Green safety illustration by succo from Pixabay
6x new research on the 9-Euro leisure-ticket, brown CEOs, Islamic and SRI investing, green safety for employees, strategic shareholder voting, and 1/N versus Markowitz (# shows SSRN full paper downloads as of August 15th, 2024).
Social and ecological research
Leisure subsidy: Almost Fare Free: Impact of a Cheap Public Transport Ticket on Mobility Patterns and Infrastructure Quality by Mario Liebensteiner, Jakob Losert, Sarah Necker, Florian Neumeier, Jörg Paetzold, and Sebastian Wichert as of Aug. 12th, 2024 (#9): “The 9-Euro Ticket, an almost fare-free public transport ticket, was introduced in Germany in 2022. … Our main findings are that the 9-Euro Ticket led to a substantial increase in train trips, but only to a very modest reduction in car traffic. Our findings suggest that the 9-Euro Ticket primarily encouraged people to travel more, mainly for leisure-related purposes … We find a substantial increase in train delays in response to the 9-Euro Ticket …” (p. 30/31).
Brown CEOs: Corporate Climate Policy and CEO Age: Age Matters by Nick Barter and Akihiro Omura as of March 21st, 2024 (#46): “… the older the CEO the less likely the company is to have climate reduction targets and policies. … a negative relationship between CEO age and the corporate emissions policy and or target can be moderated by the presence of younger chairperson and or second most influential executives“ (p. 20).
ESG investment research (in: Green safety)
Faith beets SRI: The Power of Religion: Islamic Investing in the Lab by Sheheryar Banuri, Milena Murgia, and Imtiaz Ul Haq as of March 16th, 2024 (#14): “Faith-based mutual funds have recently become a growing corner of the mutual fund industry. Morality and ethics are thought to exert an influence on investors’ decisions in this segment, though their role in driving such investments is not clear as these funds are also attractive due to their distinct risk-return profile. … We show that those with stronger religious preferences are more likely to stick with their investment in Islamic funds when these funds underperform. We do not find that social preferences play a similar role in socially responsible funds, and we find that investors prefer religious investments over socially responsible investments …“ (abstract). My comment: It would be interesting to compare religious investing with impact investing. I expect a similar “stickiness” of impact and religious investors (here is my recent post on impact investing: Impactfonds im Nachhaltigkeitsvergleich)
Impact investing research
Green safety: Are Green Firms Safer Places to Work? by Yiwei Li, Dragon Yongjun, Sarah Qian Wang and Yupu Zhang as of Aug. 14th, 2024 (#10): “Based on the establishment-level workplace injuries data … from 2002 to 2011 …, we find that corporate environmental performance is negatively associated with workplace injury rates, suggesting that firms with better environmental performance are also safer places to work in. … Additional analyses suggest that the negative relationship is more pronounced in firms with high litigation risk and those value respect, integrity, innovation, and teamwork. We further find that green firms invest more in SG&A (Sö: Selling, General and Administration) which includes expenses on workplace safety. In addition to workplace safety, we find that employees have higher level of satisfaction in green firms“ (p. 28). My comment: Here is some more research and engagement proposals regarding HR topics: HR-ESG shareholder engagement: Opinion-Post #210
Complex voting model: Making sure your vote does not count: Green activism and strategic proxy voting by Dunhong Jin and Thomas Noe as of Aug. 12th, 2024 (#7): “In this paper, we modeled universal owners’ voting strategies in response to green activists’ proxy proposals. We showed that any firm value reductions produced by proposals aimed at producing positive collateral environmental benefits are impounded into the price of acquired shares and thus are not internalized by activists. … Strategic universal owners face a tradeoff when voting on green proxy proposals: the reputation costs of opposing vs. the adverse value consequences of proposal success. … because of strategic voting, the outcomes of proxy voting mechanisms do not reflect the aggregate preferences of the pivotal shareholders, the universal owners“ (p. 39). My comment: Why do so many “green” proposals are not adopted or seem to be rather very light than dark geen?
Other investment research (in: Green safety)
Naïve or Markowitz? Markowitz versus 1/N: How Sensitive Is Mean-Variance Portfolio Performance to Estimation Errors? by Wing Cheung as of July 17th, 2024 (#25): “This paper resolves the long-standing ‘mean-variance (MV) vs equal-weighting (1/N)’ relative performance debate, which is crucial to the foundation of Markowitz portfolio theory (MPT). … Assessing MV performance sensitivity to estimation errors specifies when errors make MPT suboptimal and when investor subjectivity can significantly outperform MV“ (abstract). My comment: I use 1/N for direct equity portfolios see Das-Soehnholz-ESG-und-SDG-Portfoliobuch
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