In this seminar, Professor Starks talked about considerations regarding environment, social and governance (ESG) investing, starting with the differentiation in investor motivations: financial risk and return considerations (i.e., ESG value), nonpecuniary preferences (i.e., ESG values), or a combination of the two.
From a high level perspective, she addressed questions regarding investment approaches, such as whether to employ a negative screening approach or a positive tilt to the portfolio; how to think about integrating ESG principles into the investment process as well as engaging firm management on ESG principles; the role of third-party ESG ratings; the questions surrounding ESG portfolio disclosures and regulatory requirements, and the evidence that exists on the effects and effectiveness of these issues.