Are Green Funds for Real?

50 Pages Posted: 27 Jun 2023 Last revised: 3 May 2024

See all articles by Coralie Jaunin

Coralie Jaunin

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Swiss Finance Institute

Luciano Somoza

ESSEC Business School

Tammaro Terracciano

IESE Business School

Date Written: May 3, 2024

Abstract

We investigate green funds’ reactions to firms addressing the climate transition during earnings calls. We document that green funds invest significantly more in firms discussing the climate transition, even when controlling for the environmental score. Moreover, we show that, after addressing the topic for the first time, firms see their green fund ownership increase by twice as much as matched firms with similar characteristics. Crucially, such firms limit carbon emissions one year after discussing the climate transition. Overall, our results highlight an effective communication channel for firms to convey their climate stance to green investors.

Keywords: sustainable finance, mutual funds, earnings calls, climate disclosure, carbon emissions.

JEL Classification: G11, G23, D62, Q54.

Suggested Citation

Jaunin, Coralie and Somoza, Luciano and Terracciano, Tammaro, Are Green Funds for Real? (May 3, 2024). Swiss Finance Institute Research Paper No. 22-19, IESE Business School Working Paper No. 4492860, ESSEC Business School Research Paper No. 2023-03, Available at SSRN: https://ssrn.com/abstract=4492860 or http://dx.doi.org/10.2139/ssrn.4492860

Coralie Jaunin

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Luciano Somoza

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

Tammaro Terracciano (Contact Author)

IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

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