Do ESG Mutual Funds Deliver on Their Promises?

August 2023
ELR 10630
Quinn Curtis, Jill Fisch, and Adriana Z. Robertson

Corporations have received growing criticism for their role in climate change, perpetuating racial and gender inequality, and other pressing social issues. In response, shareholders are increasingly focusing on environmental, social, and corporate governance (ESG) criteria in selecting investments, and asset managers are responding by offering a growing number of ESG mutual funds. But are these funds giving investors what they promise? This Article provides a unique picture of the current ESG environment with an eye to informing regulatory policy. It finds that ESG funds offer their investors increased ESG exposure, vote their shares differently from non-ESG funds, and are more supportive of ESG principles; and that they do so without increasing costs or reducing returns.

Quinn Curtis is The Honorable Albert V. Bryan Jr. ’50 Research Professor of Law and Associate Dean for Curricular Programs at the University of Virginia School of Law. Jill Fisch is the Saul A. Fox Distinguished Professor of Business Law and Co-Director of the Institute for Law and Economics at the University of Pennsylvania Carey Law School. Adriana Z. Robertson is the Donald N. Pritzker Professor of Business Law at the University of Chicago Law School.

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Do ESG Mutual Funds Deliver on Their Promises?

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