Landier, Augustin; Lovo, Stefano M. - 2020
are subject to a search friction, an ESG fund can raise assets and improve social welfare despite the selfishness of all … agents. The presence of the ESG fund forces companies to partially internalize externalities. We derive the fund's optimal … friction is strong. We also show that the ESG fund can take advantage of the supply-chain network: It can amplify its impact by …