Nature risks: 11x new research on green volatility, climate alliances, brown asset managers, green accounts, omnibus, nature risks, green turbulence, exclusions, stakeholders, medtech, venture risks (# shows SSRN full paper downloads as of May 22nd, 2025)
Ecological and social research
Green volatility: Renewable Asset Price Volatility and Its Implications for Decarbonization by Harrison Hong, Jeffrey Kubik, and Edward Shore as of May 10th, 2025 (#488): “We show that the price volatility of renewable assets is significantly higher than that of brown assets. …This estimate is related to higher electricity price volatility and more volatile firm revenues, and is consistent with industry concerns about a host of uncertainties regarding renewables intermittency and policy implementation. … higher green asset volatility is at least as important a determinant of decarbonization as the relative mean productivity of green versus brown capital” (p. 38).
Climate show? An Empirical Examination of Business Climate Alliances: Effective and/or Harmful? by Matteo Gasparini and Peter Tufano as of May 14th, 2025 (#76): “… We study eleven major alliance mostly focused on financial services firms and 424 major publicly traded financial institutions … Financial service firms that join climate alliances show increased adoption of climate-aligned management practices; greater adoption of emissions targets; reductions of own-emissions; mixed evidence of increased funding for green projects; and greater pro-climate lobbying. We find no evidence of traditional antitrust violations in the form of pricing power or market concentration; no reduction in funding to oil and gas companies; and no lower risk-adjusted shareholder returns than non-alliance members …“ (abstract). My comment: No reduction in fossil company funding and no clear evidence of increased green project funding is very disappointing.
ESG Asset Managers? Point of No Returns 2025 – A responsible investment benchmark of 76 of the world’s largest asset managers by Share Action as of May 21st, 2025: “This report … provides overall rankings and highlights trends in performance since our first Point of No Returns report, published in 2020. It also includes examples of leading practice. … We found that: Industry progress has stalled: there are some leaders but the largest US managers are lagging behind. … Asset managers continue to invest in industries that are extremely harmful to people and planet … Asset managers still haven’t addressed their biodiversity blind spot … Asset managers frequently only consider environmental and social issues in a minority of funds…. The asset management sector does not appear to want to fix itself …”( p. 4-6). My comment: Many of the lower-ranked asset managers in this report used to talk about their ESG DNA. Asset management DNA seems to be rather volatile.
Green accounts: Greening the retail banking industry: Evidence from German bank account consumers by Sophie Maria Anneke Klein and Friedemann Polzin as of May 21st, 2025: “This study investigates the reasoning behind adopting sustainable bank accounts … of 1501 consumers in Germany. The most important determinant for adopting these accounts was sustainable finance self-efficacy – in other words, the perceived impact that the consumer can make by using the product. Other significant determinants include the consumers‘ willingness to pay a premium for the sustainability characteristic. Sustainable values, trust in bank in provider, and financial literacy are less relevant drivers of adoption. The study identified five distinct consumer clusters with different levels of adoption to generate more targeted industry and policy responses due to limited uptake”(abstract).
Defect omnibus: EU omnibus package on sustainability – something we don’t want to ride (yet)? by Josef Baumüller as of May 1st, 2025 (#580): “In February 2025, the European Commission proposed its “first omnibus package on sustainability”, aiming at simplification and deregulation of the current sustainability (reporting) regime in the EU. One important measure addresses the scope of companies falling under the CSRD, which should be considerably reduced by introducing a new threshold of 1,000 employees. … this paper analyzes a sample of approx. 32,000 Austrian companies … the reduction of companies subject to the CSRD reporting requirements might be considerable – and for a SME-dominated country like Austria arguably even more severe than expected by the European Commission. Also, different sectors are effected in a way that is not consistent with a sector’s sustainability impacts or other considerations … “ (abstract).
ESG investment research (in: Nature risks)
Nature risks: Nature and Climate Risk in Asset Prices by Chiara Colesanti Senni, Skand Goel, and Markus Leippold as of May 14th, 2025 (#269): “… Our model guides an empirical analysis that compares sensitivities of stock returns to news about biodiversity and climate, which we call nature and climate beta …. Our model predicts that with better information, firms’ nature and climate betas should more accurately reflect their fundamental risk exposures. …. We find that climate betas increasingly reflect corporate climate impact, with higher-impact firms showing greater sensitivity. … However, nature betas for companies more dependent on nature decrease relative to less dependent companies, suggesting inconsistencies in the financial market’s perception and pricing of nature-specific news and risks“ (abstract).
Sustainable cash flows: Does Environmental and Social Performance Pay Off amid Market Turbulence? A Risk Premia Analysis by Giovanni Cardillo, Cristian Foroni, and Murad Harasheh as of May 16th, 2025 (#11): “… We focus on non-financial firms in Europe and the United Kingdom from 2017 to 2022. … our findings reveal that sustainability alone does not directly lower the equity risk premia, especially during widespread economic stress. … Nonetheless, our evidence documents that investors are more likely to price more tangible initiatives tackling climate-related risks, demanding lower risk premiums for firms enacting such policies. Finally, our estimates point out that … more sustainable firms display lower market crash risk and higher coverage ratios, suggesting that more sustainable firms are less likely to be zombie firms during adverse states of the economy”.
SDG and impact investment research
Effective exclusions? Investor Alignment in Divestment Decisions and Firm Behavior: Evidence from Publicly Disclosed Exclusion Lists by Nicolas Rudolf and Huajuan Yuan as of May 19th, 2025 (#15): “We study the consequences of portfolio exclusion announcements by Norges Bank Investment Management (NBIM) … Market participants respond negatively to the exclusion disclosures with an average abnormal return of -0.5% over a three-day window surrounding the announcement. Using a novel dataset of exclusion decisions by 86 major institutional investors, we document substantial institutional alignment in exclusion decisions. Firms excluded by NBIM face five times more institutional investor exclusions than other excluded firms in our dataset. … Exclusions with broader institutional alignment, particularly among asset owners, are associated with significant improvements in firms‘ environmental and social performance. However, when exclusions occur without broader institutional alignment, firms experience deteriorating environmental and social performance“ (abstract). My comment: If exclusions can improve ES-performance, they should be used more often especially by very large institutional investors.
Shareholders first? Can a Shareholder Focus Create Value for all Stakeholders? By John Ampong and Matthew Souther as of May 16th, 2025 (#61): “We develop a novel machine-learning technique analyzing earnings call transcripts to measure whether a manager’s focus is on shareholders or stakeholders. We find that managers focusing on shareholders generate significantly higher stock returns in subsequent periods. However, these higher returns do not come to the detriment of other stakeholders; we find that shareholder-focused firms experience far fewer adverse environmental and social (ES) incidents in subsequent periods. Further, following the COVID-19 pandemic drawing attention to ES issues, shareholder-focused firms experience the strongest declines in subsequent ES incidents” (abstract).
Other investment research (in: Nature risks)
Medtech AI: Artificial Intelligence Stakes a Claim on Medtech by Christian Johnson, Jennifer McCaney, Mahruq Siddiqui, Gunnar Trommer, Erik Adams, Meghna Eichelberger, and Peter Lawyer from the Boston Consulting Group as of May 2025: “The period from 2015 through Q3 2024 saw growth of more than 35X in AI/ML-enabled devices, with 1,016 products authorized by the FDA to date. Radiology remains the leading application … Software-as-a-medical-device (SaMD) sets the standard, accounting for 71% of all AI/ML authorizations. Coding hotspots in the US are responsible for about half of AI/ML authorizations, with Israel, France, China, South Korea, and Japan adding another 27%. … Two-thirds of AI/ML products were sponsored by private companies at the time of authorization. Half of AI/ML authorized devices came from VC backed companies, which have cumulatively invested $14 billion in AI/ML-enabled devices since 2010” (p. 4). My comment: My fund invests heavily in Medtech
Venture ban? Should Governments Restrict Foreign Investments in Startups? By Fiona Paine, Richard R. Townsend, and Ting Xu as of May 2025: “The global shift toward restricting foreign investments in startups represents a significant recalibration of the traditional relationship between innovation policy and national security considerations. … while these restrictions may yield important security benefits by limiting knowledge spillovers to strategic competitors, they also impose substantial costs on domestic innovation ecosystems through reduced capital availability, disrupted syndication networks, and potentially diminished innovation. The empirical evidence indicates that foreign venture capital investments–particularly those from corporate investors–do facilitate measurable knowledge transfers across borders. … At the same time, the implementation of policies like FIRRMA (Soe: USA 2018) has led to significant decreases in overall startup funding in affected industries, extending well beyond the direct loss of foreign capital. … Alternatives such as mitigation measures, domestic funding subsidies, and coordinated approaches to limiting knowledge flows through other channels all merit further research and analysis …“ (p. 21/22).
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Werbung (in: Nature risks)
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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.