The value of a Principles for Responsible Investing designation: A setting for environmental social and governance natural experiments

Dan Daugaard

Research output: Chapter in Book/Report/Conference proceedingConference abstractpeer-review

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
Original languageEnglish
Title of host publicationGRASFI 2020
Subtitle of host publication3rd Annual Conference of the Global Research Alliance for Sustainable Finance and Investment : Program
Place of PublicationNew York, NY
Number of pages1
Publication statusPublished - 10 Sep 2020
EventThe Global Research Alliance for Sustainable Finance and Investment Annual Conference (3rd : 2020) - Columbia University, New York, United States
Duration: 8 Sep 202011 Sep 2020
https://www.susfinalliance2020.org/

Conference

ConferenceThe Global Research Alliance for Sustainable Finance and Investment Annual Conference (3rd : 2020)
Abbreviated titleGRASFI 2020
CountryUnited States
CityNew York
Period8/09/2011/09/20
Internet address

Keywords

  • Socially responsible investing
  • natural experiment
  • Environmental, social and governance issues
  • fund flows

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