Responsible Asset Managers

Please join us for a seminar talk by Prof Xuemin (Sterling) Yan on the paper "Responsible Asset Managers" by Dr. Ke Shen, Prof. Xuemin (Sterling) Yan and Dr. Haibei Zhao.

Presenter

Dr. Yan is a Perella Chair and Professor of Finance at Lehigh University. He obtained a B.A. in finance from Renmin University of China in 1991 and a Ph.D. in finance from the University of Iowa in 2001. Prior to joining Lehigh University in 2019, Dr. Yan spent 18 years at the University of Missouri, as an assistant, associate, and full professor of finance. He was the Richard G. Miller Professor of Finance from 2008 to 2019. Dr. Yan's main research interests include asset pricing, institutional investors, mutual funds, hedge funds, short selling, and liquidity. Dr. Yan has published extensively in top academic journals including Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Management Science, Journal of Financial and Quantitative Analysis, and Journal of Accounting Research. He is an associate editor of Journal of Financial Research and Asia-Pacific Journal of Financial Studies. Dr. Yan's research has been cited in Business Week, The Economist, Financial Times, and The Wall Street Journal.

Abstract

Previous studies of responsible investing focus on the ESG profile of the stocks held by mutual funds. In this paper we examine the ESG profile of the fund management company. Fund management companies who act responsibly are responsible fund managers. We find that equity mutual funds experience significant outflows following extreme negative ESG news about their fund management companies, suggesting that fund investors value ESG. Funds managed by responsible fund managers tend to hold more responsible stocks; this finding, however, is sensitive to whether we control for other fund characteristics. We find no evidence that PRI (Principles for Responsible Investment) signatories act more responsibly than non-PRI signatories. In fact, PRI signatories exhibit more ESG risk incidents than non-PRI signatories. Our paper provides fresh evidence on the extent to which fund investors, and particularly fund managers, care about ESG and whether fund managers invest responsibly or engage in "green washing".