Archiv der Kategorie: Wealthtech

Impactinvsting ideas illustrated by picture of tree by umut avci from Puxabay

Impactinvesting ideas – Researchblog #145

Impactinvesting ideas: 12x new research on terrorism, migrants, emissions, innovations, ESG-ratings, sustainable debt, impactinvesting, directors, ETFs, gamification and concentration by Timo Busch, Harald Hau, Ulrich Hege, Thorsten Hens and many more (#: SSRN downloads on Sept. 28th, 2023)

Social research

Terror success: Terrorism and Voting: The Rise of Right-Wing Populism in Germany by Navid Sabet, Marius Liebald, Guido Friebel as of Sept. 25th, 2023 (#15): “… we find that successful (Sö terror) attacks lead to significant increases in the vote share for the right-wing, populist Alternative für Deutschland (AfD) party. Our results are predominantly observable in state elections, though attacks that receive high media coverage increase the AfD vote share in Federal elections. These patterns hold even though most attacks are motivated by right-wing causes and target migrants. Using a longitudinal panel of individuals, we find successful terror leads individuals to prefer the AfD more and worry more about migration” (abstract).

Integration deficits: The Integration of Migrants in the German Labor Market: Evidence over 50 Years by Paul Berbée and Jan Stuhler as of Sept. 25th, 2023 (#47): “First, employment profiles tend to be concave, with low initial employment but rapidly increasing employment in the first years after arrival (convergence). However, income gaps widen with more time in Germany (divergence). … Second, for most groups the employment gaps do not close, despite the initial catch-up. … Third, the income and employment gaps close partially in the second generation, but the employment gaps shrink by only 25% and remain large for some groups. Finally, the perhaps most striking observation is the sudden collapse of employment among earlier arrivals from Turkey in the early 1990s. … The employment shares of the refugees arriving around 2015 are similar to earlier refugee cohorts, despite the unusual favorable labor market conditions and the increased focus on integration policies. Their predicted long-term gaps in employment (about 20-25 pp.) are more than twice as large as the corresponding gap for Ukrainian refugees (about 10 pp.). … Summing up, immigration has become indispensable for the German economy, and the experience from more than 50 years shows that many migrant groups achieve substantial employment rates and incomes. However, barriers to integration persist, and while integration policies have improved along some dimensions, as yet we see no systematic improvements in integration outcomes over time (“p. 36/37).

Ecological research

Loose commitments: Behind Schedule: The Corporate Effort to Fulfill Climate Obligations by Joseph E. Aldy, Patrick Bolton, Zachery M. Halem, and Marcin Kacperczyk as of Sept. 20th, 2023 (#66):  “We analyze corporate commitments to reduce carbon emissions. We show that companies in their decisions to commit are more driven by external shareholder pressure and reputational concerns rather than economic motives due to cost of capital effects. We further show that many companies focus on short-term pledges many of which get revised over time. Despite the growth in commitment movement, we find that most companies have fallen behind on their commitments for reasons that could be both systematic and idiosyncratic in nature“ (abstract).

Innovative suppliers: Climate Innovation and Carbon Emissions: Evidence from Supply Chain Networks by Ulrich Hege, Kai Li, and Yifei Zhang as of Sept. 14th, 2023 (#83): “… we ask (i) whether climate innovation invented by a supplier firm allows its customer firms to reduce CO2 emissions, and (ii) whether climate innovation facilitates the acquisition of new business customers and what types of customers. We find that climate innovations help customer firms to reduce carbon emissions …. Emissions savings are accentuated for high-emission firms and firm with stronger environmental concerns. … We show that customer firms generally have a strong preference for suppliers’ climate innovations. Moreover, we show that climate innovation allows suppliers to expand their customer base. We find that the capacity to attract new customers is more pronounced for customers with a strong preference for reducing their carbon footprint: these include firms with a strong preference for environmental protection, measured by their high environmental scores in their ESG ratings, but also firms with elevated GHG emissions that presumably anticipate regulatory or investor pressure to curtail their GHG emissions“ (p. 31/32). My comment regarding supplier relations see Supplier engagement – Opinion post #211 – Responsible Investment Research Blog (

ESG investment research: Impactinvesting ideas

E-Rating divergence: Environmental data and scores: Lost in translation by Enrico Bernardini, Marco Fanari, Enrico Foscolo, and Francesco Ruggiero from the Bank of Italy as of Sept. 19th, 2023 (#26): “… we find that environmental data have meaningful, although limited, explanatory power for the E-scores. … the scores of some providers are more related to raw data …. We identify some variables as significant and common across several providers, such as forward-looking measures like the presence of reduction targets for emissions and resource use as well as environmental and renewable energy policies. … We find the latent component to be heterogeneous across providers and this evidence may be due to different materiality in the providers’ assessments. Indeed, some providers focus their analysis on how the corporate financial conditions are affected by environmental issues, while others consider how corporate conduct can affect environmental conditions and others consider both perspectives (”double materiality”)” (p. 20).

More “sustainable” debt: Do Sustainable Companies Receive More Debt? The Role of Sustainability Profiles and Sustainability-related Debt Instruments by Julia Meyer and Beat Affolter as of Aug. 20th, 2023 (#89): “We have made use of three different sources of data to classify companies into one of three groups: (i) companies avoiding ESG risks (using the ESG rating), (ii) companies contributing to the SDGs (SDG score), and (iii) companies committed to transformation (SBTi targets or commitments). First, our results show that sustainability-related debt is largely issued by sustainable companies in all three dimensions. — Secondly, … we find a significant increase in levels of debt for more sustainable companies in all three dimensions. However, this increase seems not to be linked to the issuance of sustainability related debt instruments …. Our results, therefore, indicate that lenders have started to incorporate sustainability and transformation assessments over time and that good sustainability performance (again in all three dimensions) has led to additional debt financing compared to companies with a low sustainability performance” (p. 20).

Impactinvesting ideas: Research

Reactions to pollution: Sustainable Investing in Imperfect Markets by Thorsten Hens and Ester Trutwin as of Sept. 21st, 2023 (#42): “Given that the price for polluting the environment is too low, we show that impact investing can lead to a second-best solution. If at the margin the technology is ”clean”, investment should be increased while a capital reduction is appropriate if at the margin the firm’s technology is ”dirty”. However, sustainable investing requires households to anticipate the firm’s pollution activity. Therefor we show how the same solution can be implemented with ESG investing in which the burden of knowledge lies on the rating agency. Finally, we indicate that the first-best solution can be achieved by sustainable consumption” (abstract) My comment on impactinvesting ideas see Active or impact investing? – (

Few Institutional directors: Do Institutional Directors Matter? by Heng Geng, Harald Hau, Roni Michaely, and Binh Nguyen as of Feb. 21st, 2023 (#168): “We find that board representation by institutional investors is relatively rare in U.S. public firms compared to the high institutional ownership in U.S. public firms. Only 7.61% of Compustat firm-years from 1999-2016 feature at least one institutional director representing an institutional shareholder owning more than 1% of outstanding shares. Second, Additional analyses indicate that banks, sophisticated investors (e.g., hedge funds, private equity), and activist shareholders are likely to obtain board seats. By contrast, large retail funds generally do not seek board representation. Common institutional directors representing the so-called “Big Three” asset management companies, which are concerned most for the potential antitrust implications, are only found in only 37 intra-industry firm pairs. Our third set of results reveals that rival firms sharing institutional investors rarely feature joint board representation by the same institutional investor. More importantly, in the rare cases of joint board representation, we do not find evidence that such overlapping board representation is related to higher profit margins than what is already predicted by common institutional ownership in a firm pair” (p. 23/24). My comment: Selecting adequate board directors is one of many potential of impactinvesting ideas

Practical Impactinvesting ideas: Principles for Impact Investments: Practical guidance for measuring and assessing the life cycle, magnitude, and tradeoffs of impact investments by Timo Busch, Eric Pruessner and Hendrik Brosche as of Sept. 26th, 2023 (#62): “For the impact life cycle, we propose a clear set of principles that create a standard for how impact-aligned and impact-generating investments should measure and assess impact. Regarding the topic of impact magnitude, the principles provide guidance for how large a company impact must be for impact investments to be considered significant. Ideally by using thresholds to determine the magnitude of a company impact, impact investments are directly connected to sustainable development objectives“ (p. 19).

Other investment research

ETF effects: Rise of Passive Investing – Effects on Price Level, Market Volatility, and Price Informativeness by Paweł Bednarek as of Sept. 12th, 2023 (#117): “I find that the growth of passive investing did not increase the overall price level, thus contradicting the common ETF bubble hypothesis, which postulated that rapid growth in passive strategies may lead to the detachment of prices of these securities from fundamentals. … We estimate that about 10% of current market volatility can be attributed to the rise of passive investing. It also resulted in diminished price informativeness due to weakened information acquisition. Further reduction in passive management fees will strengthen these effects“ (abstract).

The bank wins: The Gamification of Banking by Colleen Baker and Christopher K. Odinet as of Sept. 26th, 2023 (#42): “After providing an overview of gamification in general, we examined its rise in the context of stock trading … We next turned to early appearances of gamification in banking … we think that its pace is about to accelerate. Our perspective is supported by a number of examples involving banks and fintechs partnering or combining to offer banking services through a game-like interface. As in Truist’s case, bank-fintech partnerships are on the cusp of the gamification of banking that we predict will develop in three stages, culminating with meg one-stop-shop financial intermediary platforms anchored by cloud computing service providers“ (p. 39/40).

Better >10 stocks: Underperformance of Concentrated Stock Positions by Antti Petajisto as of Aug. 28th, 2023 (#473): “… we find that the median stock has underperformed the cap-weighted market portfolio by 7.9% over rolling ten-year investment periods (or 0.82% per year) since 1926. The relative underperformance over rolling ten-year periods increases to 17.8% (or 1.94% per year) when considering only stocks whose performance ranked in the top 20% over the prior five years. … the observed underperformance of the median stock applies across all industry groups and among both the smallest and largest stocks“ (p. 18/19). My comment: In this research concentrated means 10% or higher allocation to every stock. Here you find more research and my opinion: 30 stocks, if responsible, are all I need – Responsible Investment Research Blog (


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Direct Indexing (ESG) shows Pixabay picture of colorful face from Alexandr Ivanov

Direct Indexing (ESG) and more: Researchpost #130

Direct Indexing (ESG): 10x new research on brownshifting, denials, greenwashing, lack of ESG products, missing research, sin premium, female private equity, fintech and AI-accountants by Lubos Pastor, Robert Stambaugh, George Serafeim, Andreas Hoepner, Marc Eulerich and many more (# shows SSRN downloads on June 8th)

Social and ecological research

Brownshifting? Are Firms Voluntarily Disclosing Emissions Greener? by Yilin Shi, Christopher S. Tang, and Jing Wu as of May 22nd, 2023 (#132): “… we use different regression models to show that disclosing firms tend to have lower internal emissions (Scope 1) and yet they have higher Scope 3 external emissions generated by their upstream suppliers. This finding reveals that disclosing firms are not necessarily greener. Instead, they may have shifted their emissions to their upstream suppliers knowingly or unknowingly” (p. 27).

Denial based violations: Climate Change Denial and Corporate Environmental Responsibility by Mansoor Afzali, Gonul Colak,  and Sami Vähämaa as of April 25th, 2023 (#85): “… firms located in counties with higher levels of climate change denial have weaker environmental performance ratings … Furthermore, … firms headquartered in high climate change denial counties are more likely to commit federal environmental compliance violations. … strong corporate governance mechanisms and corporate culture moderate the negative relationship between climate change denial and corporate environmental responsibility” (p. 31).

Responsible investment research: Direct Indexing (ESG)

Clear Greenwashing? Green Tilts by Lubos Pastor, Robert F. Stambaugh, and Lucian A. Taylor as of May 31st, 2023 (#80): “The total amount of ESG investing is substantial but much smaller than the aggregate AUM of institutions that proclaim to invest in line with ESG-related principles. Our estimates indicate that the total amount of ESG-related tilts in institutional equity portfolios is about 6% of the institutions’ total equity AUM. This fraction has been fairly steady throughout our sample from 2012 to 2021. … our approach allows the three dimensions of ESG to enter separately, recognizing, for example, that investors may assess Tesla’s environmental virtues separately from Tesla’s treatment of its employees. We find that using only a composite ESG score misses over 40% of the tilts associated with the E, S, and G characteristics. We also find that each of those three dimensions contributes about equally to ESG-related tilts. … institutions divest from brown stocks mostly by reducing positions rather than eliminating them. … the … steady rise in the investment industry’s aggregate net green tilt is fully driven by the largest third of institutions … whereas smaller institutions are increasingly brown … the least green institution type is banks“ (p. 23/24). My comment: This analysis clearly shows that there is still a huge potential for additional green investments (or that we currently can observe is a lot of greenwashing)

Few ESG products? ESG: From Process to Product by George Serafeim as of June 7th, 2023 (#2250): “ESG is the process of measuring relevant resources and outcomes, analyzing the resource allocation process that could derive optimal outcomes for an organization, managing those resources to improve outcomes, and communicating the management of those resources and outcomes to stakeholders of the organization. Therefore, as a process, it can be implemented by any organization as they see fit with their purpose and strategy. … A conceptual framework for ESG investment products defines their objectives, identifies their fundamental characteristics, and highlights enhancing characteristics that could create ‘shades of ESG,’ in a continuum range rather than as a binary outcome. Central to the conceptual framework is the need for verifiability of intentions, through documentation of organizational beliefs, processes, and capabilities, and the measurement of outcomes from those intentions. Given lack of those attributes across many investment funds, the market size of eligible ESG investment products is likely to be much smaller than otherwise thought” (p. 15/16). My comment: My approach is documented in detail see Das-Soehnholz-ESG-und-SDG-Portfoliobuch.pdf (

Direct Indexing (ESG): Portfolio Choice with ESG Disagreement: Customizing Sustainability Through Direct Indexing by Paul Ehling, Stig Roar Haukø Lundeby, and Lars Qvigstad Sørensen as of Jan. 18th, 2023 (#150): “Previous research has demonstrated that, despite similar aims, there is considerable diversity across the ESG ratings. This paper has detailed that this divergence persists when maximizing ESG scores subject to a tracking error constraint. … from a risk point of view, the optimized ESG portfolios differ more across each other than they differ relative to the benchmark. Further, we showed that on average the optimization tilts toward good ESG scores for large stocks with low specific risk. The implication is that an ESG-motivated portfolio differs substantially based on the agency chosen for the ESG ratings. If clients choose a single ESG rating provider, this must be a deliberate decision after ascertaining that the vendor provides ratings in accordance with the client’s values and beliefs. … The techniques detailed in this paper to manage ESG uncertainty could be made available to direct indexing clients, enabling them to choose portfolios aligned with their ESG preferences as there is mounting evidence that ESG is in the eye of the beholder“ (p. 12/13). My comments: First: There are millions of indices available. Tracking error to any one index should not be an investor priority. Second: Aggregating different ESG-ratings creates intransparency: Why which rating I good or bad cannot be identified easily anymore. Third: It is better to start direct indexing (ESG) with a universe with very sustainable investments according to convincing ESG-ratings and then deselect investments based on personal values, see Custom ESG Indexing Can Challenge Popularity Of ETFs ( or Direct ESG Indexing: Die beste ESG Investmentmöglichkeit auch für Privatkunden? – Responsible Investment Research Blog (

Missing research: Sustainability in Private Capital Investing: A Systematic Literature Review by Majid Mirza, Truzaar Dordi, Pedro Alguindigue, Ryan Johnson, and Olaf Weber as of April 23rd, 2023 : “… It was found that less than 1% of the literature, written in English, between 1960−2020 on private equity and venture capital addresses topics related to sustainability. … The objective of this paper is to provide evidence of the dearth of academic literature on the topic of private capital markets and sustainable investment, while identifying current themes in the existing literature so that future work may address gaps in research” (abstract).

General investment research: Direct Indexing (ESG)

Sin Premium? Measuring Business Social Irresponsibility: The Case of Sin Stocks by Hamid Boustanifar and Patrick Schwarz as of March 30th, 2023 (#222): “We propose a novel method based on the textual analysis of corporate annual reports to identify sin stocks and to measure their sinfulness. Our method performs much better than the procedure used in the prior literature, which relies on using industry classification codes. … Contrary to the findings of several recent studies, we find strong evidence consistent with the existence of a sin premium. A sin-weighted (but not necessarily an equal- or value-weighted) portfolio of sin stocks generates a FF6 alpha (Söhnholz: Fama French Six Factor Ouperformance) of 4% per year from 1997 to 2021. This suggests that investors require higher expected returns to hold more sinful stocks“ (p. 27/28). My comment: I doubt that there will be enough buyers willing to pay sin premia in the future, see 30 stocks, if responsible, are all I need – Responsible Investment Research Blog (

Female PE impact: Does Gender Influence the Investment Strategy of Private Equity Firms? Evidence from Impact Investing by Theodor Cojoianu, Pia Helbing, Andreas G. F. Hoepner, Xi Hu and Beiyun Xiao as of April 25th, 2023 (#68): “Using a comprehensive dataset on all PE deals from 2010-2021, we uncover new evidence that … female ownership significantly increases the probability of impact investment strategy. We find pronounced differences of this relationship between Common (positive) and Civil (negative) Law countries. … It appears that there is a gender difference on impact investing strategy that can be identified at the PE, syndicate or deal level …” (p. 13).

Mind the Gap: Fintech, investor sophistication and financial portfolio choices by Leonardo Gambacorta, Romina Gambacorta, and Roxana Mihet as of May 31st, 2023 (#13):“… we present a simple micro-founded model that derives testable predictions on the links between financial technologies, investors’ degree of sophistication, and their portfolio choices and financial returns. Using microdata from the Survey on Household Income and Wealth conducted by Banca d’Italia over the period 2004-20, we … find that the gaps in financial returns and share of risky assets between sophisticated and unsophisticated investors increase with progress in financial technology. This means that inequality is reduced only if financial technology is accessible to everyone, and if all investors have the same capacity to use it“(p. 35/36).

AI-Accountants: Can Artificial Intelligence Pass Accounting Certification Exams? ChatGPT: CPA, CMA, CIA, and EA? by Marc Eulerich, Aida Sanatizadeh, Hamid Vakilzadeh and David A. Wood as of June 3rd, 2023 (#1228): “We … examine if newly released ChatGPT models and capabilities can pass major accounting certification exams including the CPA, CMA, CIA, and EA (enrolled agent) certification exams. We find that the early released ChatGPT 3.5 model is unable to pass any exam … However, with additional efforts … ChatGPT averaged a score of 85.1 percent across all sections of exams and passed them all. This high performance suggests ChatGPT has sufficient performance that it likely will prove disruptive to the accounting and auditing industries” (abstract).


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Finfluencers: influencer picture by Gerd Altmann from Pixabay

Finfluencers: Researchpost #126

Finfluencers: 14x new research on CO2 storage, climate learnings, sustainable bonds, diversity, impact investing, active investing, and finfluencers by Laurens Swinkels, Alex Edmans, Caroline Flammer, Simon Glossner, Jeffrey Ptak, Michael Kitces, Norman Schürhoff, Christian Klein et al. (# indicates the number of SSRN downloads on May 9th, 2023)

Ecological and social research

CO2 Storage? CO2 storage or utilization? A real options analysis under market and technological uncertainty by Hanne Lamberts-Van Assche, Maria Lavrutich, Tine Compernolle, Gwenny Thomassen, Jacco Thijssen, and Peter M. Kort as of April 24th, 2023 (#8): “First, the presence of technological and market uncertainties … increase the barriers to invest in CCS or CCU. Second, when the firm anticipates the arrival of a more attractive CCU solution in the future, it will not postpone the investment in CCS. …. Third, higher uncertainty in the CO2 price, i.e. higher σ, increases the investment thresholds, while a higher trend in the CO2 price, i.e. higher α, decreases the investment thresholds for CCS and CCU. … First, policymakers should aim to ensure stability and predictability in the CO2 price, to lower the volatility σ of the CO2 price. Reducing the market uncertainty will lower the CO2 price investment thresholds for CCS, CCU and CCUS. Second, they should also commit to an increasing growth rate in the CO2 price in the EU ETS. When firms expect higher growth rates for the CO2 price in the future, they are more favourable to invest in CCS, CCU and CCUS sooner. Finally, policymakers should realize that CCU and CCS can be complementary solutions” (p. 32/33).

Climate-information matters: Complexity and Learning Effects in Voluntary Climate Action: Evidence from a Field Experiment by Johannes Jarke-Neuert, Grischa Perino, Daniela Flörchinger, and Manuel Frondel as of April 16th, 2023 (#26): “Exploiting the fact that timing matters, we have empirically investigated how individuals respond to (a) having the choice about the timing of their voluntary abatement efforts in the form of retiring an emission allowance and to (b) being confronted with either no, simple but counter-intuitive, or complex but intuitive information about the effectiveness-ranking of options. To this end, we have conceived a field experiment with more than four thousand participants that was embedded in a survey conducted in Germany in 2021 … Adding information did not systematically affect contributions overall, but substantially increased their effectiveness. … The uptake of information provided was most pronounced by individuals who most strongly believed in the opposite ranking“ (p. 15/16).

German pension wealth: Accounting for pension wealth, the missing rich and under-coverage: A comprehensive wealth distribution for Germany by Charlotte Bartels, Timm Bönke, Rick Glaubitz, Markus M. Grabka, and Carsten Schröder as of April 25th, 2023 (#13): “We found that including pension wealth increases the wealth-income ratio of German households from 570% to 850%. … pension wealth plays an equalizing role: The wealth share of the bottom 50% increases from 2% to 9% when including pension wealth, whereas that of the top 1% declines from 30% to 20%. However … Pension wealth is not transferable and, hence, differs significantly from marketable assets such as financial investments or housing“ (p. 12).

Responsible investment research: Finfluencers

Green and other bonds: Social, Sustainability, and Sustainability-Linked Bonds by Gino Beteta Vejarano and Laurens Swinkels from Robeco as of April 24th, 2023 (#107): “… several variations of sustainable bonds appearing in the market, where either use of proceeds are earmarked for sustainable activities, or coupon payments depend on sustainability targets. Despite the fast growth, the sustainable bond market is currently less than 4% of the overall bond market, with the green bond market accounting for half of it. Social and sustainability bonds tend to be issued by government or government-related institutions and, therefore generally have higher credit quality than sustainability-linked bonds, which are much more popular in the corporate sector. … The yields on sustainable bonds tend to be only marginally lower than those on conventional bonds with a similar risk profile …. Since correlations between returns on sustainable and conventional bonds are high, the risk and return profile of the portfolio is unlikely to change much when certain conventional bonds are replaced with ESG bonds with similar characteristics …” (p. 28).

Growing greenium? How Large is the Sovereign Greenium? by Sakai Ando, Chenxu Fu, Francisco Roch, and Ursula Wiriadinata as of April 19th, 2023 (#22): “This paper is the first empirical study to estimate the sovereign greenium using both the twin bonds issued by Denmark and Germany, and panel regression analysis. While the estimated greenium in this paper is not large, it has been increasing over time alongside the level of sovereign green bond issuances. … It remains an open question whether the purpose of the project associated with the green bond is a key determinant of the greenium, and whether green bonds have resulted in the climate outcomes they intended to achieve” (p.9/10).

Good diversity: Diversity, Equity, and Inclusion by Alex Edmans, Caroline Flammer, and Simon Glossner as of May 2nd, 2023 (#723): “… demographic diversity measures may miss many important aspects of DEI. … Companies with high DEI enjoyed recent strong financial performance and are less levered, suggesting that a strong financial position gives companies latitude to focus on long-term issues such as DEI that may take time to build. Small growth firms also exhibit higher DEI scores, consistent with either greater incentives or ability to improve DEI in such firms. … we find that the percentage of women in senior management is significantly positively associated with DEI perceptions, and this result holds regardless of the gender or ethnicity of the respondents. … DEI is also unrelated to general workplace policies and outcomes, suggesting that DEI needs to be improved by targeted rather than generic initiatives. … we find no evidence of a link between DEI and firm-level stock returns” (p. 25/26).

Impact measure: The Impact Potential Assessment Framework (IPAF) for financial products by Mickaël Mangot and Nicola Stefan Koch of the 2o investing initiative as of March 2023: The Impact Potential Assessment Framework (IPAF) assesses financial products based only on their actions to generate real-life impact … It is exclusively based on public information provided by the product manufacturers … It is applicable to various types of financial products … serves as a tool against impact-washing by displaying practical limitations of self-labelled “impact products … First, it assesses the (maximum) impact potential of financial products based on impact mechanisms they supposedly apply (in relation to communicated elements in marketing documents). Those impact mechanisms are the ones widely documented by academic research: Grow new/undersupplied markets, Provide flexible capital, Engage actively, Send (market and nonmarket) signals. Second, it evaluates the implementation of that impact potential based on the intensity with which financial products action the various impact mechanisms in connection to success factors documented by academic research”. My comment: I try to provide as much impact as possible with my public equity mutual fund, see

Green demand: Nachfrage nach grünen Finanzprodukten, Teilbericht der Wissensplattform Nachhaltige Finanzwirtschaft im Auftrag des Umweltbundesamtes von Christian Klein, Maurice Dumrose, Julia Eckert vom April 2023: “… In this project report, the development of the sustainable investment market, especially in the retail sector, is presented and the characteristics of sustainable investments are introduced. Retail investor motives for investing in such products and the requirements retail investors have for sustainable investment products are highlighted. Barriers for retail investors and investment advisors are identified in the area of sustainable investments. Finally, based on these findings, recommendations for political action are proposed, which can lead to a reduction of these barriers and thus increase the acceptance of sustainable investments” (abstract). .. “Die Literatur zeigt eindeutig, dass insbesondere die Fehlannahme der Anlageberatenden, Retail-Investierende hätten kein Interesse an Nachhaltigen Geldanlagen und fragen deshalb nicht aktiv im Beratungsgespräch nach diesen, eine Barriere darstellt. Die Untersuchung von Klein et al. zeigt in diesem Zusammenhang deutlich, dass diese Barriere durch eine verpflichtende Abfrage der Nachhaltigkeitspräferenz der Retail-Investierenden überwunden werden kann. Ferner zeigt der aktuelle Forschungsstand, dass insbesondere ein zu geringes Wissen im Bereich Nachhaltige Geldanlage die zentrale Barriere für Anlageberatende darstellt. Hohe Transaktions- sowie Informationskosten, ein fehlendes kundengerechtes nachhaltiges Produktangebot, Zweifel an dem Beitrag, den Nachhaltige Geldanlagen zu einer nachhaltigen Entwicklung leisten, hohe wahrgenommene Komplexität, Wahrnehmung von Green Washing, Angst vor Haftungsrisiken, potentielle Reputationsrisiken und keine einheitliche bzw. gesetzliche Definition des Begriffs Nachhaltige Geldanlage konnten als weitere Barrieren identifiziert werden“ (S. 42/43).

2 ESG types? Sustainable investments: One for the money, two for the show by Hans Degryse, Alberta Di Giuli, Naciye Sekerci, and Francesco Stradi as of April 26th, 2023 (#66): “Analyzing a representative sample of Dutch households, we document the existence of two types of households: those that invest in sustainable products for social reasons (social sustainable investors) and those that do it for financial reasons (financial sustainable investors). The two groups are of equal importance but are characterized by different features. The social sustainable investors have higher social preferences, level of education and trust, and are more likely left-wing and less risk-loving. Reliable labelling, reducing greenwashing concerns, and emphasizing typical left-wing thematic linked to sustainable investments is positively related to sustainable investments by social sustainable investors, whereas hyping the benefit in terms of returns of sustainable investments through social media and word of mouth is positively associated with the investment decisions of financial sustainable investors” (abstract).

Traditional and fintech investment research: Finflucencers

Difficult 1/n?: Is Naïve Asset Allocation Always Preferable? by Thomas Conlon, John Cotter, Iason Kynigakis, and Enrique Salvador as of April 28th, 2023 (#90): “For allocation within asset classes, we find only limited evidence of outperformance in terms of risk-adjusted returns for optimized portfolios relative to the naïve benchmark … we find statistical and economic evidence that a bond portfolio that minimizes risk is the only case that provides outperformance of the 1/n rule. This evidence points to challenges in outperforming the equally weighted portfolio, especially when allocating among equities and REITs. When allocating across asset classes, we find that minimum-variance portfolios that include bonds exhibit higher Sharpe ratios than the equally weighted portfolio. These findings also carry over to downside risk, where optimal strategies have a lower VaR, both economically and statistically, than that associated with the equally weighted approach. Allocations across different asset classes also have lower rebalancing requirements, which means they are less affected by the transaction costs” (p. 26). My comment: My equity portfolios are all equal weighted. The most passive world market portfolio should be uses as reference instead of naïve asset allocation which does not work well because auf unclear asset class definitions, see Das-Soehnholz-ESG-und-SDG-Portfoliobuch.pdf ( Regarding optimization limits see Kann institutionelles Investment Consulting digitalisiert werden? Beispiele. – Responsible Investment Research Blog (

Active disaster: How Can Active Stock Managers Improve Their Funds’ Performance? By Taking a Vacation—a Long One by Jeffrey Ptak from Morningstar as of May 2nd, 2023: “While active large-cap managers made thousands of trades worth trillions of dollars over the 10-year period ended March 31, 2023 … The funds’ actual returns were almost identical to what they’d have been had those managers made no trades at all and were worse after adjusting for risk. And that was before fees were deducted”. My comment: With my portfolios/fund I try to trade as little as possible

Wealthtech changes: The Kitces AdvisorTech Map Highlights The Evolving Landscape As It Turns 5 Years Old by Michael Kitces and ben Henry-Moreland as of May 1st, 2023: “… there now 409 different software solutions …  with the total number of solutions more than doubling … Some highlights of these AdvisorTech evolution trends over the past 5 years include: The near-disappearance of the ‚B2B robo‘ tools as advisors demanded better onboarding capabilities but showed an unwillingness to pay for them on top of their broker-dealer or custodial providers … portfolio management tools have increasingly bought or built performance reporting and performance reporters acquired most of the available trading and rebalancing tools in a massive consolidation into what is now the „All-In-One“ category … The growth of the Behavioral Assessments category … The proliferation of specialized financial planning software …The explosion in advisor marketing technology …”

Bad influences: Finfluencers by Ali Kakhbod, Seyed Kazempour, Dmitry Livdan, and Norman Schürhoff as of May 4th, 2023 (#178): “… instead of following more skilled influencers, social media users follow unskilled and antiskilled finfluencers, which we define as finfluencers whose tweets generate negative alpha. Antiskilled finfluencers ride return and social sentiment momentum, which coincide with the behavioral biases of retail investors who trade on antiskilled finfluencers’ flawed advice. These results are consistent with homophily in behavioral traits between social media users and finfluencers shaping finfluencer’s follower networks and limiting competition among finfluencers, resulting in the survival of un- and antiskilled finfluencers despite the fact that they do not provide valuable investment advice. Investing contrarian to the tweets by antiskilled finfluencers yields abnormal out-of-sample returns, which we term the “wisdom of the antiskilled crowd.”“ (p. 40).

Literacy returns: Financial literacy and well-being: The returns to financial literacy by Sjuul Derkx, Bart Frijns, and Frank Hubers as of April 25th, 2023 (#21): “Using a panel data set of Dutch households over 2011-2020, we find that initial (2011) … financial literacy positively affects wealth accumulation for up to four years into the future, showing that there is mean-reversion in financial literacy when one no longer invests in it. Considering different age brackets, we document that financial literacy among the young results in higher income generation, while financial literacy among the old leads to greater wealth accumulation” (abstract).


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Unsustainable Bonds: Naturbild von Andres Dressler zur Illustration

Unsustainable bonds? Researchposting 102

Unsustainable bonds? 20x new research on climate risk, real estate, health, Trump, carbon credits, CDS, bank loans, bonds, interest rates, ESG indexing, pensions, gender, infrastructure, private equity, investment apps, ESG fintechs, climate AI by Roland Fuess, Tabea Bucher-Koenen, Paul Pudschedl, Markus Leippold et al.

Social and Ecological Research: Unsustainable bonds?

Longer hot: 800,000 Years of Climate Risk by Tobias Adrian, Nina Boyarchenko, Domenico Giannone,  Ananthakrishnan Prasad, Dulani Seneviratne, and Yanzhe Xiao as of September 9th, 2022 (#22): “… we study how climate evolves over the past 800,000 years … We find that the temperature-CO2 dynamics are non-linear, so that large deviations in either temperature or CO2 concentrations take a long time to correct … even conditional on the net-zero 2050 scenario, there remains a significant risk of elevated temperatures for at least a further five millennia” (p. 26/27).

Reduce green incentives? The Low-Carbon Rent Premium of Residential Buildings by Angelika Brändle, Roland Füss, Jörg Schläpfer, and Alois Weigand as of September 22nd, 2022 (#53): “The operation of residential real estate accounts for a large part of worldwide greenhouse gas emissions …. we analyze 39,791 rental contracts from 2,438 residential properties in the Switzerland … our results suggest that apartments in low-carbon buildings have higher net rents compared to dwellings which emit more carbon emissions. … the higher willingness-to-pay for low-carbon housing is not decisively driven by a tenant’s higher preference for living in an environmentally-friendly apartment. … based on capitalization rates from 432 transactions, we suggest that the market value is on average higher for carbon neutral apartment properties due to lower expected risk premiums. … incentive structures for sustainable housing have to be carefully evaluated by policy makers as higher market values of low-carbon buildings compensate investors for cutting CO2 emissions” (p. 17/18).

Advert for German investors: “Sponsor” my free research e.g. by buying my Article 9 fund. The minimum investment is around EUR 50. 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.

For my approach to this blog see 100 research blogposts since 2018 – Responsible Investment Research Blog (

For more current research please go to page 2 (# indicates the number of SSRN downloads on November 1st):

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

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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

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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.

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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?

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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.

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