Nice guys with cold feet: The cost of responsible investing in the bond markets

Bastien Drut ()

No 09-034.RS, Working Papers CEB from Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB)

Abstract: The aim of this paper is to measure the cost of investing responsibly for different risk aversion levels by taking the example of green sovereign bond portfolios. We show that for developed countries, the cost of being a nice guy is lower if you have cold feet while this is the contrary for emerging countries. It implies that managers of Socially Responsible Investment (SRI) funds should gauge investor’s risk aversion prior to evaluating the “SRI cost”, this cost being null in some cases.

Keywords: Climate Change; Environmental Performance Index; Responsible Investing; Risk Aversion; Portfolio Selection; Socially Responsible Investment; Sovereign Bonds. (search for similar items in EconPapers)
JEL-codes: G11 G15 Q59 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-upt
Date: 2009-09
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http://www.solvay.edu/EN/Research/Bernheim/documents/wp09034.pdf First version, 2009 (application/pdf)

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Persistent link: http://EconPapers.repec.org/RePEc:sol:wpaper:09-034

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