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

Citation

Daugaard, D, The value of a Principles for Responsible Investing designation: A setting for environmental social and governance natural experiments, 2021 AFAANZ Conference, 5-7 July 2021, Virtual Conference, Online (2021) [Conference Extract]

Abstract

Fund flows determine assets under management and are therefore highly valued by investment managers. This article is concerned with whether the United Nationís 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 and 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.

Item Details

Item Type:Conference Extract
Keywords:socially responsible investing, environmental and social governance, fund flows, natural experiment
Research Division:Commerce, Management, Tourism and Services
Research Group:Banking, finance and investment
Research Field:Environment and climate finance
Objective Division:Commercial Services and Tourism
Objective Group:Financial services
Objective Field:Investment services (excl. superannuation)
UTAS Author:Daugaard, D (Associate Professor Dan Daugaard)
ID Code:147451
Year Published:2021
Deposited By:Economics and Finance
Deposited On:2021-11-02
Last Modified:2021-12-02
Downloads:0

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