Misum Lecture: Decarbonizing institutional investor portfolios
About the speaker
Professor Philipp Krueger is Professor of Responsible Finance at the University of Geneva (GSEM, GFRI) and Senior Chair at the Swiss Finance Institute. His research spans corporate, sustainable, and behavioral finance and has been published in all three major academic Finance journals (Journal of Finance, Journal of Financial Economics, Review of Financial Studies). He is a regular speaker at leading finance conferences worldwide. His research has received or been nominated for awards from organizations like the BSI Gamma Foundation, Chicago Quantitative Alliance, the Financial Management Association, and the European Financial Management Association.
In this Misum Lecture organized by the Misum Sustainable Finance Initiative, Prof. Krueger will present the paper “Decarbonizing Institutional Investor Portfolios: Helping to Green the Planet or Just Greening Your Portfolio?”
We study whether and how climate-conscious institutional investors, i.e., institutions that join climate related investor initiatives, are decarbonizing their equity portfolios. Decarbonization could be achieved by re-weighting portfolios towards lower carbon emitting firms or targeted engagements with portfolio companies to reduce emissions. Our analysis suggests that portfolio re-weighting is the predominant strategy used by climate-conscious institutions to green their portfolios, in particular by investors based in countries with carbon emissions pricing schemes. Institutions also rely on engagement, particularly following the 2015 Paris Agreement. Furthermore, we find no evidence that climate conscious investors allocate capital towards firms developing climate patents, but they do re-weight towards firms generating more green revenues. Overall, our analysis raises doubts about the effectiveness of investor-led initiatives in reducing corporate carbon emissions and helping take necessary action to tackle climate change for an all-economy transition to “green the planet”.
The lecture is open to all, please save the date in your calendar and join us on June 14 from 13:45 in the Yinka Shonibare room (floor 5). Please arrive via the entrance on Bertil Ohlins Gata 4. Welcome!