ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation

In this paper, we study the asymmetric information between asset managers and investors in the socially responsible investment (SRI) market. Specifically, we investigate the lack of transparency of the extra-financial information communicated by asset managers. Using a unique international panel dat...

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Autores principales:	Bertrand Candelon, Jean-Baptiste Hasse, Quentin Lajaunie
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	socially responsible investing (SRI) environmental, social and governance (ESG) asymmetric information regulation Insurance HG8011-9999
Acceso en línea:	https://doaj.org/article/18cff8c322f143c389b699a76037ce73
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spelling	oai:doaj.org-article:18cff8c322f143c389b699a76037ce732021-11-25T18:56:09ZESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation10.3390/risks91101992227-9091https://doaj.org/article/18cff8c322f143c389b699a76037ce732021-11-01T00:00:00Zhttps://www.mdpi.com/2227-9091/9/11/199https://doaj.org/toc/2227-9091In this paper, we study the asymmetric information between asset managers and investors in the socially responsible investment (SRI) market. Specifically, we investigate the lack of transparency of the extra-financial information communicated by asset managers. Using a unique international panel dataset of approximately 1500 equity mutual funds, we provide empirical evidence that some asset managers portray themselves as socially responsible yet do not make tangible investment decisions. Furthermore, our results indicate that the financial performance of mutual funds is not related to asset managers’ signals but should be evaluated relatively using extra-financial ratings. In summary, our findings advocate for a unified regulation framework that constrains asset managers’ communication.Bertrand CandelonJean-Baptiste HasseQuentin LajaunieMDPI AGarticlesocially responsible investing (SRI)environmental, social and governance (ESG)asymmetric informationregulationInsuranceHG8011-9999ENRisks, Vol 9, Iss 199, p 199 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	socially responsible investing (SRI) environmental, social and governance (ESG) asymmetric information regulation Insurance HG8011-9999
spellingShingle	socially responsible investing (SRI) environmental, social and governance (ESG) asymmetric information regulation Insurance HG8011-9999 Bertrand Candelon Jean-Baptiste Hasse Quentin Lajaunie ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation
description	In this paper, we study the asymmetric information between asset managers and investors in the socially responsible investment (SRI) market. Specifically, we investigate the lack of transparency of the extra-financial information communicated by asset managers. Using a unique international panel dataset of approximately 1500 equity mutual funds, we provide empirical evidence that some asset managers portray themselves as socially responsible yet do not make tangible investment decisions. Furthermore, our results indicate that the financial performance of mutual funds is not related to asset managers’ signals but should be evaluated relatively using extra-financial ratings. In summary, our findings advocate for a unified regulation framework that constrains asset managers’ communication.
format	article
author	Bertrand Candelon Jean-Baptiste Hasse Quentin Lajaunie
author_facet	Bertrand Candelon Jean-Baptiste Hasse Quentin Lajaunie
author_sort	Bertrand Candelon
title	ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation
title_short	ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation
title_full	ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation
title_fullStr	ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation
title_full_unstemmed	ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation
title_sort	esg-washing in the mutual funds industry? from information asymmetry to regulation
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/18cff8c322f143c389b699a76037ce73
work_keys_str_mv	AT bertrandcandelon esgwashinginthemutualfundsindustryfrominformationasymmetrytoregulation AT jeanbaptistehasse esgwashinginthemutualfundsindustryfrominformationasymmetrytoregulation AT quentinlajaunie esgwashinginthemutualfundsindustryfrominformationasymmetrytoregulation
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ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation

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