Who goes green: Reducing mutual fund emissions and its consequences

Abstract Ameliorating global warming has been touted as one of the most pressing issues of our time. We investigate whether there are mutual fund families that purposefully decrease their portfolios’ exposure to greenhouse gas emissions, and find families that sign the Principles for Responsible Investment (PRI) have significantly lower portfolio emissions after signing the initiative than do non-signatory families. There are two mechanisms via which this reduction occurs: access to the resources offered by the PRI (networks, information, education, etc.), and families with pro-environmental stakeholders. Families that reduce their emissions experience significantly increased fund flow.