Regulating ESG Disclosure

58 Pages Posted: 25 May 2023 Last revised: 29 May 2024

See all articles by Marina Emiris

Marina Emiris

National Bank of Belgium - Research Department

Joanna Harris

University of Chicago

Francois Koulischer

University of Luxembourg

Date Written: May 27, 2024


We use new data on the ownership of mutual funds in Europe to estimate how investors respond to regulations on the disclosure of Environmental, Social and Governance (ESG) performance. We find that the introduction of ESG disclosure rules for mutual funds led to strong flows into funds categorized as green. We show that investor rebalancing takes place through two channels: an uncertainty channel where investors value the lower uncertainty, and a greenness channel where funds respond to disclosure rules by increasing their greenness to attract flows. We find empirical support for both channels: green funds for which investors had little information before the regulation experience the strongest flows, and green funds that had a low ESG rating before the regulation decrease their emissions most under the new rules.

Keywords: Mutual funds; Disclosure Regulation; Environmental preferences; ESG ratings

JEL Classification: G11; G15; G23; Q56

Suggested Citation

Emiris, Marina and Harris, Joanna and Koulischer, Francois, Regulating ESG Disclosure (May 27, 2024). Available at SSRN: or

Marina Emiris

National Bank of Belgium - Research Department ( email )

Research Department
Boulevard de Berlaimont 14
B-1000 Brussels, 1000

Joanna Harris

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Francois Koulischer (Contact Author)

University of Luxembourg ( email )

Kirchberg, 6, rue Richard Coudenhove-Kalergi

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