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Low-carbon mutual funds allow investors to purchase lower exposure to climate change risk at the cost of lower sectoral diversification. On balance, this proposition proves to be appealing for investors, as seen from the effect on fund flows of the introduction of Morningstar’s “Low Carbon Designation”, and of subsequent updates.
Active funds that missed the label at its initial release later shifted their holdings towards less carbon-intensive firms. The competition of intermediaries for investment flows along climate performance can thus have far-reaching consequences for investors.
In this paper, we investigate whether reform of EU company law is needed to make corporate governance more sustainable through an analysis of some of the...
We document a new channel through which a firm’s sustainability policies can contribute positively to its bottom line, by reducing labor costs and by...