Sustainable Investing

Pástor, Luboš, Robert F. Stambaugh and Lucian Taylor

No 19746, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We review the literature on sustainable investing, focusing on financial effects. First, we examine the effects of investor tastes on portfolio tilts and asset prices in a simple equilibrium setting. We establish novel connections, including a direct relation between the green portfolio tilt and the greenium. We also relate our framework to prior modeling of divestment. Finally, we review evidence related to the main concepts from our theoretical analysis, including the greenium, green tilts, climate risk, and investor tastes.

Keywords: ESG (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 G23 Q5 (search for similar items in EconPapers)
Date: 2024-12
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