Abstract
Fund flows determine assets under management and are therefore highly valued by investment managers. This article is concerned with whether the United Nation’s Principles for Responsible Investing (PRI) can drive fund flows towards socially responsible investing (SRI) funds. If so, signing the PRI will be highly valued by investment managers are enable the PRI to influence investment practices and create a sustainable financial system.
There are significant endogeneity issues encountered in fund flow analysis, so innovative techniques are necessary. Natural experiments are considered the “gold standard” for addressing endogeneity problems. SRI fund flows are an ideal context for creating natural experiments using environmental, social and governance (ESG) events. Unfortunately, the results from these experiments raise doubts about the ability of the PRI to influence SRI fund flows. This outcome questions the value of signing the PRI for investment managers and implies the PRI has limited scope to contribute to sustainable developments
There are significant endogeneity issues encountered in fund flow analysis, so innovative techniques are necessary. Natural experiments are considered the “gold standard” for addressing endogeneity problems. SRI fund flows are an ideal context for creating natural experiments using environmental, social and governance (ESG) events. Unfortunately, the results from these experiments raise doubts about the ability of the PRI to influence SRI fund flows. This outcome questions the value of signing the PRI for investment managers and implies the PRI has limited scope to contribute to sustainable developments
| Original language | English |
|---|---|
| Title of host publication | GRASFI 2020 |
| Subtitle of host publication | 3rd Annual Conference of the Global Research Alliance for Sustainable Finance and Investment : Program |
| Place of Publication | New York, NY |
| Number of pages | 1 |
| Publication status | Published - 10 Sept 2020 |
| Event | The Global Research Alliance for Sustainable Finance and Investment Annual Conference (3rd : 2020) - Columbia University, New York, United States Duration: 8 Sept 2020 → 11 Sept 2020 https://www.susfinalliance2020.org/ |
Conference
| Conference | The Global Research Alliance for Sustainable Finance and Investment Annual Conference (3rd : 2020) |
|---|---|
| Abbreviated title | GRASFI 2020 |
| Country/Territory | United States |
| City | New York |
| Period | 8/09/20 → 11/09/20 |
| Internet address |
Keywords
- Socially responsible investing
- natural experiment
- Environmental, social and governance issues
- fund flows