The real effects of sustainable & responsible investing?

Dieter Vanwalleghem (1)

1 ESC [Rennes] - ESC Rennes School of Business

Sustainable and responsible investing (SRI) may have a mixed effect on firms’ incentives to remove negative externalities. Whereas SRI screening incentivizes the removal of externalities, SRI trading can disincentivize it when traders disagree on the externality removal’s cash flow effects.

Mots clés: Sustainable and responsible investing; Externality; Asymmetric information; Open disagreement; Cost of capital

Domaines: Économie et finance quantitative [q-fin]

Dieter Vanwalleghem. The real effects of sustainable & responsible investing?. Economics Letters, 2017, 156, pp.10-14. ⟨10.1016/j.econlet.2017.04.008⟩. ⟨hal-02005421⟩