there, she encouraged collective antitrust enforcement and competition policy across the agencies; fraud and abuse enforcement; new policies “to protect the clinical autonomy of the workforce,” such as physician noncompetes; and the closing of specific payment loopholes being “exploited by private equity to increase revenues.”

Influenza A viruses with induced resistance to a new candidate antiviral drug were found to be impaired in cell culture and weakened in animals, according to a new study. Influenza A viruses with induced resistance to a new candidate antiviral drug were found to be impaired in cell culture and weakened in animals, according to a study by researchers in the Center for Translational Antiviral Research at Georgia State University. In a study published in PLoS Pathogens, the authors explored the developmental potential of 4'-fluorouridine (4'-FlU), a clinical drug candidate, for influenza therapy. They resistance profiled the compound against influenza viruses and mapped possible routes of viral escape, addressing specifically whether resistance affects viral pathogenicity and ability to transmit. In previous studies, 4'-FlU demonstrated broad oral efficacy against seasonal, pandemic and highly pathogenic avian influenza viruses in cell culture, human airway epithelium cells and two animal models, ferrets and mice. Seasonal influenza viruses pose a major public health threat, infecting nearly 1 billion people worldwide each year and causing millions to require hospitalization and advanced care. Annual flu vaccines provide moderate protection, but the benefit is marginal when vaccines are poorly matched with circulating virus strains or when novel, pandemic virus strains emerge. While three different classes of antivirals are approved by the U.S. Food and Drug Administration for use against influenza, they each have a low genetic barrier against viral resistance. One of these classes is no longer recommended by the Centers for Disease Control and Prevention due to widespread presence of resistance mutations in circulating human and animal influenza A virus strains. Resistance has also been frequently observed to the other two classes of antivirals in human viruses. "Developing novel therapeutics to mitigate seasonal influenza and improve preparedness against future influenza pandemics is an urgent priority because of pre-existing or rapidly emerging resistance of influenza viruses to approved antivirals," said Carolin Lieber, first author of the study and a postdoctoral fellow in the Center for Translational Antiviral Research in the Institute for Biomedical Sciences at Georgia State. "In this study, we tested the potential of 4'-FlU as an influenza drug and found that resistant influenza A virus variants are severely weakened in mice. In ferrets, these resistant variants are impaired in their ability to invade the lower respiratory tract and cause viral pneumonia, in addition to being transmission-defective or compromised," Lieber said. In cell culture, six different escape lineages with distinct mutations were found. The mutations adhered to three distinct structural clusters that are all predicted to affect the active site of the viral RNA-dependent RNA polymerase complex, leading to moderately reduced viral sensitivity to the drug, according to the study's findings. The study also found that oral 4'-FlU administered at the lowest efficacious dose (2 mg/kg) or elevated dose (10 mg/kg) overcame moderate resistance when mice were infected with a lethal amount of influenza virions. This was demonstrated by significantly reduced virus load and complete survival, the authors reported. "We discovered that we could fully mitigate lethal infection with the resistant variants and viral spread with standard or five-fold elevated oral dose of 4'-FlU," said Richard Plemper, senior author of the study, Regents' Professor in the Institute for Biomedical Sciences and director of the Center for Translational Antiviral Research at Georgia State. "These results demonstrate that partial CA09 escape from 4'-FlU is feasible in principle, but escape mutation clusters are unlikely to reach clinical significance or persist in circulation." Additional authors of the study include Hae-Ji Kang, Megha Aggarwal, Jeong-Joong Yoon and Robert M. Cox of the Center for Translational Antiviral Research in the Institute for Biomedical Sciences at Georgia State; Nicole A. Lieberman, Elizabeth B. Sobolik and Alexander L. Greninger of the University of Washington Medical Center; and Michael G. Natchus of the Emory Institute for Drug Development and Emory University School of Medicine. The study is funded by the National Institutes of Health's National Institute of Allergy and Infectious Diseases.