“Noon Sunshine-Young Scholars Seminar” is a regular academic exchange platform held by School of Finance. It aims to offer valuable occasions of communications among scholars in our college, between teachers and students, the domestic and the oversea. In this semester, we keep our original intention, set off for a new voyage. We will devote ourselves to fostering the academic atmosphere in the college, and promoting the academic level for both teachers and students.

The fourth session of “Noon Sunshine-Young Scholars Seminar” for the Spring Semester in 2023 is arranged as follows:

Lecture topic

Seeking Green? Mutual Fund Investment in ESG Stocks

Keynote Speaker: Dai Wenting

Commentator: Kang Le

Date

Wednesday, May 31st, 2023

Time

12:00-13:00

Lecture Venue  

Room 116, School of Finance

Abstract

This paper examines how equity mutual fund managers make decisions on investing in ESG stocks. Using investor flows to proxy for fund managers' pecuniary incentive, we show that mutual funds with flows highly sensitive to performance invest less in ESG stocks, while funds with flows positively sensitive to ESG score invest more in ESG stocks. Moreover, based on hand-collected data of manager compensation, we find that fund managers whose compensations are explicitly linked to fund performance invest less in ESG stocks. Overall, these findings suggest that pecuniary motives of fund managers play a significant role in mutual funds' investment in ESG stocks.