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Manchester Grand Hyatt, Seaport C
American Finance Association
Corporate Culture and Socially Responsible Investing
Sunday, Jan. 5, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: Christopher Parsons, University of Washington
Responsible Institutional Investing Around the World
AbstractWe explore a novel survey on responsible investing by institutional investors around the world and match it to archival data on equity portfolio holdings. We document that institutions that commit to responsible investing exhibit different environmental, social and governance (ESG) portfolio-level scores but this is not the case for US-domiciled institutions. We also examine if different ESG implementation strategies (e.g., screening, integration, engagement) affect portfolio-level ESG scores but find limited evidence. Finally, we find that responsible investing does not enhance portfolio returns but acts more as a risk mitigation tool.
Real Effects of Climate Policy: Financial Constraints and Spillovers
AbstractWe document that localized policies aimed at mitigating climate risk can have unintended consequences due to regulatory arbitrage by firms. Using a difference-in-differences framework to study the impact of the California cap-and-trade program with US plant level data, we show that financially constrained firms shift emissions and plant ownership from California to other states. In contrast, unconstrained firms do not make such adjustments. Overall, neither constrained nor unconstrained firms reduce their total emissions when only a subset of their plants are affected by the cap-and-trade rule, undermining the effectiveness of the policy.
University of Chicago
University of California-San Diego
- G3 - Corporate Finance and Governance