Template-Type: ReDIF-Paper 1.0
Author-Name: Giulio Cornelli
Author-X-Name-First: Giulio
Author-X-Name-Last: Cornelli
Author-Name: Leonardo Gambacorta
Author-X-Name-First: Leonardo
Author-X-Name-Last: Gambacorta
Author-Name: Tommaso Oliviero
Author-X-Name-First: Tommaso
Author-X-Name-Last: Oliviero
Author-Name: Koji Takahashi 
Author-X-Name-First: Koji
Author-X-Name-Last: Takahashi
Title: Mutual funds and climate news
Abstract: In the context of rising public awareness of climate change, the proliferation of green mutual funds reflects expectations of their contribution to a sustainable economic transition. This paper investigates the effect of climate news on mutual funds flows, and on their portfolio allocation decisions. Using detailed flow- and holdings- level data, we observe that heightening climate news results in significantly larger capital inflows into green funds versus their non-green counterparts. Furthermore, we show that, in reaction to climate news, green funds decrease their exposure to high-polluting firms relative to low-polluting firms more than non-green funds do. These results suggest that increasing public awareness boosts capital re-allocation towards green funds and this, in turn, potentially fosters investment relocation towards more environmentally-friendly companies.
Creation-Date: 2025-02
File-URL: https://www.bis.org/publ/work1243.htm
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1243.htm
File-Format: text/html
Number: 1243
Keywords: mutual funds, climate news, green finance
Classification-JEL: G11, G23, Q54
Handle: RePEc:bis:biswps:1243