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Sustainability 2016, 8(10), 1078;

ESG Issues among Fund Managers—Factors and Motives

Laureate Online Education, University of Liverpool Online Management Programmes, 1101 BH Amsterdam, The Netherlands
Deusto Business School, University of Deusto, Avda de las Universidades 24, 48007 Bilbao, Spain
Author to whom correspondence should be addressed.
Academic Editor: Yongrok Choi
Received: 24 May 2016 / Revised: 9 September 2016 / Accepted: 18 October 2016 / Published: 24 October 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
Full-Text   |   PDF [254 KB, uploaded 24 October 2016]


This paper investigates the motives, behavior, and characteristics shaping mutual fund managers’ willingness to incorporate Environmental, Social and Governance (ESG) issues into investment decision making. Using survey evidence from fund managers from five different countries, we demonstrate that this predisposition is the stronger, the shorter their average forecasting horizon and the higher their level of reliance on business risk in portfolio management is. We also find that the propensity to incorporate ESG factors is positively related to an increasing level of risk aversion, an increasing importance of salary change and senior management approval/disapproval as motivating factors as well as length of professional experience in current fund and increasing significance of assessment by superiors in remuneration. Overall, our evidence suggests that ESG diligence among fund managers serves mainly as a method for mitigating risk and is typically motivated by herding; it is much less important as a tool for additional value creation. The prevalent use of ESG criteria in mitigating risk is in contrast with traditional approach, but it is in line with behavioral finance theory. Additionally, our results also show a strong difference in the length of the forecasting horizon between continental European and Anglo-Saxon fund managers. View Full-Text
Keywords: fund managers; institutional investors; ESG investing; investment behavior; behavioral finance; asset management; survey fund managers; institutional investors; ESG investing; investment behavior; behavioral finance; asset management; survey
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC 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.

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