Understanding ESG disclosures: Financial Motives, Performance and Greenwashing: Da Chen, University of Lancaster

Event Date: 8 October 2025

Speaker: Da Chen (Lancaster University Manangement School)

Venue: CW404B

Time: 2pm

Abstract:

We document a strong fund flow effect following ESG disclosures in mutual fund shareholder letters, primarily driven by opportunistic disclosures that emphasise return maximisation. This behaviour reflects fund managers’ financially driven (“value”) motivations, rather than ethically driven (“values”) motives such as impact-focused disclosures. Funds benefit from this informational advantage and earn superior returns only prior to the Paris Agreement, when ESG awareness was limited, and are associated with lower future ESG scores. However, fund ESG disclosure presents a trade-off: while attracting inflows, it may also heighten investor scrutiny and lead to outflows if financial performance falls short.

Published: 9 October 2025