Are ESG Funds More Transparent?

I explore whether managers of Environmental, Social, and Governance (ESG) funds differ in their disclosure behavior vis-a-vis conventional fund managers. Consistent with ESG fund investors having longer investment horizons, I find that ESG portfolio managers engage in less opportunistic disclosure activities than their conventional fund managers counterparts. Interestingly, managers of ESG and conventional funds have similar portfolio turnovers, despite the conventional wisdom that ESG investors are more long-term oriented. Notably, I find no evidence that investment management firms endogenously assign portfolio managers to ESG and conventional funds based on managers’ characteristics. Overall, my results suggest that the preferences of ESG investors affect ESG managers' willingness to engage in opportunistic trading without significantly affecting their real portfolio decisions