Green Tilts

Pástor, Luboš, Robert Stambaugh and Lucian Taylor
Authors registered in the RePEc Author Service: Lubos Pastor

No 18219, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We estimate financial institutions' portfolio tilts related to stocks' environmental, social, and governance (ESG) characteristics. From 2012 to 2023, ESG-related tilts consistently total about 6% of the investment industry's assets and rise from 17% to 27% of institutions' total portfolio tilts. Significant ESG tilts arise from the choice of stocks held and, especially, the weights on stocks held. The largest institutions tilt increasingly toward green stocks, while other institutions and households tilt increasingly brown. Divestment from brown stocks is typically partial rather than full, even for individual mutual funds. UNPRI signatories and European institutions tilt greener; banks tilt browner.

Keywords: ESG (search for similar items in EconPapers)
JEL-codes: G11 G23 (search for similar items in EconPapers)
Date: 2023-06
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Journal Article: Green tilts (2025)
Working Paper: Green Tilts (2023)
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