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Decarbonizing Institutional Investor Portfolios

2022; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.4212568

1556-5068

Vaska Atta-Darkua, Simon Gloßner, Philipp Krueger, Pedro Matos,

State Capitalism and Financial Governance

Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Decarbonizing Institutional Investor Portfolios 59 Pages Posted: 20 Sep 2022 See all articles by Vaska Atta-DarkuaVaska Atta-DarkuaUniversity of Virginia, Darden School of BusinessSimon GlossnerBoard of Governors of the Federal Reserve SystemPhilipp KruegerUniversity of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute; European Corporate Governance Institute (ECGI); University of Geneva - Geneva School of Economics and ManagementPedro MatosUniversity of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI) Date Written: September 7, 2022 Abstract Combining global data on institutional investors' equity holdings and firm-level carbon emissions, we study how climate-conscious institutions reduced the carbon emissions of their equity portfolios between 2005 and 2019. We hypothesize that institutions could either decarbonize via tilting their holdings towards lower emitting firms or via engaging their portfolio firms to curb emissions. Our analysis suggests that tilting is the predominant strategy used by climate-conscious institutions but also uncover some early evidence of longer-term engagement with the top emitting firms following the 2015 Paris Agreement. We also find limited evidence of other portfolio measures of energy transition in terms of green patents and firm revenues. Overall, our analysis raises some doubts about the effectiveness of investor-led initiatives in reducing corporate carbon emissions and taking necessary action on climate change. Keywords: climate change, decarbonization, GHG emissions, sustainability, institutional investors, CDP, Climate Disclosure Project, Climate Action 100+ JEL Classification: G15, G23, G30, M14 Suggested Citation: Suggested Citation Atta-Darkua, Vaska and Glossner, Simon and Krueger, Philipp and Matos, Pedro, Decarbonizing Institutional Investor Portfolios (September 7, 2022). Available at SSRN: https://ssrn.com/abstract=4212568 Vaska Atta-Darkua University of Virginia, Darden School of Business ( email ) 100 Darden BlvdCharlottesville, VA VA 22903United States Simon Glossner Board of Governors of the Federal Reserve System ( email ) 20th Street and Constitution Avenue NWWashington, DC 20551United States Philipp Krueger University of Geneva - Geneva Finance Research Institute (GFRI) ( email ) 40 Boulevard du Pont d'ArveGeneva 4, Geneva 1211Switzerland Swiss Finance Institute ( email ) Switzerland European Corporate Governance Institute (ECGI) ( email ) c/o the Royal Academies of BelgiumRue Ducale 1 Hertogsstraat1000 BrusselsBelgium University of Geneva - Geneva School of Economics and Management ( email ) Uni MailBd du Pont-d'Arve 40Geneva, 1211Switzerland Pedro Matos (Contact Author) University of Virginia - Darden School of Business ( email ) University of VirginiaP.O. Box 6550Charlottesville, VA 22906-6550United States434 243 8998 (Phone)434 924 0726 (Fax) HOME PAGE: http://www.darden.virginia.edu/faculty-research/directory/pedro-matos/ European Corporate Governance Institute (ECGI) ( email ) c/o the Royal Academies of BelgiumRue Ducale 1 Hertogsstraat1000 BrusselsBelgium Download This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? Place Job Opening Paper statistics Downloads 57 Abstract Views 155 rank 505,793 PlumX Metrics Related eJournals Mutual Funds, Hedge Funds, & Investment Industry eJournal Follow Mutual Funds, Hedge Funds, & Investment Industry eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 2,963 PAPERS 15,953 This Journal is curated by: René M. 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