Archiv der Kategorie: Innovation

ESG bonus Picture by Pixabay shows suitcase full of dollar bills

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. 7th, 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. 14th, 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).

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.

… continues on page 2 (# indicates the number of SSRN downloads on December 20th):

Microfinance risk: Picture of money which leads to plant growth

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 25th, 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. 23rd, 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.

Please go to page 2 (# indicates the number of SSRN downloads on December 7th):

Smart women: Picture show female teacher and students

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 16th, 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. 7th, 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. 11th, 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.

Please go to page 2 (# indicates the number of SSRN downloads on November 22nd):

Research: Foto von mir als Bild für den Beitrag

100 research blogposts since 2018

The beginning, stats and topics

„100 research blogposts“: I have been interested in scientific research for a very long time. Also, I have always enjoyed writing and published my first scientific articles while I was still a student. Since 2014 I have my own blog. I present links to and summaries of other people’s scientific contributions there since July 2018. Since mid-2019, I have been publishing 10 to 20 summaries of scientific studies every two weeks or so. On October 19, 2022, I created my one hundredth such research blogposts.

For this, I summarize research that I consider interesting and good. Initially, I focused only on research related to sustainable investing. Over time, other topics were added, specifically environmental, social, and corporate governance topics not directly related to investing, research on general investing topics such as asset allocation, fund selection, security selection, and risk management, and papers focusing on stocks, bonds, and especially alternative investments such as real estate, private equity, and hedge funds. In addition, cover financial technology (fintech) topics on advisortech, advicetech, wealthtech, and specifically model portfolios, robo-advisors, and direct indexing.

Research blogposts: Many sources and certain requirements

I mainly include scientific research articles which are free to access. My main source are the newsletters of publications of the Social Sciences Research Network. Currently, I subscribe to over 80 newsletters in the areas of Economics, Energy, Entrepreneurship, Financial Planning, Governance, Investments, Law, Management, Philosophy, Sociology, and Sustainability. From time to time I also actively search within SSRN for new contributions, especially those with the focus on ESG and Impact.

I also analyze contributions with interesting statistics from NGOs like Planet Tracker and for-profit organizations like Morningstar and MSCI and from my network (see e.g. my third-party links at www.prof-soehnholz.com). In addition, I point out innovative or surprising corporate activities, especially from the USA and Great Britain, which can serve as a model for German-speaking countries. I usually do not take into account unscientific surveys and purely conceptual or opinion contributions.

Early publication, but not necessarily peer-reviewed

Often, I am one of the first to download such contributions in their entirety. After briefly analyzing them, I include the contributions in my blogposts as soon as possible after they have been made available online. Also, I indicate the number of SSRN downloads at the time my blog post is published. This allows my readers to gauge how well-known or popular the research posts I include currently are.

At that point, the articles are often already scheduled for publication in scientific journals, but have not yet been reviewed by other scientists (i.e., without peer review). When downloading the full articles, SSRN explicitly points out this limitation. I myself cannot check the publications in detail for their quality, but I try to heed warning signals and to weed out bad contributions in advance, of which there are unfortunately more and more (cf. e.g. The Corrupt Institutions of Development Economics and Its Shadow Professoriate by Bryane Michael, September 10, 2022).

Anti-Quant research blogposts? Excursus on evidence

Left unconsidered are contributions that suggest they can generate future outperformance (alpha). This is due to the fact that many such studies are, in my opinion, based on so-called data mining and/or inappropriate or very sensitive models (this is what I call pseudo-optimizations, see e.g. Kann institutionelles Investment Consulting digitalisiert werden? Beispiele. – Responsible Investment Research Blog (prof-soehnholz.com)).

Similarly, I usually do not consider studies that attribute only positive diversification properties to any investments. The reason: If additional investments are different from already existing investments, one can, by definition, expect positive diversification properties.

Thus, I distance myself from so-called quantitative investors (quants) or a narrowly understood „quant“ evidence-based investments term. Thus, I do not define evidence-based investing to mean everything that can be shown with data as some others do, especially supporters of so-called factor investments. By evidence-based investments I understand that one should know the scientific results known at the time of investment and implement them if possible. I especially this definition: „Evidence-Based Investing (EBI) is a disciplined approach to asset management that combines the data we have from the past and present with honesty about the unknowable future. Where others would use forecasts, relationships or emotions to guide their decisions, practitioners of EBI would substitute facts, logic and reason“ (see 2016 Evidence Based Investing Conference by IMN; see also Evidence-Based Investing – Interesting for all Passive and Robo-Advisor Fans).

My biases and how I use evidence myself

I also have conscious and perhaps unconscious biases in that I primarily include research that could be relevant to financial investors and people interested in sustainability from Germany, Austria and Switzerland. My approach is selective and means that I certainly can not include all good contributions on the topics I mentioned above in my blog. Moreover, I do not present the complete abstracts or summaries of the respective contributions, but only the most important results from my point of view.

I have now been involved with sustainable investing for quite some time. After co-developing a Sustainable Private Equity fund of funds in 2007, I introduced ESG selection criteria for several equity funds starting in 2012. I pioneered ESG ETF portfolios (2015), pure ESG portfolios (2016) and SDG ETF portfolios (2019) and I am one of the first to advocate Direct ESG Indexing in Europe. Already in 2017, half of the portfolios I offered publicly were sustainable. Since then, new portfolios have been developed almost exclusively using ESG criteria and, more recently, SDG (Sustainable Development Goals) criteria. To do this, I take into account the findings from the studies I analyze as much as possible.

I also use the research findings to advise interested parties and clients. In „Das Soehnholz ESG und SDG Portfoliobuch„, my current investment principles and rules are documented in detail and in an „archive“ the corresponding documentation of previous years is also publicly available. I also use the research findings for my other publications, including my now nearly 200 other (“opinion”) blog posts.

Free for all research blogposts, including competitors

I want to advance evidence-based investing in general, and I don’t necessarily expect everyone interested in it to invest in my portfolios. That’s why I want to make the research as widely known as possible. This works best if I give it away for free. I am especially happy about supporters who further publicize my research. This can be done, for example, through social media referrals. I also like to collaborate with other companies. For example, Exxec News provides part of my research to its users for free.

The relatively extensive time I invest in reading and preparing the research I mentally chalk up to „pro-bono“ or marketing costs. Obviously, whoever would like to support my research activities is welcome to invest – starting at about 50 Euro – in my investment fund (see www.futurevest.fund) and/or recommend this fund or my other (model portfolio) services.

Additional information

My investment philosophy and portfolios: The Soehnholz ESG and SDG portfolio book

Blog posts by topic: Passive, responsible and online investing

Research blog posts: The Soehnholz ESG and Impact Research Book

Numerous other publications/presentations/videos at www.prof-soehnholz.com

This text has been translated with www.DeepL.com/Translator (free version)

ESG regulation: Das Bild von Thomas Hartmann zeigt Blumen in Celle

ESG overall (Researchblog #91)

ESG overall: >15x new research on fixed income ESG, greenium, insurer ESG investing, sin stocks, ESG ratings, impact investments, real estate ESG, equity lending, ESG derivatives, virtual fashion, bio revolution, behavioral ESG investing

Advert: Check my article 9 SFDR fund FutureVest Equity Sustainable Development Goals (-2,9% YTD). With my most responsible stock selection approach I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings.

Continue on page 2 (# indicates the number of SSRN downloads on July 25th):

Bild zum Beitrag ESG skeptical zeigt eine Ansicht einer Allee aus dem Celler Französischen Garten

ESG skeptical research (Researchblog #90)

ESG skeptical: >15x new and skeptical research on ESG and SDG investments, performance, cost of capital, reporting, ratings, impact, bonifications and artificial intelligence

Advert: Check my article 9 SFDR fund FutureVest Equity Sustainable Development Goals. With my most responsible selection approach I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings.

Continue on page 2 (# indicates the number of SSRN downloads on July 5th):

Heidebild als Illustration für Proven Impact Investing

ESG ok, SDG gut: Performance 1. HJ 2022

ESG ok, SDG gut: Im ersten Halbjahr 2022 haben meine Trendfolgeportfolios sowie die Portfolios, die sich an den nachhaltigen Entwicklungszielen der Vereinten Nationen ausrichten (SDG), zwar auch an Wert verloren, aber dafür relativ gut gegenüber Vergleichsgruppen performt. Das gilt besonders auch für den FutureVest Equities SDG Fonds. Anders als die meist OK gelaufenen globalen haben spezialisierte ESG Portfolios der Soehnholz ESG GmbH im ersten Halbjahr schlechter als traditionelle Vergleichsportfolios abgeschnitten. Dafür war deren Performance in der Vergangenheit oft überdurchschnittlich.

Werbemitteilung: Kennen Sie meinen Artikel 9 Fonds FutureVest Equity Sustainable Development Goals: Fokus auf soziale SDGs und Midcaps, Best-in-Universe Ansatz, getrennte E, S und G Mindestratings.

Auf Seite 2 folgt die Übersicht der Halbjahresrenditen für die 15 nachhaltigen und zwei traditionellen Portfolios von Soehnholz ESG sowie für meinen Fonds.

Pictures shows Fire Icon by Elionas

ESG and impact investments under fire (Researchpost #89)

Under fire includes >10x new research on ESG and factors, performance, commitment, regulation, scope 3 GHG, market potential, indices, reporting, engagement, and impact washing

Advert: Check my article 9 SFDR fund FutureVest Equity Sustainable Development Goals. With my most responsible selection approach I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings.

Continue on page 2 (# indicates the number of SSRN downloads on June 28th):

Nachhaltigkeitsfragen als Screenshot einer Präsentationsfolie

Deadline August: Müssen dann andere Fonds angeboten werden?

Deadline August: Ab August müssen AnlegerInnen aufgrund regulatorischer Vorgaben (MiFID II, IDD) nach ihren Nachhaltigkeitspräferenzen befragt werden. Auch künftig ist zunächst weiterhin die sogenannte Geeignetheit zu prüfen, speziell Renditeerwartungen, Risikokriterien, Zeithorizont und individuelle Umstände von InteressentInnen. Vereinfacht zusammengefasst muss künftig im Anschluss daran gefragt werden, inwieweit eines oder mehrere dreier Nachhaltigkeitsprodukttypen in Anlagen einbezogen werden sollen: Erstens ein Produkt mit einem ein Mindestanteil an ökologisch nachhaltigen Investitionen oder, zweitens, einem Mindestanteil an sozial nachhaltigen Investitionen oder drittens mit einer Mindest-ESG-Gesamtbeurteilung.

Werbemitteilung: Kennen Sie meinen Artikel 9 Fonds FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T mit Fokus auf soziale SDGs und Midcaps, Best-in-Universe Ansatz, getrennte E, S und G Mindestratings?

Auf Seite 2 geht es weiter:

Picture by SugarHima shows wooden fake wind generator to illustrate benchmarking problems

Benchmarking problems (Researchpost #88)

Benchmarking problems: Almost 20x new research on tax avoidance, net-zero illusions, brown and unsocial banks and mutual funds, negative ESG bonus, plastics, real estate, panic, monetary policy, missing data, wrong benchmarks, institutional herding, and fintechs

Advert: Check my article 9 SFDR fund FutureVest Equity Sustainable Development Goals. With my most responsible selection approach I focus on social SDGs and midcaps and use best-in-universe as well as separate E, S and G minimum ratings.

Continue on page 2 (# indicates the number of SSRN downloads on June 14th):