The cost of committing environmental sin

Principal Investigator: Isaac Otchere, Finance
Project Title: The Cost of Committing Environmental Sin
Funder: SSHRC Insight Development

In recent years, environmental concerns and social norms have influenced individual’s preferences for sustainable investing. Consequently, a growing number of institutional investors integrate sustainability considerations in their investment decisions. Over the last two decades, the Norwegian Government Pension Fund-­Global (NGPF-­G), the world’s largest sovereign wealth fund (SWF) with a special focus on environmental and ethical investing, has dropped many firms, including Canadian companies, from its investment portfolio over carbon emission concerns. Despite the increased number of firms that have been excluded by the NGPF­-G, the consequences of divestment on the affected firms and the effectiveness of the exclusion decision in changing the behaviour of these firms have not been systematically analyzed. This research will take up these issues by examining the performance of the excluded firms.