ESG Issues among Fund Managers—Factors and Motives
Abstract
:1. Introduction
2. ESG and Fund Managers—Review of the Literature
2.1. ESG and Protection against the Risk
2.2. ESG and Herding Behavior
2.3. ESG and Shareholder Value Creation
3. Research Methods
4. Data Description
5. Determinants of Predisposition to Incorporate ESG Issues into Investment Decision Making among Fund Managers
6. Discussion
7. Conclusions
Acknowledgments
Author Contributions
Conflicts of Interest
Appendix A
- Q14a: Fundamental analysis
- Q14b: Technical analysis
- Q14c: Beta as a measure of risk
- Q14d: Volatility of return
- Q14e: Business risk
- Q14f: Discussion with colleagues
- Q14g: Views of fund’s senior management
- Q14h: Views of fund’s participants/clients
- Q14i: Behavior of other market players
- Q14j: Statements of industry leaders
- Q14k: Statements of economic leaders
- Q14l: Statements of government leaders
- Q19a: Absolute fund performance
- Q19b: Relative fund performance
- Q19c: Assessment by superiors
- Q19d: Assessment by colleagues
- Q19e: Business development of the asset management company
- Q20a: Salary change
- Q20b: Position change (promotion/demotion)
- Q20c: Loss of job
- Q20d: Senior management approval/disapproval
- Q20e: Client’s approval/disapproval
- Q20f: Personal reputation
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ALL | US | CAN | UK | ES | PL | |
---|---|---|---|---|---|---|
Number of questionnaires | 113 | 23 | 21 | 20 | 27 | 22 |
Managers with substantial predisposition to incorporate ESG issues into investment decision making (in %) (Q1) * | 40.7 | 65.0 | 38.1 | 45.0 | 14.8 | 45.5 |
Median age (in years) | 36.9 | 36.0 | 35.8 | 32.3 | 41.3 | 37.6 |
Women (in %) | 40.7 | 39.1 | 42.9 | 55.0 | 40.7 | 27.3 |
Managers with at least master grade (in %) | 62.8 | 60.9 | 28.6 | 45.0 | 77.8 | 95.5 |
Median professional experience (in years) | 9.6 | 10.4 | 7.1 | 7.0 | 14.3 | 6.8 |
Median asset management company size (thousands of millions of EUR) | 12.6 | 15.8 | 12.0 | 10.5 | 21.6 | 3.6 |
Median assets under personal management (millions of EUR) | 209.1 | 406.3 | 175.0 | 118.8 | 437.5 | 62.5 |
Managers with forecasting horizon longer than 12 months (in %) | 15.0 | 4.3 | 0.0 | 5.0 | 37.0 | 22.7 |
Managers with strong focus on fundamental analysis (in %) (Q14a) * | 71.7 | 82.6 | 47.6 | 45.0 | 85.2 | 90.9 |
Managers with strong focus on technical analysis (in %) (Q14b) * | 51.3 | 78.3 | 52.4 | 50.0 | 3.7 | 81.8 |
Managers with strong focus on discussion with colleagues (in %) (Q14f) * | 39.8 | 60.9 | 61.9 | 35.0 | 0.0 | 50.0 |
Managers with strong focus on views of fund’s senior management (in %) (Q14g) * | 44.2 | 69.6 | 47.6 | 45.0 | 11.1 | 54.5 |
Managers with strong focus on views of fund’s participants/clients (in %) (Q14h) * | 38.9 | 65.2 | 47.6 | 55.0 | 3.7 | 31.8 |
Managers with strong focus on behavior of other market players in investment (in %) (Q14i) * | 47.8 | 69.6 | 42.9 | 50.0 | 22.2 | 59.1 |
Managers with high risk aversion (in %) (Q15) ** | 24.8 | 26.1 | 38.1 | 25.0 | 22.2 | 13.6 |
Managers strongly motivated by approval/disapproval of fund’s senior management (in %) (Q20d) *** | 46.0 | 56.5 | 52.4 | 55.0 | 7.4 | 68.2 |
Managers strongly motivated by approval/disapproval of fund’s participants/clients (in %) (Q20e) *** | 65.5 | 78.3 | 38.1 | 55.0 | 70.4 | 81.8 |
Question No | Variables | ALL | US | CAN | UK | ES | PL |
---|---|---|---|---|---|---|---|
Q2 | Gender | 0.037 | −0.021 | 0.351 | 0.091 | −0.268 | −0.074 |
Q3 | Age | −0.177 * | 0.018 | 0.123 | −0.171 | −0.024 | −0.263 |
Q4 | Educational level | 0.162 * | 0.544 *** | 0.506 ** | 0.052 | 0.352 * | −0.027 |
Q5 | Professional experience in asset management in general (in years) | −0.073 | 0.236 | 0.130 | −0.152 | 0.078 | −0.153 |
Q6 | Professional experience in current fund (in years) | 0.218 ** | 0.482 ** | 0.251 | −0.157 | 0.405 ** | −0.173 |
Q7 | Average working hours per week | −0.085 | −0.208 | −0.184 | 0.141 | 0.156 | −0.370 * |
Q8 | Average number of hours per week for data procurement and research 1 | 0.137 | 0.128 | 0.435 ** | 0.045 | 0.017 | 0.026 |
Q9 | Type of fund managed 2 | −0.195 ** | 0.047 | −0.462 ** | 0.168 | 0.094 | −0.179 |
Q10 | Major investment segment 3 | 0.163 * | 0.445 ** | −0.206 | 0.184 | 0.316 | −0.134 |
Q11 | Company’s total assets under management (thousands of millions of EUR) | −0.106 | 0.405 * | 0.054 | −0.236 | 0.255 | −0.249 |
Q12 | Assets under personal management (millions of EUR) | 0.060 | 0.553 *** | 0.158 | 0.077 | 0.465 ** | −0.234 |
Q13 | Length of forecasting horizon in investment decision making | −0.355 *** | −0.291 | 0.002 | −0.007 | 0.158 | −0.373 * |
Question No | Variables | ALL | US | CAN | UK | ES | PL |
---|---|---|---|---|---|---|---|
Q14 | Characteristics of Investment decision making process: | ||||||
Q14a | - Importance of fundamental analysis | 0.146 | 0.166 | 0.553 *** | 0.297 | −0.092 | 0.129 |
Q14b | - Importance of technical analysis | 0.384 *** | 0.362 * | 0.546 ** | −0.014 | 0.080 | 0.070 |
Q14c | - Importance of Beta as a measure of risk | 0.460 *** | 0.481 *** | 0.697 *** | 0.280 | 0.373 * | 0.046 |
Q14d | - Importance of volatility of return | 0.349 *** | 0.267 | 0.826 *** | 0.600 *** | −0.271 | −0.133 |
Q14e | - Importance of business risk | 0.560 *** | 0.528 *** | 0.906 *** | 0.530 ** | 0.458 ** | 0.229 |
Q14f | - Importance of discussions with colleagues | 0.382 *** | 0.572 *** | 0.573 *** | 0.567 *** | −0.339 * | −0.030 |
Q14g | - Importance of views of fund’s senior management | 0.431 *** | 0.540 *** | 0.770 *** | 0.336 | −0.100 | 0.084 |
Q14h | - Importance of views of fund’s participants/client | 0.476 *** | 0.470 ** | 0.781 *** | 0.319 | 0.087 | 0.079 |
Q14i | - Importance of behavior of other market players | 0.308 *** | 0.754 *** | 0.870 *** | 0.415 * | −0.385 ** | −0.314 |
Q14j | - Importance of statements of industry leaders | 0.425 *** | 0.594 *** | 0.719 *** | 0.440 * | 0.065 | −0.052 |
Q14k | - Importance of statements of economic leaders | 0.362 *** | 0.543 *** | 0.765 *** | 0.255 | −0.232 | −0.131 |
Q14l | - Importance of statements of government leaders | 0.397 *** | 0.644 *** | 0.897 *** | 0.137 | −0.043 | −0.064 |
Q15 | Level of risk aversion | 0.323 *** | 0.276 | 0.733 *** | 0.447 ** | 0.250 | −0.051 |
Q16 | Level of loss aversion 1 | 0.432 *** | 0.641 *** | 0.641 *** | 0.027 | 0.257 | 0.138 |
Q17 | Length of information processing horizon 2 | 0.011 * | 0.440 ** | 0.204 | −0.025 | −0.181 | 0.112 |
Q18 | Length of endurance horizon in loss making position (pressure for immediate results) 2 | −0.249 *** | 0.079 | 0.059 | −0.072 | −0.104 | −0.252 |
Question No | Variables | ALL | US | CAN | UK | ES | PL |
---|---|---|---|---|---|---|---|
Q19 | Characteristics of performance based remuneration: | ||||||
Q19a | - Importance of absolute fund performance | 0.364 *** | 0.616 *** | 0.579 *** | 0.006 | 0.528 *** | −0.018 |
Q19b | - Importance of relative fund performance | 0.183 * | 0.577 *** | 0.463 ** | 0.034 | −0.227 | 0.203 |
Q19c | - Importance of assessment by superiors | 0.189 ** | 0.488 ** | 0.188 | 0.306 | −0.051 | −0.350 |
Q19d | - Importance of assessment by colleagues | 0.367 *** | 0.832 *** | 0.505 ** | 0.368 | −0.337 * | −0.392 * |
Q19e | - Importance of business development of the asset management company | 0.322 *** | 0.760 *** | 0.646 *** | 0.279 | −0.168 | −0.210 |
Q20 | Motivators to achieve superior investment performance/avoid bad performance 1: | ||||||
Q20a | - Importance of salary change | 0.488 *** | 0.520 ** | 0.566 *** | 0.227 | 0.413 ** | 0.477 ** |
Q20b | - Importance of position change (promotion/demotion) | 0.442 *** | 0.495 ** | 0.710 *** | 0.088 | 0.314 | 0.362 * |
Q20c | - Importance of possible job loss | 0.404 *** | 0.297 | 0.538 ** | −0.098 | 0.372 * | 0.270 |
Q20d | - Importance of senior management approval/disapproval | 0.479 *** | 0.616 *** | 0.440 ** | 0.515** | 0.306 | 0.243 |
Q20e | - Importance of client’s approval/disapproval | 0.292 *** | 0.486 ** | 0.596 *** | 0.128 | −0.256 | 0.377 * |
Q20f | - Importance of personal reputation | 0.196 ** | 0.429 ** | 0.259 | 0.413 * | −0.514 *** | 0.118 |
Model (1)—Only “Subjective” Factors | Model (2)—Only “Objective” Factors | Model (3)—“Subjective” and “Objective” Factors | |||||||
---|---|---|---|---|---|---|---|---|---|
Coefficient | Standard Error | p-Value | Coefficient | Standard Error | p-Value | Coefficient | Standard Error | p-Value | |
Longer forecasting horizon (Q13) | −0.278 *** | 0.065 | 0.000 | −0.291 *** | 0.073 | 0.000 | |||
Increasing level of reliance on Beta (Q14c) | 0.002 | 0.104 | 0.986 | −0.020 | 0.110 | 0.855 | |||
Increasing level of reliance on business risk (Q14e) | 0.469 *** | 0.101 | 0.000 | 0.438 *** | 0.107 | 0.000 | |||
Increasing level of reliance on views of fund’s participants/client (Q14h) | −0.006 | 0.095 | 0.950 | −0.038 | 0.102 | 0.710 | |||
Increasing level of reliance on behavior of other market players (Q14i) | −0.058 | 0.088 | 0.511 | 0.019 | 0.101 | 0.849 | |||
Rising level of risk aversion (Q15) | 0.210 ** | 0.090 | 0.021 | 0.219 ** | 0.093 | 0.020 | |||
Rising level of loss aversion (Q16) | 0.163 * | 0.085 | 0.058 | 0.096 | 0.092 | 0.297 | |||
Increasing importance of salary change as motivator (Q20a) | 0.150 | 0.092 | 0.105 | 0.178 * | 0.095 | 0.065 | |||
Increasing importance of senior management approval/disapproval as motivator (Q20d) | 0.172 | 0.104 | 0.102 | 0.206 * | 0.109 | 0.062 | |||
Increasing importance of client’s approval/disapproval as motivator (Q20e) | 0.038 | 0.099 | 0.706 | 0.028 | 0.113 | 0.805 | |||
Increasing importance of personal reputation as motivator (Q20f) | −0.110 | 0.115 | 0.339 | −0.085 | 0.129 | 0.512 | |||
Rising age (Q3) | −0.196 ** | 0.098 | 0.047 | −0.050 | 0.081 | 0.538 | |||
Rising educational level (Q4) | 0.125 | 0.107 | 0.246 | 0.049 | 0.089 | 0.585 | |||
Longer professional experience in current fund (Q6) | 0.178 * | 0.091 | 0.053 | 0.138* | 0.072 | 0.059 | |||
Type of fund managed rising with funds other than mutual (Q9) | −0.396 | 0.270 | 0.145 | −0.121 | 0.227 | 0.594 | |||
Major investment segment rising with diminishing risk (Q10) | 0.218 * | 0.125 | 0.085 | 0.039 | 0.103 | 0.703 | |||
Rising importance of relative fund performance in remuneration (Q19b) | 0.217 * | 0.121 | 0.075 | 0.025 | 0.110 | 0.822 | |||
Rising importance of assessment by superiors in remuneration (Q19c) | 0.108 | 0.133 | 0.421 | 0.187 * | 0.112 | 0.097 | |||
Country dummies | Yes | Yes | Yes | ||||||
R-squared | 0.582 | 0.240 | 0.613 | ||||||
Adjusted R-squared | 0.531 | 0.174 | 0.539 | ||||||
ANOVA F | 11.581 *** | 3.617 *** | 7.297 *** |
© 2016 by the authors; licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC-BY) license (http://creativecommons.org/licenses/by/4.0/).
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Przychodzen, J.; Gómez-Bezares, F.; Przychodzen, W.; Larreina, M. ESG Issues among Fund Managers—Factors and Motives. Sustainability 2016, 8, 1078. https://doi.org/10.3390/su8101078
Przychodzen J, Gómez-Bezares F, Przychodzen W, Larreina M. ESG Issues among Fund Managers—Factors and Motives. Sustainability. 2016; 8(10):1078. https://doi.org/10.3390/su8101078
Chicago/Turabian StylePrzychodzen, Justyna, Fernando Gómez-Bezares, Wojciech Przychodzen, and Mikel Larreina. 2016. "ESG Issues among Fund Managers—Factors and Motives" Sustainability 8, no. 10: 1078. https://doi.org/10.3390/su8101078