ESG-focused hedge fund activism

Derwis Dilek
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Derwis Dilek: Institute for Law and Regulation of Digitalisation, University of Marburg, Marburg, Germany

Economic Analysis Letters, 2023, vol. 2, issue 4, 1-6

Abstract: Investment funds are increasingly focusing on ESG issues, seeking to contribute to improving environmental, social, and governance concerns. ESG-focused investing involves promoting good ESG performance and may result in a decrease in expected financial returns. This may lead to a conflict between solely profit-focused shareholders and ESG-focused investors, who may respond accordingly. As such, a firm's ESG commitment may trigger several events that can affect the stock price. A firm's ESG commitment may increase its stock price; however, the end of such commitment may also positively affect the stock price. Hedge funds may consider this in their activism which may reshape the way hedge funds target firms and influence their actions accordingly.

Keywords: ESG; stock price; systematic risk; hedge fund; activism (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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