Do ESG funds make stakeholder-friendly investments?
London School of Economics and Political Science · Columbia University
Abstract
Abstract Investment funds that claim to focus on socially responsible stocks have proliferated in recent times. In this paper, we verify whether ESG mutual funds actually invest in firms that have stakeholder-friendly track records. Using a comprehensive sample of self-labelled ESG mutual funds (as identified by Morningstar) in the United States from 2010 to 2018, we find that these funds hold portfolio firms with worse track records for compliance with labor and environmental laws, relative to portfolio firms held by non-ESG funds managed by the same financial institutions in the same years. Relative to other funds offered by the same asset managers in the same years, ESG funds hold stocks that are more…
Citation impact
- FWCI
- 55.46
- Percentile
- 100%
- References
- 22
Authors
2Topics & keywords
- Business
- Portfolio
- Finance
- Global assets under management
- Asset (computer security)
- Socially responsible investing
- Active management
- Asset management