Discussion paper

DP18881 The Sustainable Finance Disclosure Regulation: Voluntary Signaling or Mandatory Disclosure?

We study the consequences of mandatory sustainable finance disclosure regulation (SFDR) for the money flows and investment behavior of mutual funds. We find that EU-regulated funds significantly improve the ESG profile of their investments relative to US mutual funds, holding for both the retail and the institutional funds. Taken together, we find that SFDR enables mutual funds to attract capital by signaling comitments to sustainable investments.

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Citation

Spaans, L, J Derwall, j huij and K Koedijk (2024), ‘DP18881 The Sustainable Finance Disclosure Regulation: Voluntary Signaling or Mandatory Disclosure?‘, CEPR Discussion Paper No. 18881. CEPR Press, Paris & London. https://cepr.org/publications/dp18881