SeminarFinancial System Workshop
Wed, May 15, 2024
Financial System Workshop: “Decoding Sustainable Investment Strategies: Bridging Intentions and Actions”
Title
Decoding Sustainable Investment Strategies: Bridging Intentions and Actions
Abstract
Our study employs a novel machine-learning approach to uncover the underlying intentions driving U.S. mutual funds’ sustainable investment strategies. The identified intentions include financial value, categorical morality, and impact. While categorical morality is implemented via exclusion, impact is generated via active investment and engagement, and they each satisfy distinct nonpecuniary preferences. We find that the majority of funds labeled as “sustainable” prioritize enhancing financial value or adhering to categorical morality over generating impact. Notably, our method reveals the prevalence of hybrid funds, blending financial and moral objectives. This blended strategy amounts to rebalancing portfolios with high ESG-rated stocks to mitigate risk, while underweighting sin industries. Impact-driven funds, though less prevalent, exhibit distinctive management practices, actively engaging with portfolio companies and supporting social and environmental shareholder proposals. Our results underscore the negative correlation between financial and impact goals. These findings illuminate the need for clear classification labels to differentiate between ‘doing well and being good’ versus ‘doing good’. By clarifying fund sustainability objectives, our methodology enhances investor welfare by facilitating informed decision-making tailored to individual preferences. Understanding the heterogeneous underlying preferences of sustainable investors and the potential tension between them can in turn inform policy decisions, investment practices, and corporate behavior.
Date & Time
Wednesday, May 15th, 2024 15：00 – 16:30
※Pre-registeration NOT necessary
Venue
Kojima Seminar Room 3
2F of Economics Research Annex (Kojima Hall)
https://www.carf.e.u-tokyo.ac.jp/access/#campusmap
Speaker
Ayako Yasuda
Professor of Finance
Graduate School of Management
University of California, Davis
Meeting
Meeting with Professor Yasuda will be held before and after the workshop for undergraduate and graduate students, scholars, and researchers who are planning to participate in this WS.
— Meeting Schedule —
1st slot 14:00 – 14:30
2nd slot 14:30 – 15:00
(15:00 – 16:30 Workshop)
3rd slot 16:30 – 17:00
4th slot 17:00 – 17:30
5th slot 17:30 – 18:00
30min for each slot
Only 1 application per person is allowed.