Open Access Journal Article

ESG-focused hedge fund activism

by Derwis Dilek a,*
a
Institute for Law and Regulation of Digitalisation, University of Marburg, Marburg, Germany
*
Author to whom correspondence should be addressed.
EAL  2023, 35; 2(4), 35; https://doi.org/10.58567/eal02040001
Received: 13 March 2023 / Accepted: 8 July 2023 / Published Online: 17 July 2023
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Abstract

Investment funds are increasingly focusing on ESG issues, seeking to contribute to improving environmental, social, and governance concerns. ESG-focused investing involves promoting good ESG performance and may result in a decrease in expected financial returns. This may lead to a conflict between solely profit-focused shareholders and ESG-focused investors, who may respond accordingly. As such, a firm's ESG commitment may trigger several events that can affect the stock price. A firm's ESG commitment may increase its stock price; however, the end of such commitment may also positively affect the stock price. Hedge funds may consider this in their activism which may reshape the way hedge funds target firms and influence their actions accordingly.

Keywords: ESG; stock price; systematic risk; hedge fund; activism;
Copyright: © 2023 by Dilek. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

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ACS Style
Dilek, D. ESG-focused hedge fund activism. Economic Analysis Letters, 2023, 2, 35. https://doi.org/10.58567/eal02040001
AMA Style
Dilek D. ESG-focused hedge fund activism. Economic Analysis Letters; 2023, 2(4):35. https://doi.org/10.58567/eal02040001
Chicago/Turabian Style
Dilek, Derwis 2023. "ESG-focused hedge fund activism" Economic Analysis Letters 2, no.4:35. https://doi.org/10.58567/eal02040001
APA style
Dilek, D. (2023). ESG-focused hedge fund activism. Economic Analysis Letters, 2(4), 35. https://doi.org/10.58567/eal02040001

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References

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