Ethical window dressing: SRI funds are as good as their word

Fernando Muñoz, Cristina Ortiz and Luis Vicente

Finance Research Letters, 2022, vol. 49, issue C

Abstract: In this research, we tested the existence of ethical window dressing in the Socially Responsible Investment (SRI) domestic equity funds registered in the US market. For this purpose, we compared the environmental, social, and corporate governance (ESG) attributes of disclosed and undisclosed portfolios. We reject that the ESG portfolio image is significantly better in reporting months than in non-reporting months. Examining portfolio trading based on different proxies, we found residual signals of ethical window dressing. None of these signals correspond to easy-to-interpret information. Thus, SRI funds do not manipulate the disclosed ESG image to attract money flows.

Keywords: Ethical window dressing; ESG portfolio scores; SRI mutual funds (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003336

DOI: 10.1016/j.frl.2022.103109

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