Kim and Yoon (2020)

Kim, Soon, and Aaron Yoon. “Analyzing Active Managers' Commitment to ESG: Evidence from United Nations Principles for Responsible Investment.” Working paper (Korea Advanced Institute of Science and Technology and Northwestern University), 2020.

From the author’s abstract:

“We analyze active managers’ commitment to ESG using United Nations Principles for Responsible Investment (PRI)…. 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 but only quant-driven and institution-only funds improve ESG post signing.”

LK comment: Strong paper.

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3555984