Adoption of Green Investing by Institutional Investors: A European Survey

This document reviews the concept of green investing and reports the results of a European survey of investment management professionnals.

Author(s):

Noel Amenc

Professor of finance and director of development at EDHEC Business SchoolDirector of EDHEC-Risk Institute

Felix Goltz

Head of applied research at EDHEC-Risk Institute.

Lin Tang

Research analyst at EDHEC-Risk Institute.

The objective is to provide background on industry and academic research into green investing and assess the views and uses of green investing. Our survey shows that green investing is a significant movement in which survey respondents are heavily involved. Nearly 90% of respondents consider environmental protection an investment theme and the same percentage plans to do more green investing in the future. The most popular green theme is climate change. We also find that investors define green investing in different ways; inconsistent definitions and terminology are the result. Likewise, survey results show that the main obstacle to green investing is the lack of credible standards for defining and assessing green investments. Survey results also show that social responsibility (followed by financial performance) is the driving force behind green investment. External constraints are a less important reason for taking environmental criteria into consideration. That financial performance is a force behind green investing raises the question of empirical validation of whether green investing in fact delivers attractive returns, as research into the performance of green investing has had mixed results.

Type: EDHEC Publication
Date: le 05/11/2010
Research Cluster : Finance

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