Explain the following terminology:
SRI
ESG
CSR
Explain the following terms:
impact investing
philantropy/charitable giving
Name examples for environmental issues (4)
Name examples for social issues (4)
Name examples for governance issues (4)
Name some ESG investment styles (5)
positive/negative screening
best-in-class
portfolio tilt
engagement
thematic investment
name some barriers to esg investing (2)
What to Li, Polychronopolous (2020) show? (2)
What does Norway’s State Endowment Fund pursue? Which approach do they follow? (4)
responsible investment guidelines
product based
conduct based
active ownership, public guidelines
What is the traditional view on CSR? (2)
Paradigm 1: Why would CSR maximize shareholder value? (2)
mitigate costs regarding physical risks and transition risks
reduce risk of regulatory penalties
What types of social preferences does the academic literature consider? (3)
deontological (categorical imperative)
Non-consequentialist utilitarian (non-pecuniary “dividends”)
consequentialist utilitarian
Name some experimental and empirical evidence on social preferences. (5)
Describe the model from the Heinkel, Kraus, Zechner (2001) paper. (3)
Name the implications from the model. (4)
2 types of firms (clean and polluting)
2 types of investors (green and financial)
Polluting firms may become clean
=> Clean firms have lower cost of capital
=> lower expected returns for green investors
=> value-maximizing managers will adopt green technologies
=> lower cost of capital wedge between brown and green firms
What is the empirical evidence on the connection between expected returns and SRI investment strategies? (2)
disagreement
ESG does not outperform
What is ‘Greenium’? Has it increased or decreased?
difference in expected returns between green and brown assets
greenium has mostly increased over past years, since market was surprised by stronger green investor preferences
Do divestment strategies impact firms? (3)
no significant impact
announcement may impact consumers => depresses share price
maybe underestimated due to corporate response
What do Exit and Voice mean in terms of ESG-Strategies? (2)
Exit = quantitative filter-based
Voice = Engagement-based
Name some facts about ESG and shareholder voting (3)
most ES proposals fail
most shareholder proposals fail
voting is largely delegated to asset managers
What’s the aim of the Investor Democracy is Expected (INDEX) Act? Name pros and cons. Propose one solution (4)
aims to require passively managed funds to collect voting instructions
+ better aggregation of investors hetergeneous preferences
- little knowledge on valuation effects + excessive or too little delegation
-> Small investors (or even larger institutions) provide voting instructions based on a proxy advisor
Zuletzt geändertvor einem Monat