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Who goes green: Reducing mutual fund emissions and its consequences

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  • Humphrey, Jacquelyn E.
  • Li, Yong

Abstract

Ameliorating global warming has been touted as one of the most pressing issues of our time. We investigate whether there are mutual fund families that purposefully decrease their portfolios’ exposure to greenhouse gas emissions, and find families that sign the Principles for Responsible Investment (PRI) have significantly lower portfolio emissions after signing the initiative than do non-signatory families. There are two mechanisms via which this reduction occurs: access to the resources offered by the PRI (networks, information, education, etc.), and families with pro-environmental stakeholders. Families that reduce their emissions experience significantly increased fund flow.

Suggested Citation

  • Humphrey, Jacquelyn E. & Li, Yong, 2021. "Who goes green: Reducing mutual fund emissions and its consequences," Journal of Banking & Finance, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:jbfina:v:126:y:2021:i:c:s037842662100056x
    DOI: 10.1016/j.jbankfin.2021.106098
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    2. Cortez, Maria Céu & Andrade, Nuno & Silva, Florinda, 2022. "The environmental and financial performance of green energy investments: European evidence," Ecological Economics, Elsevier, vol. 197(C).
    3. Mahmoudian, Fereshteh & Yu, Dongning & Lu, Jing & Nazari, Jamal A. & Herremans, Irene M., 2023. "Does cost of debt reflect the value of quality greenhouse gas emissions reduction efforts and disclosure?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 52(C).
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    More about this item

    Keywords

    Environmental finance; Mutual funds; Responsible Investment;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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