Do Responsible Investors Invest Responsibly?

69 Pages Posted: 23 Feb 2020 Last revised: 9 Feb 2022

See all articles by Rajna Gibson

Rajna Gibson

University of Geneva - Geneva Finance Research Institute (GFRI); European Corporate Governance Institute (ECGI)

Simon Glossner

University of Virginia - Darden School of Business

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute; European Corporate Governance Institute (ECGI); University of Geneva - Geneva School of Economics and Management

Pedro Matos

University of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI)

Tom Steffen

Osmosis Investment Management

Date Written: May 25, 2021

Abstract

We study if institutional investors that join the Principles for Responsible Investment (PRI), the largest responsible investment initiative, exhibit better portfolio-level environmental, social and governance (ESG) scores. Signatory institutions have better ESG scores but this holds only outside of the United States. In contrast, US-domiciled PRI signatories exhibit at best similar, if not worse ESG scores, particularly those signatories that have underperformed recently, are retail-client facing and that have joined the initiative recently. We also find that clients’ flows do not discriminate US PRI signatories according to their level of ESG incorporation.

Keywords: ESG, SRI, PRI, socially responsible investing, sustainability, institutional investors, greenwashing

JEL Classification: G15, G23, G30, M14

Suggested Citation

Gibson, Rajna and Glossner, Simon and Krueger, Philipp and Matos, Pedro and Steffen, Tom, Do Responsible Investors Invest Responsibly? (May 25, 2021). Swiss Finance Institute Research Paper No. 20-13, European Corporate Governance Institute – Finance Working Paper 712/2020, Available at SSRN: https://ssrn.com/abstract=3525530 or http://dx.doi.org/10.2139/ssrn.3525530

Rajna Gibson

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211
Switzerland
+41.22.379.89.83 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Simon Glossner

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211
Switzerland

Swiss Finance Institute ( email )

Switzerland

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

University of Geneva - Geneva School of Economics and Management ( email )

Uni Mail
Bd du Pont-d'Arve 40
Geneva, 1211
Switzerland

Pedro Matos (Contact Author)

University of Virginia - Darden School of Business ( email )

University of Virginia
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434 243 8998 (Phone)
434 924 0726 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty-research/directory/pedro-matos/

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Tom Steffen

Osmosis Investment Management ( email )

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3,213
Abstract Views
18,658
rank
5,177
PlumX Metrics