Download This PaperResponsible Institutional Investing Around the World
Swiss Finance Institute Research Paper No. 20-13
European Corporate Governance Institute – Finance Working Paper 712/2020
78 Pages Posted: 23 Feb 2020 Last revised: 25 Nov 2020
Date Written: November 11, 2020
Abstract
We explore a novel survey on responsible investing by institutional investors around the world and match it to archival data on their equity portfolio holdings. We document that institutions that publicly commit to responsible investing exhibit better environmental, social, and governance (ESG) portfolio-level scores ("footprints") but this is not the case for US-domiciled institutions. In fact, US investors that committed but only partially implement ESG strategies (e.g., screening, integration, engagement) exhibit worse ESG footprints than uncommitted investors, consistent with some "greenwashing." Finally, we document that responsible investing does not enhance portfolio returns but reduces risk.
Keywords: ESG, SRI, PRI, socially responsible investing, sustainability, institutional investors, greenwashing
JEL Classification: G15, G23, G30, M14
Suggested Citation: Suggested Citation
Simon Glossner
University of Virginia - Darden School of Business ( email )
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
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