Archiv der Kategorie: Bonds

Climate investment research: Researchpost #121

Climate investment research: 11x new research on digital productivity, crimes, ESG fees, green home bias, disclosure, infrastructure, brown news, ECB impact, shareholder engagement, and public-private deals

Social and ecological research

Digital productivity limits: Digitalisation and productivity: gamechanger or sideshow? by Robert Anderton, Vasco Botelho, Paul Reimers as of March 9^th, 2023 (#26): „We use a large balance sheet panel dataset comprising more than 19 million European firm-level observations … the firm that exhibits on average a higher share of investment in digital technologies will exhibit a faster rate of TFP (Soe: total factor productivity) growth … Digitalisation does not seem to have relatively stronger impacts on the productivity of frontier firms compared to laggards, nor does it help to turn laggards into frontier firms. … Digital technologies … seem more like a sideshow for most firms, who attempt to be increasingly digital but are not able to adequately reap its productivity gains” (abstract).

Pollution leads to crimes: Symptom or Culprit? Social Media, Air Pollution, and Violence by Xinming Du as of March 9^th, 2023 (#6): „… Together with higher air pollution, I find more aggressive behaviors both online and offline, as well as worse health outcomes near refineries. A one standard deviation increase in surrounding VOCs (Sö: volatile organic compounds) leads to 0.16 more hate crimes against Black people and 0.23 more hospital visits per thousand people each day. … On days with pollution spikes, surrounding areas see 30% more offensive and racist tweets and 12% more crimes; those geographically distant but socially networked regions also see offensive and racist tweets increase by 3% and more crimes by 4.5% …” (abstract).

Responsible and climate investment research

Higher ESG fees: Capitalists or fiduciary conscious agents? ESG mutual fund fees and investor sophistication by Wei Wei and Anna (Ania) Zalewska as of March 16^th, 2023 (#19): “We use a sample of 2,055 U.S. equity mutual funds … and find that fund families do exploit retail ESG investor’s low performance sensitivity when setting fees of ESG funds. In contrast, we find no evidence of such practices in the sample of institutional funds. Moreover, we find that the exploitative fee setting practices observed in the retail sample are driven by marketing fees and not by operating fees“ (abstract).

Advert for German investors: “Sponsor” my research by investing in and/or recommending my article 9 mutual fund. The fund focuses on social SDGs and midcaps, uses separate E, S and G best-in-universe minimum ratings and broad shareholder engagement. The fund typically scores very well in sustainability rankings, e.g. see this free new tool, and the performance is relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T, see also Artikel 9 Fonds: Kleine Änderungen mit großen Wirkungen? – (prof-soehnholz.com)

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ESG voting, climate WTP and more new research: Posting #119

ESG voting: 14x new research on corporate ESG nudges, 3x WTP for climate, ESG strategies, green bonds, greenwashing, ESG ratings, climate stress tests, bad award effects, mental accounting and PE issues

Social and ecological research: ESG voting

Corporate ESG nudges: Not Only for the Money: Nudging SMEs to Promote Environmental Sustainability by Manuel Grieder, Deborah Kistler, Felix Schlüter, and Jan Schmitz as of Feb. 9^th, 2023 (#36): “This paper reports the results of a field experiment in Switzerland investigating behavioral economic interventions for promoting an environmental consulting program to SMEs. … The results indicate that loss frames are not more effective than gain frames. Unlike suggested by previous approaches, appealing to the environmental benefits of sustainability measures is just as effective as underlining the financial benefits for the SMEs. Evidence from two surveys with SME decision makers corroborates this latter result: SMEs indicate that personal motivations of owners or managers and long-term environmental impact—rather than potential financial benefits—are the most important factors determining whether they are willing to implement additional environmental sustainability measures” (abstract).

Some WTP: Willingness to Pay for Clean Air: Evidence from the UK Prepared by Giorgio Maarraoui, Walid Marrouch, Faten Saliba and Ada Wossink as of Feb. 23^rd, 2023 (#10): “Our results show that 1 percent higher levels of NO2, PM10 and PM2.5 significantly decrease the odds of the log of happiness by 9, 9.5 and 10.7 percent respectively … Evaluated at the mean income level, households are willing to pay £62.5, £60 and £103 per month to abate 1 mikrogram/cubic meter of these pollutants respectively and remain equally happy, with urban dwellers paying less than this amount and highly educated individuals paying more than that (except for PM2.5)” … Our results show that 1 percent higher levels of NO2, PM10 and PM2.5 significantly decrease the odds of the log of happiness by 9, 9.5 and 10.7 percent respectively” (p. 24/25).

Advert for German investors: “Sponsor” my research by investing in and/or recommending my article 9 mutual fund. The fund focuses on social SDGs and midcaps, uses separate E, S and G best-in-universe minimum ratings and broad shareholder engagement. The fund typically scores very well in sustainability rankings, e.g. see this free new tool, and the performance is relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T, also see Artikel 9 Fonds: Sind 50% Turnover ok? – Responsible Investment Research Blog (prof-soehnholz.com)

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Greenium research and more: Researchposting 117

Greenium research: 25x new research on green subsidies, nature investing, populism, financial crime, ESG regulation, climate agreements, ESG scandals, transition, institutional investors, greenium, CDS, green loans, voting, multi-assets, gold, commodities, real estate, and private equity

Social and ecological research

Good green subsidies? Environmental Subsidies to Mitigate Net-Zero Transition Costs by Eric Jondeau, Gregory Levieuge, Jean-Guillaume Sahuc, and Gauthier Vermandel as of Jan. 13^th, 2023 (#298): “The implementation of a pure carbon tax policy to reduce CO2 emissions would result in substantial GDP losses because firms would divert resources to invest in environmental goods and services that are provided by an immature and low-competition sector. Mitigating the induced recession is possible through a massive subsidization of EGSS (Environmental Goods and Services Sector). By reducing labor costs for both entrants and incumbents operating in this sector, such a policy would accelerate its development and offer a large reduction in the selling price of abatement technologies. … Eventually, the GDP loss would be reduced from $266 trillion between 2019 and 2060 to $145 trillion. Importantly, reducing entry costs in EGSS would accelerate the transition and reduce the GDP loss mainly at the beginning of the transition” (p. 41/42).

More public spending? Nature as an asset class or public good? The economic case for increased public investment to achieve biodiversity targets by Katie Kedward, Sophus zu Ermgassen, Josh Ryan-Collins, and Sven Wunder as of Dec. 28^th, 2022 (#671): “Financial instruments for attracting large-scale private finance into conservation often incur high transaction costs to ensure ecological effectiveness, which potentially conflict with institutional investors’ need for competitive returns, market efficiency, and investment scalability. … Strategies to mobilize investor involvement by using public funds to ‘de-risk’ nature investments may not be as promising as assumed, given the costly exercise required to render nature markets conventionally ‘investible’. … Public financing is often more suitable to incentivize the imminent bundled nature of ecosystem services provided” (abstract).

Money crimes (1): Financial Crime: A Literature Review by Monica Violeta Achim, Sorin Nicolae Borlea, Robert W. McGee, Gabriela-Mihaela Mureşan, Ioana Lavinia Safta (Plesa) and Viorela-Ligia Văidean as of Dec. 19^th, 2022 (#52): “This chapter reviews the literature on some of the subfields of economic and financial crime. Among the topics discussed are tax evasion, bribery, money laundering and corruption in general. The determinants of financial crime are also identified. Several demographic variables are also examined to determine whether gender, age, education, income level, religion, geographic region, size of city, etc., are statistically significant. Nearly 150 studies are mentioned“.

Money crimes (2): Financial Crime: Conclusions and Recommendations by Monica Violeta Achim, Sorin Nicolae Borlea, Mihai Gaicu, Robert W. McGee, Gabriela-Mihaela Mureşan, and Viorela-Ligia Văidean as of Dec. 21^st, 2022 (#14): “This chapter discusses the conclusions and recommendations resulting from the study. A series of infographs is included to summaries the results of the study …” (abstract).

Complex ESG compliance: EU Sustainable Finance: Complex Rules and Compliance Problems by Félix E. Mezzanotte as of Feb. 12th, 2023 (#100): “Complexity is first identified in MiFID II rules covering the legal definition of sustainability preferences and the suitability requirements applicable to asset managers and investment advisors. … complex rules have been found to promote noncompliance. The underlying rationale, supported by this article, is that complex rules amplify the compliance burdens faced by companies” (p. 2).

Advert for German investors: “Sponsor” my research by investing in and/or recommending my article 9 mutual fund. I focus on social SDGs and midcaps, use separate E, S and G best-in-universe minimum ratings and shareholder engagement. The fund typically scores very well in sustainability rankings, e.g. see this free new tool, and the performance is relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T

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Bank climate risks and more (Researchblog 113)

Bank climate risks: >20x new research on CO2 bio-capture, ESG ratings, inflation, greenwashing, diversity, gender pay gap, shareholder engagement, investment consultants, ML and hybrid robo-advisors

Social and ecological research

CO2 bio-capture: Scalable, Economical, and Stable Sequestration of Agricultural Fixed Carbon by Eli Yablonovitch and Harry Deckman as of Dec. 28^th, 2022 (#129): “We describe a scalable, economical solution to the Carbon Dioxide problem. CO2 is captured from the atmosphere by cellulosic plants, and the harvested vegetation is then salted and buried in an engineered dry biolandfill. Plant biomass can be preserved for hundreds to thousands of years by burial in a dry environment … Current agriculture costs, and biolandfill costs indicate US$60/tonne of sequestered CO2 which corresponds to ~US$0.60 per gallon of gasoline. The technology is scalable owing to the large area of land available for cellulosic crops, without disturbing food production. If scaled to the level of a major crop, existing CO2 can be extracted from the atmosphere, and simultaneously sequester a significant fraction of world CO2 emissions” (abstract).

Regulated innovation: The effects of environmental innovations on labor productivity: How does it pay to be green by Hannu Piekkola and Jaana Rahko as of Jan. 10^th, 2023 (#6): “This paper adds to the literature by examining environmental innovations as part of overall firm innovation activity among Finnish manufacturing and energy sector firms … Our empirical analysis shows that regulation-driven environmental innovations enhance productivity … Introducing new environmental regulations increases environmental innovativeness, which in turn leads to improved firm performance that can apparently compensate for all of the costs of regulation. Nordic firms may have benefited from a first-mover advantage by becoming green in many industries … Many companies set targets for themselves that are even stricter than what the regulations require because they want to set a model for other companies and stakeholders” (p. 21/22).

Advert for German investors: “Sponsor” my research by investing in and/or recommending my article 9 mutual fund. I focus on social SDGs and midcaps and use separate E, S and G best-in-universe minimum ratings. The fund typically scores very well in sustainability rankings, e.g. this free new tool, and the performance is relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T

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Positive immigration and more little known research (Researchposting 110)

Positive immigration: >20x new research on climate conflicts, inequality, immigration, gas price break, carbon pricing, solar sharing, cool cities, brown banks, greenwashing, biodiversity, analysts and consultants, voting and engagement and private equity by Christina Bannier, Lucian Bebchuk, Alexander Wagner et al.

Social research: Positive immigration and more

Climate conflicts: Climate Shocks and Domestic Conflicts in Africa by Yoro Diallo and René Tapsoba as of December 29^th, 2022 (#8): “We build on a broad panel of 51 Africa countries over the 1990-2018 period. We unveil key results with far-reaching policy implications. First, we find suggestive evidence that climate shocks, as captured through weather shocks, increase the likelihood of domestic conflicts, by as high as up to 38 percent. Second, the effect holds only for intercommunal conflicts, not for government-involved conflicts. Third, the effect is magnified in countries with more unequal income distribution and a stronger share of young male demographics, while higher quality social protection and access to basic health care services, stronger tax revenue mobilization, scaled up public investment in the agricultural sector, and stepped-up anti-desertification efforts appear as relevant resilience factors to this vicious climate-conflicts nexus” (p. 26).

Wealth inequality: Who Gets the Flow? Financial Globalisation and Wealth Inequality by Simone Arrigoni as of December 13^th, 2022 (#14): “The main result points towards a significant positive link between the increase in financial globalisation (proxied with the IFI) and changes in the top 1% (the rich) and 10% (upper middle-class) wealth shares and a significant negative link with changes in the wealth share of the bottom 50% of the distribution (working class). … I find that the main driving components of this result appear to be portfolio equities and financial derivatives. … I find that the increase in inequality following the acceleration in financial globalisation is driven by the flow. The wealthy get richer due to an expansion of their portfolios rather than just a market value gain on their existing stock of wealth. … the main finding is strengthened in the event of a systemic banking crisis“ (p. 25/26).

Gender inequality gaps: Tackling Gender Inequality: Definitions, Trends, and Policy Designs by Baoping Shang as of Dec. 21^st, 2022 (#27): “… gender inequality needs to be distinguished from gender gaps. … addressing gender inequality benefits everyone, not just women. … as gender inequality becomes more subtle and implicit, targeted gender policies will likely need to play an increasing role … The paper concludes by discussing gaps in the literature and policy challenges going forward” (abstract).

Advert for German investors: “Sponsor” my research by recommending my article 9 fund. The minimum investment is approx. EUR 50 and return and risks are relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T: I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings. The fund typically scores very well in sustainability rankings, see this new tool for example.

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Artikel 9 ETF-Portfolios bzw. PAB ETF-Portfolios sind attraktiv

Artikel 9 ETF-Portfolios: Mein erstes nachhaltiges ETF-Portfolio habe ich 2015 entwickelt und Anfang 2016 online gestellt. Meines Wissens war dieses ESG ETF-Portfolio damit das erste derartige öffentliche Portfolio weltweit. Das Ziel war und ist weiterhin, eine möglichst breite Asset-Allokation mit möglichst nachhaltigen ETFs umzusetzen (vgl. Das-Soehnholz-ESG-und-SDG-Portfoliobuch.pdf (soehnholzesg.com), S. 95ff). Das hat bisher nicht nur konzeptionell, sondern auch rendite- und risikomäßig gut funktioniert (vgl. www.soehnholzesg.com).

Meine erste nachhaltige ETF-Portfoliogeneration: Konzeptionelle Selektion

Zum Start gab es nur nachhaltige ETFs für hochkapitalisierte Aktien aus Industrieländern und für Unternehmensanleihen. Erst nach und nach konnten zusätzliche Marktsegmente mit verantwortungsvollen ETFs abgedeckt werden. Aktuell sind auch nachhaltige ETFs für Immobilien- und Infrastrukturaktien, niedrig kapitalisierte Unternehmen, Unternehmen aus Entwicklungsländern und, als mein Ersatz für Staatsanleihen, Anleihen multilateraler Entwicklungsbanken verfügbar.

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ESG bonus: Researchblogposting #109

ESG bonus: 15x new research on inequality, diversity, PRI, greenium, fintech, incompetences, engagement, 1/n and more by Peter Mülbert, David Walker, Malcom Baker, Lucian Bebchuk, Marie Dutordoir, Guofu Zhou, Dirk Zetzsche, David Larcker, Raina Gibson, Pedro Matos et al.

Environmental and social research

Climate action: Adaptation platforms – a way forward for adaptation governance in small cities? Lessons learned from two cities in Germany by Julia Teebken, Nicole Mitchell and Klaus Jacob as of Dec. 7^th, 2022 (#6): “… we introduce adaptation platforms as a novel, low-threshold approach to initiate climate adaptation governance in small cities. … In Boizenburg (Elbe) in Northern Germany, an adaptation platform (“Platz-B”) was set up in the municipal administration. In the local authority association of Liebenwerda, in Eastern Germany, the platform (“Lighthouse Louise”) was developed through an association, which is organized by civil society. We present the context conditions for establishing the platforms, their core principles, functions, and some of the adaptation projects which were initiated“ (abstract).

Inequality drivers: Hours Inequality by Daniele Checchi, Cecilia García-Peñalosa, and Lara Vivian as of Dec. 14^th, 2022 (#16): “… while the contribution of hours worked to earnings inequality is moderate in France and the US, it explains between 30 and 40 percent of earnings inequality in Germany and the UK. … it could be that individuals with higher wages now work more (supply-side) or that jobs that pay lower wages also provide fewer hours (demand-side) … the increase in female employment observed in all countries tending to increase inequality. … If reduced working hours are the result of individual choices, the increase in leisure may offset the loss in relative income and result in higher welfare. Alternatively, if low-pay workers are unable to work as much as they would like … then a deteriorated income position will be associated with under-employment and hence a loss in utility“ (p. 24).

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Green illusion: Researchblogposting #108

Green illusion: 15x new research on social media, Scope 3, CSR, ESG bonifications, sovereigns, pensions, securitization, microfinance, trend-following, IQ, VCs and fintech by Jonas Heese, Andreas Hoepner, Fabiola Schneider et al.

Ecological and social research: Green illusion

Good social media: The Monitoring Role of Social Media by Jonas Heese and Joseph Pacelli as of Nov. 22^nd (#104): “This paper examines the effect of social media on firm misconduct through multiple empirical strategies. … Mobile broadband access, and 3G internet in particular, is a key driver of growth in the use of social media applications. Our results indicate that facilities reduce violations by 1.8% and penalties by 13% in the three-year period following the introduction of 3G. … our findings suggest that social media is an effective monitor of corporate misconduct” (p. 35/36). My comment: With my article 9 fund I invest in telecom infrastructure companies (i.a.)

Green illusion? Beyond Scope 3: Modelling Resilience to a Lower-Emissions Future by Debarshi Basu, Gerald T Garvey, Shuangzi Guo, and Ryan Zamani from Blackrock as of Dec. 6^th, 2022 (#31): “We … compute the full supply-chain adjusted carbon footprint of 57 industries in 54 countries … We find a significant full-scope carbon footprint of industries such as Finance and Health Care despite their small direct emissions. At the other end, high-emitting industries such as Air Transport, Retailing, and Rubber support a wide range of otherwise low-carbon downstream activities and appear resilient to a low carbon transition. To test the model with historical data, we use high historical energy prices to proxy more stringent carbon regulation. Industries that our model classifies as resilient perform equally across high and low energy prices. By contrast, industries that are currently classified as green based on naïve emissions significantly underperform in times of high energy costs” (abstract).

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Microfinance risk and more: Researchposting #107

Microfinance risk: 15x new research on publication biases, green innovation, supply chains, biocredits, greenium, ESG ratings and loans, CSR, Kickbacks etc. by Karol Kemper, Ulf Moslener, Nic Schaub, Simon Straumann, Pınar Yeşin et al.

Ecological and social research

Misleading research: Footprint of publication selection bias on meta-analysis in medicine, economics, and psychology by František Bartoš et al as of August 25^th, 2022: “… we survey over 26,000 meta-analyses containing more than 800,000 effect size estimates from medicine, economics, and psychology …. The median probability of the presence of an effect in economics decreased from 99.9% to 29.7% after adjusting for publication selection bias. This reduction was slightly lower in psychology (98.9% −→ 55.7%) and considerably lower in medicine (38.0% −→ 27.5%)” (abstract). My comment: There is always bias in research, with my approach, too, but is important to disclose it: 100 research blogposts since 2018 – Responsible Investment Research Blog (prof-soehnholz.com)

Brown innovations: Toxic Emissions and Corporate Green Innovation by Wenquan Li, Suman Neupane, and Kelvin Jui Keng Tan as of Oct. 23^rd, 2022 (#264): “Consistent with our main hypothesis, which hinges upon regulatory burden and environmental awareness, we show that high-emission companies produce more green patents of higher quality and value than low-emission firms. … We also find that environmental related green patents mitigate future toxic air releases“ (abstract). My question: Is internal financing sufficient or external capital required to finance these innovations?

Advert for German investors: “Sponsor” my research by recommending my Article 9 fund. The minimum investment is approx. EUR 50 and return and risks are relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T: I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings.

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Smart women: Researchblogposting #105

Smart women: 16x new research on populism, immigration, children, progress, renewables, CCUS, purpose, fossil fuels, green bonds and loans, social premium, resilience, sustainability preferences, and crowdfunding by Holger Spamann, Dorothea Schäfer, Andreas Stephan, Zacharias Sautner et al.

Social research: Smart Women

Smarter women (1): Income Misperception and Populism by Thilo N. H. Albers, Felix Kersting, and Fabian Kosse as of November 16^th, 2022 (#13): “Based on a representative sample of German households, we find that individuals with pessimistic beliefs about their own income position have more right-wing populist attitudes. …. Men are more likely to translate dissatisfaction resulting from income misperception into populist attitudes than women. Our findings show that misperception strongly matters for populist attitudes, also in comparison to the objective income position. … policymakers … could improve citizens’ information about the households’ respective relative income position. … unintended consequences could occur. For example, the radical Norwegian approach towards transparency—one could query the income of every citizen online—decreased happiness among the poor (Perez-Truglia 2020)“ (p. 15).

Old anti-immigrants? No Country for Young People? The Rise of Anti-Immigration Politics in Ageing Societies by Valerio Dotti as of Oct. 7^th, 2022 (#3): “… population ageing and rising income inequality increase the political pressure to restrict the inflow of immigrant workers and inflate the size of government. … We show that ageing and rising inequality can help explain the success of anti-immigration politicians and parties in recent years. … the tightening of immigration policy induced by population ageing and rising inequality is generally harmful, though the harm is most severe for young people and future generations” (p. 44).

Climate demographics: Are Environmental Concerns Deterring People from Having Children? by Ben Lockwood, Nattavudh Powdthavee, and Andrew J. Oswald as of Oct. 11^th, 2022 (#13): „Our study … follows through time a random sample of thousands of initially childless men and women in the UK. Those individuals who are committed to a green lifestyle are found to be less likely to go on to have offspring. Later analysis adjusts statistically for a large set of potential confounders, including age, education, marital status, mental health, life satisfaction, optimism, and physical health. … a person entirely unconcerned about environmental behaviour is found to be approximately 60% more likely to go on to have a child when compared to a deeply committed environment” (abstract).

Advert for German investors: “Sponsor” my research e.g. by buying my Article 9 fund. The minimum investment is approx. EUR 50 and so far return and risks are relatively good: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T: I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings.

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