Sustainability labels matter

Christopher Kolling and Timo Busch

Finance Research Letters, 2025, vol. 73, issue C

Abstract: We investigate whether funds holding a sustainability label, exhibit better sustainability performance compared to unlabeled funds. Using a sample of over 150 public equity funds awarded the FNG-Label, we assess their performance regarding carbon emissions, SDG scores, and ESG ratings. We use matching methods to compare labeled funds with different control groups, namely conventional as well as with sustainable peers without a label. The results show that labeled funds have superior sustainability attributes, particularly in terms of carbon emissions and SDG contributions. However, the differences in classical ESG scores, which in our case focus on financial materiality, are less pronounced.

Keywords: Sustainability labels; Equity funds; ESG criteria; SDG contributions; Greenwashing (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016386

DOI: 10.1016/j.frl.2024.106609

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