The road to net zero: a fund flow investigation

Louisa Chen and Koji Takahashi

No 1220, BIS Working Papers from Bank for International Settlements

Abstract: We analyze how U.S. green and brown energy equity mutual funds and ETFs respond to public attention on climate change from 2006 to 2022. Our findings indicate that green fund inflows consistently increased, peaking in 2020 in reaction to climate news, while brown fund inflows steadily declined. This shift toward green investments may discourage brown investments and help mitigate the negative impacts of climate news on stock market and industry production growth. The pace of transition from brown to green funds aligns with changes in U.S. climate policy, with a faster transition associated with positive stock market performance and industry production growth.

Keywords: green and brown fund flows; climate change news; evolving transition; pace of transition (search for similar items in EconPapers)
JEL-codes: G11 G23 Q43 Q54 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-ene and nep-env
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