Green engagement: 15x new research on greenwashing, carbon pricing, carbon financing, carbon taxes, biodiversity tools, sovereign spreads, supply chain AI,ESG shorting, AI activism, impact measurement, biodiversity risks, impact market, bond ETFs, and FOMO (#shows SSRN full paper downloads as of May 1st, 2025)
Social and ecological research
Problematic climate information: Climate Pledges and Green-washing: Information Provision Does Not Work by Vittoria Battocletti, Alfredo Desiato, Alessandro Romano, Chiara Sotis, and Tobias H. Tröger as of April 28th, 2025 (#16): “… First, we show that while people are not aware of the meaning of the most common climate pledges, they are willing to pay a considerable premium for these claims …. Second, we observe that information provision does not affect respondents when making consequential choices on how much to pay for gift cards of firms that have made a climate pledge. Third, we find that in a realistic setting where respondents receive multiple pieces of information about various products, information regarding climate pledges attracts significant attention. However, it does not improve understanding of climate pledges and actually increases recipients’ confusion“ (abstract).
Carbon pricing: Exploring the Social Cost of Carbon for Internal Carbon Pricing: Insights from a Technology Probe by Ando Shah, Zoya Abdullah, and John Chuang as of April 24th, 2025 (#20): “Internal carbon pricing (ICP) can be a powerful means of reducing greenhouse gas emissions for organizations. However, current carbon pricing is well below optimal levels as described by the Social Cost of Carbon (SCC). … We discover that framing the SCC purely as a function of the discount rate makes it a robust indicator of climate responsibility at an organizational level. … Introducing SCC as a significant metric in cross cutting reporting frameworks may promote its widespread adoption as an unbiased measure of organizational commitment, and spur organizational climate action that go beyond token gestures or mere lip service“ (abstract).
Brown offshore risks: Out of the light, into the dark: how ‘shadow carbon financing’ hampers the green transition and increases climate-related systemic risk Simon Schairer, Jan Fichtner, Riccardo Baioni, David Castro, Nicolás Aguila, Janina Urban, Paula Haufe and Joscha Wullweber as of April 15th, 2025 (#140): “… offshore finance enables the obfuscation of financial flows, while shadow banking facilitates alternative financing to high carbon-emitting firms. Drawing on qualitative expert interviews and financial market data, the paper explains how the offshore-shadow-banking nexus hampers the green transition by introducing the concept of ‘shadow carbon financing’, which can operate through the following channels: (1) loan securitization, (2) emissions risk transfers, (3) bond financing, (4) carbon asset partitioning, (5) offshore corporate wealth chains, (6) private credit, and (7) proved developed producing reserves securitization. We demonstrate several instances of financial flows moving away from regulated and transparent forms of financing to less regulated and more opaque shadow carbon financing channels. Consequently, we argue that shadow carbon financing may also pose substantial systemic risk, as climate-related risks (e.g., stranded assets) increasingly accumulate in less regulated parts of the financial system“ (abstract).
Good taxes? Cross-border carbon taxes and shareholder wealth by Marta Alonso, Martin Jacob, Gaizka Ormazabal, and Robert A. Raney as of Dec. 16th, 2024 (#261): “… we analyze stock price reactions to news about the introduction of the Carbon Border Adjustment Mechanism (CBAM) in the EU. We find that stock prices of EU importers of CBAM products respond more negatively to the announcement of the CBAM than those of similar non-European firms. The results from cross-sectional tests support the interpretation that the documented patterns reflect EU firms’ limited ability to pass on the tax cost in commercial relations with non-EU counterparts. Collectively, our results shed doubt on the ability of cross border carbon taxes to level the playing field between local and foreign firms” (abstract).
Biodiversity tools: Bridging business and biodiversity: An analysis of biodiversity assessment tools by Andreas Barth, Lea Ranacher, Franziska Hesser, Tobias Stern, and Kurt Christian Schuster as of June 2025: “This paper analyses 45 biodiversity assessment tools, proposed by the Science Based Targets Network (SBTN), that can be used by companies … we identified six main groups: software and web applications for biodiversity assessment, Life Cycle Assessment (LCA) tools, Multi-Regional Input-Output (MRIO) analysis tools, Geographic Information System (GIS)-based tools, index calculation methods and biodiversity related data repositories. Furthermore, the biodiversity related indicators in the tools differ greatly by scope, data and evaluation method …“ (abstract).
ESG investment research (in: Green engagement)
Emerging ESG importance: Do ESG Considerations Matter for Emerging Market Sovereign Spreads? by Carmen Avila-Yiptong, Mahamoud Islam, Ayah El Said and Chima Simpson-Bell from the International Monetary Fund as of April 24th, 2025 (#18): “This paper aims to investigate the determinants of sovereign spreads for a panel of 79 emerging markets and development economies (EMDEs) over the period 2001-2021, … our results show that improvements in ESG factors tend to reduce sovereign spreads, alongside domestic variables capturing growth, fiscal and external balances, and global factors such as U.S. interest rates and changes in global risk sentiment. In particular, we find that governance is a key factor in explaining movements in sovereign spreads, … Social and environmental aspects, proxied by population purchasing power and greenhouse gas emissions, respectively, also play significant roles …“ (abstract).
Supply chain AI: The Evolution of Artificial Intelligence in Supply Chain Due Diligence: A Systematic Literature Review and Framework Development by Marcel Welsen and Łukasz Sułkowski as of April 24th, 2025 (#10): “… The findings demonstrate that AI not only improve the ESG compliance verification and monitoring capabilities, but it also revealed key challenges, such as data quality issues, algorithmic bias, cross-border regulatory difficulties, and cultural adaptation requirements. Critical research gaps that were identified are: limited integration between technological and ethical dimensions, insufficient attention to cultural factors, absence of comprehensive ethical frameworks, lack of empirical studies, and inadequate regulatory alignment examination. The theoretical contributions provided by this research is the development of a framework and practical implication advices for stakeholders“ (abstract). My comment on supply chain stakeholder engagement see Supplier engagement – Opinion post #211
ESG shorting: Betting Against ESG Sinners: Evidence From Short Selling Around the World by Tsuyoshi Iwata, Tomasz Orpiszewski, and Mark Thompson as of April 24th,2025 (#11): “… the study employs propensity score matching to examine abnormal stock returns, short interest changes, and stock borrowing rate changes around ESG negative events. The analysis shows consistent stock market drops from a day before to the event date, with varying durations of price drops both pre- and post-event and incoherent evidence of short sellers’ activity across regions. … In the backtesting analysis, the study tests ESG-negative-event-driven shorting strategies constructed based on the observation of the market behavior around ESG negative events, finding potential alpha opportunities in 17 out of 18 strategies after considering borrowing costs, though statistical significance is only observed in 6 strategies” (p. 19).
Impact investment research
Green engagement: Engagement Report Statements, Votes, Dialogues: The SfC – Shareholders for Change network’s activities in 2024 as of Feb. 27th, 2025: “Our 20 members engaged with 172 companies and one institution across … One of the key themes of 2024, as in previous years, was our focus on “orphan issues”—topics that are insufficiently addressed in mainstream investor engagement. Our network addressed issues such as ’energy poverty’ in Spain or the investment in nuclear weapons by financial institutions. We have engaged not only listed companies, but also unlisted, small companies, as well as asset managers and ESG rating agencies. And we haven’t been afraid to engage with institutions such as the European Commission, where we are fighting to keep weapons out of the definition of sustainable investment …“ (p. 3). My comment: My engagement report is based on the SfC systematic, see FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T
AI Activism: Between Promise and Power: Artificial Intelligence, Shareholder Activism, and the Corporate Governance of the Next Generation by Pierluigi Matera as of April 16th, 2025 (#338): “… AI tools can be used to surface resonant causes and craft precise, data-enhanced proposals that rally dispersed shareholders around a common normative objective. …However, empirical data from the 2022–2024 proxy seasons suggest that AI’s democratizing promise remains largely aspirational. Benefits continue to accrue disproportionately to large, well-capitalized actors, while smaller investors face persistent structural and behavioral barriers. … while AI tools could help insurgents spot vulnerabilities to leverage in identity-driven campaigns, they are increasingly used by corporations to anticipate activist efforts and shield incumbent management” (abstract). My comment see KI kann börsennotierte Impactinvestments ermöglichen | CAPinside
Impact measurement: In Plain Sight: Mechanisms of means–ends decoupling in impact investing by Lauren Kaufmann, Gorgi Krlev, and Maoz (Michael) Brown as of April 29th, 2025 (#8): “.. it is an “open secret” that because of inconsistencies and fragmentation in the applied means of impact measurement, ends are imperfectly met. In this article, we probe how and why means–ends decoupling occurs in impact investing in plain sight. We apply a qualitative and interpretative approach, drawing on 135 interviews and 102 documents gathered from impact investors. We find that impact measurement is not primarily used for performance management but plays a relational role between stakeholders. We uncover and conceptualize three mechanisms that drive decoupling between the ideal and actual functions of impact measurement, namely impact measurement as: (1) communication, (2) categorization, and (3) construction of the domain. We also find an important contingency: decoupling becomes more likely with increasing systemic opacity in an investment field” (abstract).
Compensation biodiversity risks: Biodiversity at Risk: How Managerial Myopia and Incentives Shape UK Corporate Environmental Strategies by Yueyang Wang, Lanxin Lei, Zixiao Xing, Brian Lucey, Yizhi Wang as of April 24th, 2025 (#63): “This study examines how managerial myopia—the focus on short-term financial results—affects corporate biodiversity management, using data from UK-listed firms (2000–2023). The findings show that short-term-oriented managers underinvest in biodiversity initiatives, increasing ecological and financial risks. Salary-based incentives tied to short-term earnings amplify this effect, while greater board national diversity mitigates it by promoting long-term ecological strategies” (abstract).
Impact potential: Impact Investment Anlegerstudie Deutschland 2025 von Christian Klein von der Universität Kassel vom 29.4.2025: „Unsere repräsentative Befragung von 2.103 privaten Anlegern in Deutschland macht deutlich: Das Interesse an solchen Investments ist groß – das Wissen darüber jedoch gering. Nur 14 % der Befragten hatten vor der Befragung überhaupt schon einmal von Impact Investments gehört. Mehr als die Hälfte dieser Teilgruppe gab jedoch an, bereits in entsprechende Produkte investiert zu haben … Auch unter den Befragten, die erstmals im Rahmen der Studie mit dem Begriff in Berührung kamen, stößt die Idee auf Interesse: 34 % können sich vorstellen, in Zukunft in Impact-Produkte zu investieren“ (S. 3).
Other investment research (in: Green engagement)
Bond ETF risks: Same Same But Different: The Risk Profile of Corporate Bond ETFs by Johannes Dinger, Marcel Müller, and Aleksandra Rzeźnik as of April 28th, 2025 (#55): “We show that, while corporate bond ETFs systematically exhibit lower liquidity risk than the bonds they hold, they also face heightened intermediary risk. This effect is more pronounced for high-yield ETFs, for those with less liquid portfolios, and for funds reliant on weaker Authorized Participants …“ (abstract).
FoMo facets: FoMO in Investment: A Critical Literature Review of Fear of Missing Out in Investment by Ayse Beyza Nirun and Malik Asgarli as of April 2nd, 2025 (#92): “Fear of missing out (FoMO) is a psychological phenomenon … In our taxonomy, we identify and discuss six dimensions of FoMO: measures, effects, investor responses, psychological drivers, mitigation strategies, contextual influences of FoMO” (abstract).
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Werbung (in: Green engagement)
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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 (siehe auch My fund).
Zum Vergleich: Ein traditioneller globaler Small-Cap-ETF hat eine SDG-Umsatzvereinbarkeit von 5 %, ein diversifizierter Gesundheits-ETF 13 %, Artikel 9 Fonds 21%, liquide Impactfonds 39% und ein ETF für erneuerbare Energien 42 % (vgl. Hohe SDG Umsätze? Nur wenige Investmentfonds!).
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.
Ein Fondsinvestment war also bisher ein „Free Lunch“ in Bezug auf Nachhaltigkeit: Ein besonders konsequent nachhaltiges Portfolio mit marktüblichen Renditen und (eher niedrigeren) Risiken. Vergangene Performance ist allerdings kein guter Indikator für künftige Performance.