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Study: Social Issue Investing Does Not Increase Shareholder Value

Environmental, social, and governance investing is associated with lower shareholder value, according to a new study by Tracie Woidtke, head of the finance department at UT’s Haslam College of Business.

woidtke_pictureWhile examining the role of state and municipal pension funds as activist investors, Woidtke found the S&P 500 index firms targeted with social-issue proposals by the New York state pension fund had a 21 percent lower firm value, and a 91 percent lower industry-adjusted firm value, than all other firm years in her sample.

 “Shareholders see little benefit from focus on issues like political spending, employment rights, or environmental sustainability within a company,” said Woidtke. “This has become a really hot topic with the current focus on ESG investing.”

Continue reading at tntoday.utk.edu.