Does Sustainable Investing Deprive Unsustainable Firms from Fresh Capital?

23 Pages Posted: 23 Dec 2020

See all articles by David Blitz

David Blitz

Robeco Quantitative Investments

Laurens Swinkels

Erasmus University Rotterdam (EUR); Robeco Quantitative Investments

Jan Anton van Zanten

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Robeco Asset Management

Date Written: December 8, 2020


This paper examines the sustainability characteristics of listed firms that raise fresh capital by issuing stocks or bonds. Issuance, i.e. the primary market, should be of paramount importance to sustainable investors since this is where the demand for and supply of capital meet, contrary to the secondary market where ownership of existing stocks and bonds is merely exchanged between investors. We find no evidence that fresh capital is flowing more towards sustainable than to unsustainable firms. The sustainability profile of equity issuers is generally similar to the broad market, while debt issuers even tend to have a below-average sustainability profile. Thus, unsustainable firms appear to have no problems in obtaining funding in public markets. Our results suggest that the current level of sustainable investing does not deprive unsustainable firms from fresh capital, although it cannot be disproved that sustainable investing may have prevented such firms from raising even more capital. It remains an open question whether a more widespread adoption of sustainable investing would have a more noticeable impact on capital flows.

Keywords: Sustainable investing, Socially Responsible Investing (SRI), Environmental Social and Governance (ESG), Sustainable Development Goals (SDGs), Exclusion, Divestment; Issuance; Capital flows

JEL Classification: G11, G12, G14

Suggested Citation

Blitz, David and Swinkels, Laurens and van Zanten, Jan Anton, Does Sustainable Investing Deprive Unsustainable Firms from Fresh Capital? (December 8, 2020). Available at SSRN: or

David Blitz

Robeco Quantitative Investments ( email )

Weena 850
Rotterdam, 3014 DA

Laurens Swinkels (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA

Robeco Quantitative Investments ( email )

Rotterdam, 3000
+31 10 224 2470 (Phone)
+31 10 224 2110 (Fax)

Jan Anton Van Zanten

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR

Robeco Asset Management ( email )

Rotterdam, 3011 AG

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

Paper statistics

Abstract Views
PlumX Metrics