13x new research on green kids, green poor, attractive purpose, biodiversity data, biodiversity flows, ESG rating cost, green audits, sustainable women, effective engagement, DEI losses, DACH impact market, and the Yale asset allocation
Clever green investors: 13x new research on green kids, green poor, attractive purpose, biodiversity data, biodiversity flows, ESG rating cost, green audits, sustainable women, effective engagement, DEI losses, DACH impact market, and the Yale asset allocation (#shows the number of SSRN full paper downloads as of June 26th)
Social and ecological research
Green kids: Is Less Really More? Comparing the Climate and Productivity Impacts of a Shrinking Population by Mark Budolfson, Michael Geruso, Kevin J. Kuruc, Dean Spears, and Sangita Vyas as of June 24th, 2025 (#12): “A smaller human population would emit less carbon, other things equal, but how large is the effect? … We contrast a baseline of global depopulation (the most likely future) with a counterfactual in which the world population continues to grow for two more centuries. Although the two population paths differ by billions of people in 2200, we find that the implied temperatures would differ by less than one tenth of a degree C—far too small to impact climate goals. Timing drives the result. … Fertility shifts take generations to meaningfully change population size, by which time per capita emissions are projected to have significantly declined, even under pessimistic policy assumptions. Meanwhile, a smaller population slows the non-rival innovation that powers improvements in long-run productivity and living standards, an effect we estimate to be quantitatively important. … Humans cause greenhouse gas emissions, but human depopulation, starting in a few decades, will not meet today’s climate challenges“ (abstract).
Green poor: Distributional Consequences of Becoming Climate-Neutral by Philipp Hochmuth, Per Krusell, and Kurt Mitman as of April 23rd, 2025 (#35): “… We represent the EU policy in terms of a tax on fossil fuel and show that the European Commission’s Fit-for-55 package implies a 168% tax on the fossil-based technology. The output losses from this tax are substantial, and GDP is 9.3% lower in the new steady state. The burden falls primarily on the poor agent who is 50% more worse off than the rich agent. The output losses can be compensated for if the economy achieves a 1.49% annual increase in energy efficiency as outlined in the Fit-for-55 package“ (abstract). My comment: Becoming greener without being social is not enough
Attractive purpose: Purpose (doesn’t) pay paychecks: sustainability signaling in the market for entrepreneurial labor by Paul P. Momtaz and Cristiano Bellavitis as of June 18th, 2025 (#19): “… we quantify the strength of environmental, social, and governance (ESG) signals from the labor demand (entrepreneurial firms) and supply (entrepreneurial talent) sides. … ESG signaling increases the probability of candidates responding to companies’ first email contact, even in cases where it is ex-ante clear that the company will not meet the candidates’ desired wage levels. However, … companies’ ESG commitments do not compensate for lower-than-desired wage levels during bargaining, suggesting that purpose does not pay paychecks” (abstract).
ESG investment research (in: Clever green investors)
Biodiversity data: Characteristics of global datasets used to support biodiversity conservation action and policy by Guy Copperthwaite, M.J. O’Connell, R. Berry, Kenneth D Lynch, and R. Bennett as of May 2nd, 2025 (#16): “… This paper reports on an evaluation of the characteristics of 336 open source global datasets … 37% provided information that was more than five years out of date. Nearly a fifth of all datasets (18%) provided only a ‘snap-shot’ information i.e. data that were not longitudinal, and trend analysis was not possible for 22% of datasets. Only 5% of the collated datasets provided information about future potential ‘state’, and 29% had missing data (i.e. with one or more countries not providing information). In terms of the readiness for immediate use of the data, 11% of the datasets required some form of post-access management ….” (abstract).
Biodiversity flows: Financing Nature: Investment Funds and Biodiversity Risks by Daniel Marcel te Kaat and Alexander Raabe as of May 9th, 2025 (#88): “… Using monthly data on investment fund portfolios, we show that the 2021 Kunming Declaration led fund managers to reallocate portfolios from high-biodiversity risk countries to less risky ones, while ultimate fund investors remained unresponsive. … we demonstrate that countries taking more legal acts are partially shielded from funds reducing their exposure to high-biodiversity risk countries. Policies only indirectly related to nature conservation, such as mitigating climate change and strengthening macroeconomic fundamentals, do not provide insurance against funds’ withdrawals …” (abstract).
ESG rating costs: Who should pay for ESG ratings? by Stefano Lovo and Jacques Olivier as of Feb. 22nd, 2025 (#149): “… Our model can explain why credit ratings are quasi-exclusively paid by issuers while a majority of ESG ratings are sold to investors. A prediction of our model is that as ESG issues become more prevalent among investors and as technological progress reduces the status quo level of expected emissions, “issuer pays” will become a more prevalent mode of payment of ESG ratings. Another prediction is that the ESG RA (Sö: Rating agency) business model is related to the fraction of investors intrinsically valuing firms’ ESG performance: the bigger this fraction, the more RAs will opt for issuer pay. The normative implications of this shift are nuanced. On the one hand, widespread adoption of “issuer pays” ESG ratings are likely to raise the incentives of firms to invest in emissions abatement. On the other hand, better information about ESG risk does not mechanically translate into higher utility, even for SR investors (Sö: socially responsible)“ (p. 33).
Green audits: Big 4 auditors and climate risk by Hafiz Hoque an Saadia Irfan as of May 19th, 2025 (#18): “We document a strong negative association between climate risk and the Big 4, confirming the perceived benefits of having Big 4 auditors…. We find that the Big 4’s negative relationship with climate risk is mediated through increased audit effort, increased advisory services and the industry expertise of the Big 4. These findings further strengthen our argument that Big 4 help in reducing climate risk. … We find that weak internal control environment, asymmetric information and regulation are three potential channels through which the Big 4 effect takes place …“ (p.30/31).
Clever green investors: Sustainable finance literacy predicts investment behavior beyond general financial literacy: Evidence from two representative samples by Marcel Seifert, Stefan Palan, Aja Ropret Homar, Florian Spitzer, Erich Kirchler, and Katharina Gangl as of April 21st, 2025 (#66): “Sustainable finance literacy (SFL) …In two large-scale studies with representative Austrian samples … Individuals with higher SFL made greater sustainable and non sustainable stock market investments, and were more adept at identifying and avoiding potentially greenwashed products. Furthermore, SFL demonstrated more explanatory power than did general financial literacy, for both experienced investors and non-investors” (abstract).
Sustainable women: From Values to Action: Gender, Barriers, and the Attitude–Behaviour Gap in Sustainable Investing by Anna Sörensson, Navid Ghannad, and Ulrich Schmudde as of April 22nd, 2025 (#40): “… Drawing on a survey of Swedish private investors, the research investigates how men and women prioritise environmental, social, and economic sustainability in portfolio construction … The findings reveal that women are more likely than men to both value and act on sustainability criteria, demonstrating greater behavioural coherence and ethical salience in their investment choices. In contrast, men more frequently prioritise financial performance and exhibit a wider attitude–behaviour gap. Informational complexity, scepticism about investor impact, and motivational disengagement were the most commonly cited barriers, with 18% of respondents noting that ESG research is too time-consuming, and 19% stating they do not consider sustainability relevant when investing. Regression analysis indicates that gender is a significant predictor of sustainable investment behaviour, while income level is not …“ (abstract).
SDG and impact investment research
Effective engagement: Governance & Governments: The Effects of Shareholder Engagement and Climate Laws on Firm CO2 Emissions by Kevin Chuah, Kenneth Chung, and Witold J. Henisz as of June 13th, 2025 (#107): “We examine the combined effects of shareholder engagement—supported by the Climate Action 100+ (CA100+) initiative—and governmental climate regulation on firms’ carbon emissions intensity. … we find that these two forms of pressure are complementary, with firms facing both shareholder engagement and climate regulation reducing their subsequent emissions intensity on average …. Furthermore, we test and find supportive evidence for spillover effects arising from board ties between firms engaged by CA100+ and connected non-engaged firms, which are likewise reinforced by the prevalence of government climate regulatory pressures” (abstract). My comment: Unfortunately, a (relative) emissions intensity reduction is not the same as a reuction of absolute emissions.
DEI losses: The Limited Corporate Response to DEI Controversies by David F. Larcker, Charles G. McClure, Shawn X. Shi, and Edward M. Watts as of June 23rd, 2025 (#41): “Firms diversity, equity, and inclusion (DEI) policies have received significant scrutiny in recent years …We find that in the wake of DEI controversies, firms shift their hiring practices toward recruiting diverse employees to presumably improve public perception of their DEI profiles. However, these effects are economically small and largely superficial. Despite these limited firm responses, we find these controversies have important negative stock price implications, which are largely offset when firms make more meaningful DEI investments” (abstract).
DACH impact market: Auszüge aus dem Marktbericht Nachhaltige Geldanlagen 2025 vom Forum Nachhaltige Geldanlagen (FNG) vom Juni 2025: „Die Kategorisierung der erfassten Publikumsfonds in Deutschland nach der OffVO ist im Vergleich zum Vorjahr weitgehend konstant geblieben. Derzeit sind 5 Prozent als Artikel-9-Fonds eingestuft“ (S. 12). … „Die Auswertung der Eurosif-Fragen zeigt – wie in Grafik 4.8 dargestellt – Schwerpunkte bei „Basic ESG“ mit 39,9 Prozent und bei Impact-Generating mit 38 Prozent. Lediglich 4,9 Prozent sind dem Ambitionsniveau „Advanced ESG“ zuzuordnen. Zudem werden 17,2 Prozent der Produkte als Impact-Aligned klassifiziert“ (S. 15). …“fast ein Viertel der Teilnehmenden (Sö: nennen) ökologische und soziale Wirkung als wesentlichen Grund für eine nachhaltige Geldanlage“ (S. 27). … „Auf die Frage, ob die Nachfrage nach Finanzprodukten, die explizit soziale Themen in den Fokus stellen, als hoch eingeschätzt wird, antworteten 79 Prozent der Teilnehmenden, dass die Nachfrage eher gering sei“ (S. 28). Mein Kommentar: Es fehlt weiterhin die Kategorie Best-in-Universe, aber es würden sich wohl zu wenige Angebote mit dieser konsequenten ESG-Umsetzung finden. Der hohe Anteil von Impact-Fonds überrascht und deutet auf eine weite Auslegung von Impact hin.
Other investment research
Yale allocation: Can We All Invest Like Yale? by Meb Faber as of May 28th, 2025 (#50): “… we examine the historical performance of the Yale model and explore how its alternative-heavy approach has fared over time. We find that while Yale’s unique access and illiquid exposures helped it outperform in past decades, much of its success stems from disciplined asset allocation and valuation-sensitive investing—both achievable by retail investors. Using simple models, we show how average investors can adopt similar principles without needing a team of Ivy League endowment managers or complex alternative assets“ (abstract). My comment: The 60/40 allocation or – not tested here – the most passive world market allocation did a very good job for most investors since the Global Financial Crisis in 2008. My comment see So können Kleinanleger wie die Profis investieren | CAPinside
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Werbung (in: Clever green investors)
Unterstützen Sie meinen Researchblog, indem Sie in den von mir beratenen globalen Small-/Mid-Cap-Investmentfonds FutureVest Equity Sustainable Development Goals R investieren und/oder ihn empfehlen.
Der Fonds konzentriert sich auf die UN-Ziele für nachhaltige Entwicklung mit durchschnittlich einzigartig hohen 99% SDG-vereinbaren Umsätzen der Portfoliounternehmen und sehr hohen E-, S- und G-Best-in-Universe-Scores sowie einem besonders umfangreichen Aktionärsengagement.
Zum Vergleich: Ein traditioneller globaler Small-Cap-ETF hat eine SDG-Umsatzvereinbarkeit von etwa 5 %, ein diversifizierter Gesundheits-ETF 13 %, Artikel 9 Fonds circa 20%, liquide Impactfonds oder ein ETF für erneuerbare Energien ungefähr 40 % (vgl. Maximale Portfolio-Nachhaltigkeit: Was geht?).
Insgesamt hat der von mir beratene Fonds seit der Auflage im August 2021 eine ähnliche Performance wie traditionelle globale Small- und Mid-Cap-Fonds (vgl. z.B. Fonds-Portfolio: Mein Fonds | CAPinside). Mein besonders nachhaltiger Fonds war also bisher ein Nachhaltigkeits „Free Lunch“. Vergangene Performance ist allerdings kein guter Indikator für künftige Performance.
