Polluters Provide Higher Returns than Non-Polluters
Atilgan, Demirtas, and Gunaydin found that there has been a pollution premium for US stocks and that the premium translated into superior investment performance.
The Halo Effect Drives Demand for Sustainable and Impact Investments
Both investment motives and investment experience are important determinants for investors’ ability to assess (impact) investment opportunities. While investor preference can justify accepting a lower return as the cost of expressing their values, the halo effect should not play a role in making that assessment—both economic theory and empirical evidence should lead investors to expect lower returns on sustainable investments.
Does Diversity add value to asset management?
The research literature on diversity in asset management, while promising, is limited with respect to the breadth of the evidence produced to date. We don't really understand the broad-based benefits of diversity nor how diversity delivers value in asset management. How does it really work? Is it the university, the college major, gender, race, the work experience? That is where this study comes into play. The authors propose a unifying concept called homophily to analyze the impact of diversity in asset management using hedge funds as their laboratory. Sociology describes homophily as groups of people that share common characteristics such as beliefs, values, education, and so on. In a team setting those characteristics make communication and relationship formation easier. Further, a large body of research in sociology specifically documents the presence of homophily with respect to education, occupation, gender, and race. Luckily, management teams within hedge funds can be characterized by just those dimensions.
What Changes after Women Enter Top Management Teams?
How do female appointments to top management teams (TMTs) affect a firm's approach to knowledge-related strategic renewal?
Do Polluters Earn Higher Expected Returns? Yes.
Hence, the major research question examined here is: What is the impact of industrial pollution on market pricing? Short answer: polluters have earned higher returns.
Is ESG Investing Counterproductive?
The article introduces a concept called "impact elasticity," which measures how a firm's environmental impact changes in response to shifts in its cost of capital (the "E" in "ESG"). It finds that the dominant sustainable investing strategy, which favors green firms and punishes brown firms by altering their cost of capital, can be counterproductive.
Value versus Values in ESG Investing
The relationship between financial markets and ESG investing is obscured by the lack of clarity regarding motivations for investing in ESG strategies. Is the motive to align the investor’s values with the ESG theme? Or is the ESG term a misnomer for a set of stocks that are systematically undervalued, for some reason as a function of its ESG characteristics?
ESG Preferences Negatively Affecting Market Efficiency
While ESG investors can express their values through their investments, they should expect lower returns from their portfolios—though they also will be taking less investment risk.
The Role of ESG in Equity Returns Across Private, Primary, and Secondary Markets
The continued popularity of sustainable strategies could create sufficient cash flows to offset the risk premium in the lower-scoring stocks, at least until an equilibrium is reached.
Social Media and Inequality in Venture Capital Funding
The article aims to examine the role of social media in venture capital financing, its impact on disparities faced by underrepresented groups, and the mechanisms through which social media usage can facilitate venture capital funding.
Female execs bring more accuracy to analysts’ earnings forecasts
The results of this research extend the literature in a number of areas including: the analyst forecast literature; the literature on behavioral accounting and finance with respect to corporate decision-making all in the context of gender; and the dominant role of the CEO on information transparency.
Are Sustainable Investors Compensated Adequately?
Academic research has demonstrated that the higher risk associated with less sustainable firms should be compensated by higher returns. It also has shown that more sustainable firms have less investment risk.
The Gender Gap Among Top Business Executives
The article aims to provide insights into the gender gaps in executive employment and compensation, explore the role of corporate culture and temporal flexibility in these gaps, and understand the factors influencing gender differences in entry, exit, and pay among top business executives.
Negative Screening and the Sin Premium
While most sin stocks in the IC method were also identified as sin in the TA method, there were 57 firm-year cases where a company showed up as sin only in the IC method—these were false positive sin stocks as identified in the IC method.
The Gender Gap in Housing Returns
Do men and women differ in their financial returns on housing investments? What are the main drivers?
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Eric Balchunas, Cliff Asness, Kai Wu, Que Nguyen, Corey Hoffstein
How Pervasive is Corporate Fraud?
In this article, we examine the research on the pervasiveness of corporate fraud (misconduct or alleged fraud), which is one of the (less emphasized) costs of public ownership.
Do Gender Pay-Gap Disclosures Make a Difference?
The verdict is still out on the impact of legislation regarding firm disclosure rules on the gender pay gap (GPG). Results from recently published research are mixed.
Do Investors Pay Less Attention to Women (Fund Managers)? YES
This article examines the research on gender bias and fund management. Specifically, we will focus on the gender-based attention bias.
Improving ESG Practices Boosts Valuations
This chart on creating shareholder value through ESG engagement is useful when evaluating if ESG practices boost valuations.