A common claim holds that investment treaties reduce the willingness of host countries to regulate foreign-owned, environmentally-stranded, investments. A counter-argument is that the treaties can yield incentives for environmentally friendly replacement investment. This paper examines these...

Using global share ownership data from 2002 to 2021, we find that investors’ aggregate carbon sensitivity, i.e. their tendency to divest from more polluting firms, increases with per capita GDP. Especially investment managers, who invest on behalf of their clients, and investors with longer...