GRASFI - Global Research Alliance for Sustainable Finance and Investment

I am truly humbled and deeply honoured to receive the Insight Investment - University of Oxford Prize for Greening Finance for Outstanding Research. It is a testament to the hard work and dedication of everyone involved in my department at Maastricht University School of Business and Economics and the cooperating universities, including my PhDs and co-authors who spread to many other universities in Europe and beyond. I would also very much like to thank my partners in the pension and investment world, including the International Centre for Pension Management, GRASFI - Global Research Alliance for Sustainable Finance and Investment , Netspar, the European Commission's Horizon 2020 program, Pensioenfonds Detailhandel, and many other public and private sector organisations that I cooperated with. Hence, I share this recognition with those who inspired and supported me throughout the years. It motivates me to keep striving for a meaningful impact in our evolving field. It is my strong conviction that players in this field should make decisions based on solid academic evidence and methodologies. And sometimes this means that dilemmas and trade-offs need to be earnestly spelled out to anyone involved. Finally, I congratulate my fellow Prize Winner Emmanuel Faber, and wholeheartedly thank University of Oxford and Insight Investment for setting up this award.

GRASFI Conference Summary – Research Presentations on "Credibility and Accountability". The session was moderated by Professor Peter TANKOV, Professor of Quantitative Finance at ENSAE Paris. The research papers presented covered a wide range of topics, from carbon offsets to assurance and emission targets, highlighting the important role of regulations in ensuring the legitimacy and quality of sustainability efforts among firms. “Carbon Offsets: Decarbonization or Transition-Washing?” by Sehoon Kim (University of Florida): As corporate efforts to directly reduce emissions fall short of decarbonisation goals, carbon offsetting allows firms to claim reductions achieved by others to lower their carbon footprints. However, there are concerns that carbon offsets might prevent firms from undertaking genuine decarbonising actions. The paper uses a novel dataset to analyse the global carbon offset market and study incentives for firms. Findings show that low-emission firms use offsets more to reduce their footprints, while high emitters tend to cut emissions directly. The study highlights the need for regulations on pricing and quality of carbon offsets to ensure transparency and effectiveness in corporate transitions. “On the Importance of Assurance in Carbon Accounting” by Florian Berg (Massachusetts Institute of Technology): The study shows that just because a firm sets a target, it does not mean it will reduce CO2 emissions. Firms that obtain assurance for their reported emissions have 13.7% higher absolute emissions and 9.5% higher carbon intensities compared to those that do not have assurance. In addition, only those firms that obtain assurance for their emission reporting experience a significant and economically meaningful decline in their carbon emissions (7.5% year-on-year decline in total emissions). Thus, firms obtain assurance as a signal to their stakeholders about their intention to reduce future carbon emissions. The paper calls for mandatory auditing when carbon disclosure is mandatory and when disclosed emissions are generally relied upon in regulation. “Accountability of Corporate Emissions Reduction Targets” by Shawn Kim (University of California, Berkeley): The paper reviews emission targets for 2020 to assess how firms disclose results and face consequences for missed targets. Using CDP data, it finds minimal accountability and low awareness, with only three of 88 firms failing their targets receiving media coverage. Although firms initially received great benefits in ESG ratings and media sentiment from announcing their targets, there were no significant repercussions when they missed them. These findings highlight the need for increased transparency and accountability, offering insights for potential regulations on emissions targets for 2030, 2040, and 2050. GRASFI - Global Research Alliance for Sustainable Finance and Investment

𝗕𝗲𝘀𝘁 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 𝗣𝗮𝗽𝗲𝗿 𝗔𝘄𝗮𝗿𝗱 🤩 Our colleagues Kayshani Gibbon, Jeroen Derwall, Dirk Gerritsen, and Kees Koedijk, were awarded the BNP Paribas Asset Management Best Research Paper Award at the GRASFI - Global Research Alliance for Sustainable Finance and Investment (GRASFI Conference) for their paper titled “Renaming with Purpose: Investor Response and Fund Manager Behaviour After Fund ESG-Renaming”. 🌳 The authors investigated the growing trend of mutual funds adopting ESG-related appellations in their names, to assess whether such changes are cosmetic or purposeful. The study analysed a global sample of 740 ESG-related name changes between 2016 and 2022. Using a staggered difference-in-differences method, the authors explored the impact of renaming on key metrics such as fund flows, portfolio-level ESG performance, and fees. 🧐 The results indicate mixed evidence. While fund managers did improve their portfolios’ ESG performance post-renaming, by reducing exposure to controversial sectors, lowering carbon intensity, and mitigating ESG risks, there was little to no impact on management fees and investors’ flow response. These results suggest that ESG renaming is more than a superficial marketing strategy, reflecting genuine efforts by fund managers to align with ESG criteria. 👏 We congratulate our colleagues on their award!  The paper is available from:  https://lnkd.in/d6Nca7jm #uufinance #usefinance #FinanceResearch #ResearchAward #MutualFunds #ESG Utrecht University School of Economics