Finance seminar - Professor Vidhan Goyal - HKSUT

A seminar by Professor Vidhan Goyal from HKSUT

Title: Doing Good by Doing Nothing? Passive Ownership and Environmental Performance

Abstract: The paper examines how passive ownership shapes firms' environmental performance. Exploiting the staggered creation of 55 equity indexes across 30 countries, index inclusion provides an exogenous shock to benchmark-tracking ownership. Following inclusion, environmental scores increase and carbon emissions decline, especially among carbon-intensive firms. The evidence supports a demand-elasticity channel: greater benchmark-tracking ownership dampens stock-price reactions to earnings announcements and weakens earnings-based performance pressure. Consistent with this mechanism, capital expenditures and green patenting increase while profitability declines. Our results show that passive investors can promote decarbonization precisely by trading less on earnings news.

For further information, please contact RSFAS Seminars.

All information collected by the University is governed by the ANU Privacy Policy.