We investigate carbon risk in global equity prices. We develop a measure of carbon risk using industry standard databases and study return differences between brown and green firms. We observe two opposing effects: Brown firms are associated with higher average returns, while decreases in the...

Recent equilibrium models predict a negative expected return premium in green stocks due toa non-financial utility for green investors, the so-called Equity Greenium, and in consequencea separation of the capital market. We derive a modified pricing relationship for equity futuresas a first...

We analyze an emerging sustainable trend in asset management: the decarbonization of institutional portfolios. By using broad institutional ownership data, we show that investors exhibit herding behavior in the sense of decarbonization. They are inclined to follow their own or other investors’...

The demand for sustainable investments is growing worldwide. As a result, the DAX 50 ESG was introduced in March 2020 as the first ESG index by the German stock exchange. It is promoted as the new standard for German sustainable investments. We are the first to comprehensively examine the...

We analyze an emerging sustainable trend in asset management: the decarbonization of institutional portfolios. By using broad institutional ownership data we show that investors exhibit herding behavior in the sense of decarbonization. They are inclined to follow their own or other investors'...