Responsible Institutional Investing Around the World

Responsible Institutional Investing Around the World

Rajna Gibson Brandon, Simon Glossner, Philipp Krueger, Pedro Matos, Tom Steffen

Series number :

Serial Number: 
712/2020

Date posted :

November 25 2020

Last revised :

November 25 2020
SSRN Share

Keywords

  • ESG • 
  • SRI • 
  • PRI • 
  • socially responsible investing • 
  • Sustainability • 
  • institutional investors • 
  • greenwashing

We explore a novel survey on responsible investing by institutional investors around the world and match it to archival data on their equity portfolio holdings.

We document that institutions that publicly commit to responsible investing exhibit better environmental, social, and governance (ESG) portfolio-level scores ("footprints") but this is not the case for US-domiciled institutions. In fact, US investors that committed but only partially implement ESG strategies (e.g., screening, integration, engagement) exhibit worse ESG footprints than uncommitted investors, consistent with some "greenwashing." Finally, we document that responsible investing does not enhance portfolio returns but reduces risk.

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Authors

Real name:
Simon Glossner
Professor
Real name:
Pedro Matos
Research Member
Darden School of Business, University of Virginia
Real name:
Tom Steffen