Liang, Sun, and Teo (2020)

Liang, Hao, Lin Sụn, and Melvin Teo. “Greenwashing.” Working paper (Singapore Management University), May 2020.

From the author’s abstract:

“By exploiting the staggered adoption of stewardship codes, we provide causal evidence that relates greenwashing to fund underperformance. Consonant with an agency explanation, funds that greenwash (i) underperform more when incentive alignment is poor, (ii) trigger more regulatory violations, and (iii) report more suspicious returns. However, investors do not appear to discriminate between funds that greenwash and those that are genuinely green.”

LK comment: Strong paper.

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3610627