CEPR and the Long Term Investors @Unito, in partnership with Generali, are delighted to invite you to a presentation and discussion based on the second LTI Report: The Role of Institutional Investors as Responsible Investors.
5 April 2023 at 4PM (CET)
Join the authors Rajna Gibson Brandon (University of Geneva) and Philipp Krueger (University of Geneva), editor Pietro Garibaldi (University of Torino, [email protected] and CEPR) and moderator Cédrik d’Aviau de Ternay (Generali France) for the presentation and discussion of this report.
Register here to attend in person or online.
This is a hybrid event. The capacity to attend in-person will be limited.
Venue: Generali France, 2 Rue Luigi Cherubini, 93210 Saint-Denis
15:30-16:00 - In person registration
16:00-17:30 - Presentation and Panel Discussion
17:30-18:30 - Drinks Reception
There is growing interest globally in responsible investing, whereby institutional investors incorporate environmental, social, and governance (ESG) issues into their investment processes. In this report, we explore a series of issues relating to the responsible equity and fixed–income investment choices of institutional investors.
We start by analyzing what motivates institutional investors to act as responsible investors in their equity investments, and also study the extent to which institutional investors use specific responsible investment strategies. We then explore whether the risk and return characteristics of institutional investors’ equity portfolios correlate with the responsible investment strategies that they employ. The report also investigates whether the use of specific responsible strategies is related to better ESG portfolio outcomes. Relying on our own research and the emerging academic literature on greenwashing, we also evaluate whether responsible investors who promise to invest responsibly actually do so in practice and “walk the ESG talk”.
The second part of the report focuses on fixed-income sustainable markets by examining a new class of sustainability-related fixed-income instruments: sustainability-linked bonds (SLBs). We demonstrate that SLBs are predominantly issued in Europe by large, levered, and profitable firms and that they can be incentive compatible for the issuers if their coupon penalty is large enough. They may prompt “real effects”, such as leading the underlying firms in which they invest to significantly curb their CO2 emissions. Building on our own recent research findings, we further explain why greenwashing is more prominent in the United States than in the rest of the World and also emphasize the most important challenges faced by responsible investors when they implement their equity and fixed-income investment strategies. We conclude the report with an outlook on the key questions that will shape the future path of ESG investing.