The PRI Academic Seminar Series invites leading ESG experts to present their research to academic scholars and investors.

The aim of the series is to: 

  • Enable investors to learn from cutting-edge research and engage with authors directly 
  • Give responsible investment thought leaders the opportunity to present their work and obtain valuable feedback 
  • Provide an opportunity for junior scholars to network with speakers and obtain career advice 
  • Be more inclusive and strengthen our global PRI Academic Network community throughout the year.

Each session consists of two parts: 

  • Part 1: Presentation (60min interactive seminar) – open to all 
  • Part 2: Network opportunity and career advice for junior scholars with speaker (30min) – open to PhD students and junior faculty.

1 December 2023

Zacharias Sautner

Department of Banking and Finance, University of Zurich

Do investors care about biodiversity?

This paper introduces a new measure of a firm’s negative impact on biodiversity, the corporate biodiversity footprint, and studies whether it is priced in an international sample of stocks. On average, the corporate biodiversity footprint does not explain the cross-section of returns between 2019 and 2022. However, a biodiversity footprint premium (higher returns for firms with larger footprints) began emerging in October 2021 after the Kunming Declaration, which capped the first part of the UN Biodiversity Conference (COP15). Consistent with this finding, stocks with large footprints lost value in the days after the Kunming Declaration. The launch of the Taskforce for Nature-related Financial Disclosures (TNFD) in June 2021 had a similar effect. These results indicate that investors have started to require a risk premium upon the prospect of, and uncertainty about, future regulation or litigation to preserve biodiversity. 

12 January 2024

Itay Goldstein

Wharton School of Business, University of Pennsylvania

On ESG investing: Heterogeneous preferences, information and asset prices

We study how environmental, social and governance (ESG) investing reshapes information aggregation by prices. We develop a rational expectations equilibrium model in which traditional and green investors are informed about financial and ESG risks but have different preferences over them. Because of the preference heterogeneity, traditional and green investors trade in the opposite directions based on the same information. We show that the equilibrium price may not be uniquely determined. An increase in the fraction of green investors and an improvement in the ESG information quality can reduce price informativeness about the financial payoff and raise the cost of capital.

2 February 2024

Xiaoyun Yu

Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University

Levelling up your green mojo: The benefits of beneficent investment

Using a manually collected dataset on project investment and exploiting the staggered designation of the major cities for the environmental protection (MCEP) scheme in China, we show that firms increase their environmental investments after their city experiences heightened pollution prevention and control by the government. The effect is mostly driven by “beneficent investments” – environmental projects that not only benefit the firm but also directly spill over to society at large. Following the MCEP establishment, media coverage of environmental issues in local cities increases. City officials are more likely to be promoted if they meet pre-set environmental targets or reduce pollution. Firms spending more on green investments pay less taxes, garner more subsidies, and secure more bank loans. State-owned enterprises (SOEs) lead non-SOEs in green investment, whereas the latter exceeds the former eventually. MCEP cities with larger corporate environmental spending reduce pollution, improve local employment, and attract more highquality new firms to a larger extent. Heavily polluting firms contribute less to the city’s tax revenues and speed up their expansion to non-polluting sectors. Firms investing more in environmental projects – especially the beneficent ones – have larger value gains, produce more green patents, and experience greater labor productivity than other firms in the same MCEP city. Our findings highlight the role of regulatory mechanisms in enabling E&S investment to be both value- and welfare-enhancing.

8 March 2024

Marco Becht

Solvay Brussels School for Economics and Management at Université libre de Bruxelles

Voice through divestment

A common argument against divestment is that it discards voting power and has a small effect on stock prices. We argue that divestment is a statement of disapproval that aligns actions with words for effectiveness. We show that the Go Fossil Free divestment movement is a narrative with impact. Viral divestment pledges depressed the share prices of all high carbon emitters, including those with no divestment. Peak virality coincided with a concurrent rise in the carbon premium and preceded net-zero commitments. The introduction of these commitments effectively recast divestment from a moral statement to a strategic exercise in risk management. 

19 April 2024

Reena Agarwal

McDonough School of Business, Georgetown University

Why do investors vote against corporate directors?

Investors now hold directors responsible for newer issues like climate change and board diversity. Within the environment category, climate change is the only subcategory associated with voting outcome, whereas none of the social issues are relevant. Governance remains important; however, our proxy differs markedly from traditional measures. Institutional investors have begun to provide rationales for their votes to convey preferences. Dissent votes increase when they express concerns about board diversity, busyness, tenure, and independence. Female directors generally receive fewer dissent votes, except for those with a long tenure. The presence of a shareholder proposal correlates with reduced support.