Impact confusion: 14x new research on longevity, children, weather, CO2, NGOs, ESG ratings, water investments, impact and biodiversity measurement, investor cooperation, passive influence, bank lending and private equity
Zusammenfassung
Impact confusion: 14x new research on longevity, children, weather, CO2, NGOs, ESG ratings, water investments, impact and biodiversity measurement, investor cooperation, passive influence, bank lending and private equity
Impact confusion: 14x new research on longevity, children, weather, CO2, NGOs, ESG ratings, water investments, impact and biodiversity measurement, investor cooperation, passive influence, bank lending and private equity (# shows the number of SSRN full paper downloads as of July 25th, 2025)
Social and ecological research
Longevity returns: Economic Valuation of Longevity Technologies: Cost-Benefit Analysis and Market Assessment of Life Extension Investments by David M. Dror as of June 20th, 2025 (#28): “… we evaluate the economic efficiency of major longevity intervention categories including cellular reprogramming, senolytics, AI-driven therapeutics, and digital health platforms. Our analysis reveals significant economic benefits from longevity investments, with healthcare cost savings substantially exceeding development costs for most intervention categories. Preventing age-related diseases like Alzheimer’s could generate $367 billion in savings by 2050 in the US alone, while extended working lifespans could add $5.7 trillion to the economy over three decades. The global longevity market, valued at $58.5 billion in 2020, projects growth to $432.8 billion by 2026, representing 6.5% annual growth driven by demographic pressures and technological advancement …” (abstract).
Child health: The Climate Crisis, Climate Anxiety and Children’s Rights: A Psychological Perspective on Human Health and Security by Michelle Cowley-Cunningham, Alexis Carey and Elaine Rogers as of Oct. 15th, 2024 (#28): “The climate crisis affects children’s well-being … we highlight how environmental degradation and children’s awareness of climate change present an important linkage to children’s mental health. … We detail how interventions mindful of children’s educational and participatory capacity offer the potential to moderate effects of climate anxiety. We discuss limitations of the term ‘climate anxiety’ for describing the experience of children from the Global South …” (abstract).
Extreme costs: The Return of Adaptation to Extreme Weather by Harrison Hong, Serena Ng, and Jiangmin Xu as of May 27th, 2025 (#56): “We estimate the return of climate adaptation by modeling the uncertain impact of global warming for extreme weather. Unexpected arrivals elevate extreme-weather risk, which leads households and firms to adapt and thereby lowering the damage of each subsequent arrival. … Applying our approach to cyclones and heatwaves from 1980-2019, average country income in 2019 is several percent lower absent state-dependent adaptation. Adaptation becomes significantly more valuable in the long run …”.
Brown permits: Carbon Permit Holdings by Maximilian Fuchs as of June 3rd, 2025 (#120): “… I construct a novel dataset of firm-level holdings of emission permits in the EU Emission Trading System. Emission permits take a sizable share on firms’ balance sheets and a majority of firms hold large quantities of emission permits in excess of their emission levels. I find evidence that holders of excess permits retain permit holdings to hedge future shocks to carbon prices. Firms with excess holdings (1) trade less, (2) sell more permits when carbon price uncertainty is low, and (3) show smaller reductions in future emissions. These results … provide empirical evidence that carbon price uncertainty leads to limited trading participation and excess cost of decarbonization” (abstract).
NGO campaign timing: NGO Activism: Exposure vs. Influence by Michele Fioretti, Victor Saint-Jean, and Simon C. Smith as of May 29th, 2025 (#7): “… Data from 2,500 campaigns show that NGOs are six times more likely to launch campaigns on their target’s Annual General Meeting (AGM) date. Although this strategy increases media exposure and stakeholder scrutiny, resulting in consumer backlash and related shareholder proposals at the following AGM of the targeted firm, it has no impact on current AGM votes. As NGOs build reputational capital, they adjust their timing to influence AGM votes …“ (abstract).
ESG investment research (in: Impact confusion)
ESG divergences: Green Fees: Sustainability Impacts on Portfolio Management by Doga Alkan, Rayan Ayari, and Florentina Paraschiv as of June 30th, 2025 (#325): “Our results show that ESG rating providers exhibit systematic discrepancies when assessing the same companies. … the differences in portfolio composition and performance become more pronounced as ESG thresholds become stricter, particularly in the mid-cap market (S&P 400), where ESG scores are more volatile. … ESG screening yields market specific effects, consistently enhancing returns in the STOXX 600 but producing mixed results in the S&P 500 and S&P 400, where only portfolios filtered using MSCI and Bloomberg ESG scores sustain or sometimes even improve performance. Transaction costs rise with ESG strictness, driven by ESG score instability and price drifts. Furthermore, we show that ESG rating disagreement of the portfolios intensifies under higher thresholds. … our S&P 500 simulation study confirms that ESG exclusions significantly alter portfolio outcomes, reinforcing the importance of provider selection: MSCI portfolios achieve the highest risk-adjusted returns but at elevated costs, Bloomberg-based portfolios strike a balance, and Refinitiv portfolios minimize costs but underperform“ (p. 37/38).
My comment: Mixing ESG-Score from different providers makes scores intransparent. I prefer to select the best ESG rating agency regarding my own criteria such as coverage, timeliness, and focus on results rather than policies
Water premium: Thirsty for Returns? The Impact of Water Risk on the Global Stock Market by Rómulo Alves, Thalassa de Waal, Eline ten Bosch, Marloes Hagens, and Mathijs van Dijk as of June 25th, 2025 (#101): “… This study examines the relation between global stock returns and corporate water use and stress from 2013 to 2024. … We find a statistically significant positive relation between corporate water use and global stock returns, and show that investors perceive water use as a systematic risk, demanding an annual premium of 2.15% for investing in firms with high water use. Also, indirect and total water use have a higher water use premium than direct water use. These results seem to suggest that investors particularly value water use within supply chains“ (abstract).
My comment see Neues Research: Mehr Rendite bei höherem Wasserverbrauch | CAPinside
SDG and impact investment research
Impact confusion? Impact Measurement Harmonization: Challenges and Opportunities by Micaela Ferreiro and Julian Kölbel as of May 2025: “… The analysis explores conceptually the trade-offs between impact measurement harmonization and flexibility and compares five key public impact measurement resources (IRIS+, HIPSO, SDG Indicators, JII, and IFVI-VBA Topic and Industry-Specific Methodologies). Two key challenges emerge. First, developers of measurement resources cater to their main audience (e.g., Development Finance Institutions (DFIs), investors, and governments) and are driven by diverse motivations (e.g., from tracking SDG progress to promoting harmonization), resulting in differing impact measurement approaches. Second, organizational impacts are highly context specific, affecting the choice of metrics, incentivizing the use of proprietary metrics, and influencing the feasibility of what is measurable. Regarding opportunities, the analysis finds that promising harmonization efforts are underway. Several impact measurement resources have measurement harmonization as their motivation, and collaborative efforts between resources and key organizations are encouraging developments …“ (p. 2) … “While originally devised for countries, the SDGs emerge as an overarching framework that all organizations seek alignment with” (p. 21).
My comment regarding impact confusion see SDG-Umsätze: Die wichtigste Nachhaltigkeitskennzahl – Soehnholz ESG
Bio impact tools: Making money talk nicely: Biodiversity impact assessment for investors by Samuel Hickman, Matthew Cantele, Attila Balogh, Monika Dyndo, Jennifer Willetts, Rachel Morgain, William Geary and Brendan Wintle as of June 26th, 2025 (#297): “… Under Global Biodiversity Framework Target 15, large and transnational companies must disclose nature-related financial risks, prompting investors to adopt emerging biodiversity impact software tools. We compare eight widely used tools … We demonstrate that rankings of company impact exhibit low correlation between most tools” (abstract).
Indexer ESG power? Control Rights or Wrongs? Active versus Index Governance by David K. Musto, Anne M. Tucker, and Begum Ipek Yavuz as of June 30th, 2025 (#32): “Control rights arising from the big indexers’ big stakes give them unique and broad access to corporate leadership. … We assess the governance consequences with a survey of U.S. public company executives that compares active and index engagement. Indexers’ engagement is perceived more often as perfunctory, but gets results on board diversity. Active investors … engage more intensely and more successfully than indexers, even on most E&S issues. … New SEC guidance reclassifies governance engagement efforts like the ones documented in this survey as “control” potentially making indexers’ engagement unaffordable and halting the spread of governance practices through their control rights” (abstract).
Collective failure? Can Investor Coalitions Drive Corporate Climate Action? by Nikolaus Hastreiter as of June 13th, 2025 (#25): “… Empirically, I focus on Climate Action 100+ (CA100+), the world’s largest investor coalition on climate change. … While the findings suggest that CA100+ has had no effect on companies’ disclosures or reductions in carbon emissions, I observe a significant impact on targets. However, this effect holds only for medium- and long-term targets, not in the short-term, and is exclusively driven by companies potentially selected based on prior investor knowledge. Overall, this study finds limited effectiveness of collective engagement through CA100+”.
Greener at home? Bank Climate Commitments and the Geography of Cross-Border Lending by Laura Capera Romero and Tanja Artiga Gonzalez as of June 18th, 2025 (#9): “This paper examines how banks’ public climate commitments, such as membership in the Net Zero Banking Alliance (NZBA), influence the composition and geographic distribution of cross-border syndicated lending. … First, green lending increases after NZBA membership, but this growth is concentrated in advanced economies. It is often accompanied by a substantial decrease in conventional lending to green sectors, suggesting a shift in instruments rather than an expansion of climate-aligned finance. Second, cross-border green lending to emerging and developing economies declines, even among NZBA banks headquartered in those regions. Third, NZBA banks become more selective in their lending after joining the alliance, reducing the number of deals and focusing more on clients in advanced economies …” (abstract).
Other investment research (in: Impact confusion)
Private equity success: The Performance of Private Equity: Evidence from Confidential Filings by Arun Gupta as of July 1st, 2025 (#59): “… my study is the first … analyzing comprehensive performance and investment data from the confidential regulatory SEC Form PF filings of US private equity funds. … First, private equity has seen the fastest growth of all alternative investment asset classes in the last decade. … Second, private equity returns and reward-to-risk ratios exceed those of comparable stock market investments for nearly every major business industry. Third, private equity returns and reward-to-risk ratios demonstrate strong economies of scale. Fourth, while private equity returns exhibit dis-economies of scope, the reduction in risk via industry diversification outweighs this loss, leading to a rise in reward-to-risk ratios as private equity funds increase the number of distinct industries in their investment portfolios. Fifth, I find that portfolio company leverage does not yield any excess return premium, suggesting that leveraged buyout strategies, which carry default risk and potential issues of debt overhang, do not reward private equity funds with any additional risk compensation …” (abstract).
Private outperformance? Democratizing Private Markets: Private Equity Performance of Individual Investors by Cynthia Balloch, Federico Mainardi, Sangmin S. Oh, and Petra Vokata as of June 25th, 2025 (#126): “Using new data on wealthy U.S. households, we provide the first systematic study of private equity performance by individual investors. We identify two innovations that dramatically democratize access to private equity: the proliferation of funds with low minimum commitments and pooling capital via advisors. …. we find that aggregate individual investments in private equity per form similarly to institutions and outperform public markets. In the cross-section, the most affluent investors outperform the less affluent by 6 to 10 percentage points in public market equivalent. We show advisor skill is more likely to explain the performance gap rather than preferential access. … we show that fees impose a sizable drag on performance, especially for less affluent investors“ (abstract).
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Werbung (in: Impact confusion)
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 etwas über 10%, Artikel 9 Fonds circa 20%, und 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.
