Changing the Social Behavior of Institutional and Retail Investors

• Autorzy: Elisa Bocchialini , Federica Ielasi
• Języki publikacji: EN

Abstrakty

EN

The Subchapter focuses on institutional and retail investors' attitudes towards sustainable investments, which aim to achieve a financial return together with greater attention to environmental, social, and governance (ESG) practices. Institutional investors are a key component of modern financial systems. The lowest common denominator among them is the professional practice of asset management on behalf of several individuals. Nowadays, increasing numbers of institutional investors recognize ESG factors as value drivers. As a result, institutional investors can also play a key role in sustainability issues. Also for many retail investors, the goal to generate returns is confirmed, but consistently with their values and principles. The interest in sustainable products has recently grown also due to the spread of the coronavirus pandemic that produced a sudden change in the psychology of financial planning. Still, responsible investors and sustainable products are not all the same. The OECD identifies four types of institutional investors, by considering how they integrate ESG factors into their investment portfolio decisions. Indeed, there are several different investment strategies through which institutional investors take account of ESG factors in their portfolio construction. In the same way, mutual funds dedicated to retail investors can apply different strategies for asset selection and portfolio management. In Europe, the legislation in the field of sustainable finance is intervening for the main purpose to increase the levels of disclosure of responsible financial products, and then reduce the risks of greenwashing, in particular for the benefit of retail investors. According to this regulation, financial market participants and financial advisers must provide the information necessary to enable retail investors to make informed investment decisions (genuinely sustainable rather than greenwashed products). (original abstract)

Słowa kluczowe

EN

Institutional investors; Individual investors; Investing; Non-financial reporting

PL

Inwestor instytucjonalny; Inwestor indywidualny; Inwestowanie; Sprawozdawczość niefinansowa

• Czasopismo: Scientific Publications / University of Economics in Katowice
• Rocznik: 2022
• Tom: Economics of Sustainability
• Strony: 307--341

Twórcy

autor

Elisa Bocchialini

• University of Florence, Italy

autor

Federica Ielasi

• University of Florence, Italy

Bibliografia

• Basile, I., Braga, M. D., & Ferrari, P. (2019). Asset management e investitori istituzionali. Milano: Pearson.
• Bauer, R., Koedijk, K., & Otten, R. (2005). International evidence on ethical mutual fund performance and investment style. Journal of Banking and Finance, 29(7), 1751-1767.
• Bello, Z. Y. (2005). Socially responsible investing and portfolio diversification. The Journal of Financial Research, 28(1), 41-57. https://doi.org/10.1111/j.1475-6803.2005.00113.x
• Black, B. S. (1992). Agents watching agents: The promise of institutional investor voice. UCLA Law Review, 39, 811-893.
• Boffo, R., & Patalano, R. (2020). ESG investing: Practices, progress and challenges. Paris: OECD.
• Climate Bonds Initiative [CBI]. (2016). Bonds and climate change. The state of the market in 2016. Retrieved from https://www.climatebonds.net/files/files/CBI%20 State%20of%20the%20Market%202016%20A4.pdf
• CONSOB. (2020a). Report on financial investments of Italian households. Behavioural attitudes and approaches. Retrieved from https://www.consob.it/documents/46180/ 46181/rf2020.pdf/ccfe7ad2-810f-4490-bd7e-413daa24c391
• CONSOB. (2020b). Financial advisor-investor relationship. Mirroring survey on sustainability and investments (Statistics and Analyses). Retrieved from https:// www.consob.it/web/consob-and-its-activities/report-mirroring
• Das, P. K., & Rao, S. P. U. (2014). Performance persistence in socially responsible mutual funds. International Journal of Economics and Business Research, 8(4), 490-503.
• Davis, E. P., & Steil, B. (2001). Institutional investors. Cambridge, MA: The MIT Press.
• Del Giudice, A. (2019). La finanza sostenibile: strategie, mercato e investitori istituzionali. Torino: Giappichelli Editore.
• Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (Text with EEA relevance). Official Journal of the European Union, L 173/349. Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/ PDF/?uri=CELEX:32014L0065
• Directive 2014/95/EU of the European Parliament and the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups. Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0095
• Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs). Official Journal of the European Union, L 354/37. Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016L2341
• Eccles, R. G., & Klimenko, S. (2019, May-June). The investor revolution, Harvard Business Review. Retrieved from https://hbr.org/2019/05/the-investor-revolution
• Eccles, R. G., & Serafeim, G. (2013, May). The performance frontier. Innovating for a sustainable strategy, Harvard Business Review. Retrieved from https://hbr.org/ 2013/05/the-performance-frontier-innovating-for-a-sustainable-strategy
• Edelman. (2020). Trust Barometer Special Report: Institutional Investors. Retrieved from https://www.edelman.com/research/2020-edelman-trust-barometer-special-report-institutional-investors
• European Commission. (2016). Investment funds. EU laws and initiatives relating to collective investment funds. Retrieved from https://ec.europa.eu/info/business-economy-euro/growth-and-investment/investment-funds_en
• Eurosif. (2018). European SRI Study 2018. Brussels: Author. Retrieved from https:// www.eurosif.org/wp-content/uploads/2021/10/European-SRI-2018-Study.pdf
• Gantchev, N. (2013). The costs of shareholder activism: Evidence from a sequential decision model. Journal of Financial Economics, 107(3), 610-631. https://doi.org/ 10.1016/j.jfineco.2012.09.007
• Gilson, R. J., & Gordon, J. N. (2013). The agency costs of agency capitalism: Activist investors and the revaluation of governance rights. Columbia Law Review, 54. Retrieved from https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1054 &context=faculty_scholarship
• Global Sustainable Investment Alliance [GSIA]. (2018). Global Sustainable Investment Review. Retrieved from http://www.gsi-alliance.org/wp-content/uploads/2021/08/ GSIR-20201.pdf
• In, F., Kim, M., Park, R. J., Kim, S., & Kim, T. S. (2014). Competition of socially responsible and conventional mutual funds and its impact on fund performance. Journal of Banking & Finance, 44, 160-176. https://doi.org/10.1016/j.jbankfin. 2014.03.030
• Kreander, N., Gray, R. H., Power, D. M., & Sinclair, C. D. (2005). Evaluating the performance of ethical and non-ethical funds: A matched-pair analysis. Journal of Business Finance & Accounting, 32(7-8), 1465-1493. https://doi.org/10.1111/j. 0306-686X.2005.00636.x
• Mercer. (2020). Investing in the future. European Asset Allocation Insights 2020. Retrieved from https://www.mercer.com/content/dam/mercer/attachments/global/gl-2020-investmentforums-london-agenda-european-asset-allocation-insights-2020.pdf
• Mishkin, F., & Eakins, S. (2015). Financial markets and institutions. London: Pearson.
• Nicholls, M. (2015, February). Special report ESG: Carbon risk, a changing climate. London: IPE, Retrieved from https://www.ipe.com/special-report-esg-carbon-risk-a-changing-climate/10006437.article
• OECD. (2017). Investment governance and the integration of environmental, social and governance factors. Paris: OECD Publishing.
• Onado, M. (2016). Economia e regolamentazione del Sistema finanziario. Bologna: Il Mulino.
• PRI. (2015). Fiduciary duty in the 21st century. London: Author. Retrieved from https:// www.unpri.org/download?ac=1378
• PRI. (2019). Reporting framework 2020, November. London: Author. Retrieved from https://dwtyzx6upklss.cloudfront.net/Uploads/q/c/a/02a._sg_cc_2020_80624.pdf
• Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector. Official Journal of the European Union, 317, 9.12.2019. Retrieved from http://data. europa.eu/eli/reg/2019/2088/oj
• Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, Official Journal of the European Union, 198, 22.6.2020. Retrieved from http://data.europa.eu/eli/reg/2020/852/oj
• Renneboog, L., Ter Horst, J., & Zhang, C. (2008a). Socially responsible investments: Institutional aspects, performance, and investor behaviour. Journal of Banking and Finance, 32, 1723-1742. https://doi.org/10.1016/j.jbankfin.2007.12.039
• Renneboog, L., Ter Horst, J., & Zhang, C. (2008b). The price of ethics and stakeholder governance: The performance of socially responsible mutual funds. Journal of Corporate Finance, 14, 302-322. https://doi.org/10.1016/j.jcorpfin.2008.03.009
• Saunders, A., & Cornett, M. M. (2019). Financial markets and institutions. New York, NJ: McGrawHill.
• Serafeim, G., & Yoon, A. (2017). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697-1724.
• United Nations. (2015). Transforming our world: The 2030 Agenda for sustainable development (A/RES/70/1). Retrieved from https://sdgs.un.org/publications/transform ing-our-world-2030-agenda-sustainable-development-17981
• US SIF. (2018). Sustainable and responsible investing. Washington, DC: Author. Retrieved from https://www.ussif.org/files/Trends/Trends%202018%20executive% 20summary%20FINAL.pdf
• Vigeo Eiris Rating. (2016, October). Green, social and ethical funds in Europe. Retrieved from https://ecodes.org/documentos/Green-Social-and-Ethical-funds.pdf
• Willis Towers Watson. (2012). Thematic investing - how we see the world. London: Author. Retrieved from https://www.thinkingaheadinstitute.org/research-papers/ thematic-investing-how-we-see-the-world/