Investing for Long-Term Value Creation

Dirk Schoenmaker and Willem Schramade

No 13175, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In the transition to a sustainable economy, companies are increasingly adopting the goal of long-term value creation, which integrates financial, social and environmental value. However, investors struggle to invest for long-term value and perform the social function of finance. Traditional investment approaches, based on the neo-classical paradigm of efficient markets and portfolio theory, only capture financial value in their financial risk and return space. Attempts at ESG integration are typically too shallow to overcome this problem. In this paper, we examine the set of issues that make this problem so stubborn and we outline the contours of an alternative paradigm that is better able to pursue long-term value creation. Its elements include short investment chains, active management that assesses companies’ transition preparedness, concentrated portfolios, and deep engagement.

Keywords: Active investment; Fundamental analysis; Engagement; Esg factors; Adaptive markets hypothesis (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 Q01 (search for similar items in EconPapers)
Date: 2018-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP13175 (application/pdf)

Related works:
Journal Article: Investing for long-term value creation (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13175

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP13175

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().