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(Jan. 12) Commitment to change or greenwashing? How signing the Principles for Responsible Investment affects flow to mutual funds

Last updated :2017-01-12

Topic: Commitment to change or greenwashing? How signing the Principles for Responsible Investment affects flow to mutual funds
Speaker: Dr. Yong Li
(Associate Lecturer of Finance, University of Queensland)
Time: 16:00-17:30, Thursday, January 12, 2017
Venue: Wong Bing Lai Conference Room, Lingnan Hall, Guangzhou South Campus, SYSU
Language: English

Abstract:
Financial market participants have devoted substantial resources to environmental, social, and governance (ESG) considerations, including signing up to initiatives which promote ESG. The largest such initiative is the United Nations-supported Principles for Responsible Investment. By examining flow to signatory funds, we investigate whether market participants view signing this initiative as a signal of commitment to ESG, or ignore it as marketing greenwash. We find flow to retail funds increases, but institutional flow does not, suggesting more informed investors disqualify signing as greenwash. We also investigate whether signatories’ ESG scores improve after signing the initiative, and find limited evidence of this.