Does Socially Responsible Investing Change Firm Behavior?

Davidson Heath, Daniele Macciocchi. Roni Michaely, Matthew C. Ringgenberg

2023 | Academic | Companies, Impact Investing, Sustainable Investing

SRI funds select firms with lower pollution, more board diversity, higher employee satisfaction, and better workplace safety. Yet both in the cross-section and using an exogenous shock to SRI capital, we find SRI funds do not significantly change firm behavior.