Take Action

Home | Faculty & Research Overview | Research

Research Details

Analyzing Active Managers' Commitment to ESG: Evidence from United Nations Principles for Responsible Investment

Abstract

We analyze active managers’ commitment to ESG using United Nations Principles for Responsible Investment (PRI), which is the largest global initiative to incorporate ESG. We find a significant increase in fund flow to signatory funds regardless of their prior fund-level ESG score. However, signatories do not improve fund-level ESG score while exhibiting a decrease in return. Further, they vote less on environmental issues and stocks in their portfolio experience increased environmental controversies. Funds that are smaller, younger, and had higher historical alpha are more likely to sign PRI. Also, funds that had high ESG score are not more likely to sign the PRI. Lastly, only quant-driven and institution-only funds improve ESG post signing. Overall, only a small number of funds improve ESG while many others use the PRI status to attract capital without making notable changes to ESG.

Type

Working Paper

Author(s)

Aaron Yoon, Soohun Kim

Date Published

2020

Citations

Yoon, Aaron, and Soohun Kim. 2020. Analyzing Active Managers' Commitment to ESG: Evidence from United Nations Principles for Responsible Investment.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action