The reaction to CSR controversies by institutional investors

Alda, Me cedes
A icle
The eac ion o CSR con o e sies by ins i u ional in es o s
BRQ Business Resea ch Qua e ly
P o ided in Coope a ion wi h:
Asociación Cien í ica de Economía y Di ección de Emp esas (ACEDE), Mad id
Sugges ed Ci a ion: Alda, Me cedes (2025) : The eac ion o CSR con o e sies by ins i u ional
in es o s, BRQ Business Resea ch Qua e ly, ISSN 2340-9444, Sage Publishing, London, Vol. 28, Iss.
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In oduc ion
The g ow h o Socially Responsible In es men (SRI)
among ins i u ional in es o s has inc eased he demand o
in es ee- i ms’ Co po a e Social Responsibili y (CSR)
in o ma ion, including CSR con o e sial e en s (Volle o
e al., 2019).
CSR con o e sies a e ac ions o inciden s expe ienced
by i ms ha can nega i ely impac s akeholde s and he
en i onmen (Sus ainaly ics, 2014). Con o e sies a e
usually classi ied as en i onmen al, social, o go e nance
(ESG) e en s due o hei di e si y; o example, oxic
was e spills a e en i onmen al con o e sies, human- igh s
abuses a e social con o e sies, and accoun ing auds o
co up CEOs a e go e nance con o e sies, among many
o he s (Nugen e al., 2021). Va ious CSR- i m con o e -
sies ha e d awn media a en ion in ecen decades (En on,
Heal hSou h, Pa mala , Shell, Siemens AG, Tyco, o
Wo ldCom con o e sies, among o he s) due o hei la ge
and di e se consequences on mul iple s akeholde s. The
ollowing p ess elease on En on’s con o e sy exempli-
ies an accoun ing con o e sy:
The Secu i ies and Exchange Commission oday ini ia ed
ci il cha ges agains Kenne h L. Lay, o me Chai man and
Chie Execu i e O ice o En on Co p., o his ole in a wide-
anging scheme o de aud by alsi ying En on’s publicly
epo ed inancial esul s and making alse and misleading
public ep esen a ions abou En on’s business pe o mance
and inancial condi ion. (SEC, Washing on, DC, 8July 2004)1
The demand o in es ee- i ms’ CSR con o e sial
in o ma ion by ins i u ional in es o s e eals an inc easing
The eac ion o CSR con o e sies
by ins i u ional in es o s
Me cedes Alda
Abs ac
Despi e he impo ance o Co po a e Social Responsibili y (CSR) i m con o e sies, li le is known abou hei e ec
on ins i u ional in es o s. We s udy he mos impo an ins i u ional in es o s wo ldwide: pension unds and mu ual
unds. The sepa a ion be ween und managemen and owne ship aises he need o examine how und manage s
and und pa icipan s eac o in es ee- i ms’ CSR con o e sies. Conside ing he con en ional/Socially Responsible
In es men (SRI- und na u e, we ind ha in es ee- i ms’ con o e sies di e sely a ec und pe o mance, depending
on he con o e sy ype. Fu he mo e, pa icipan s and manage s o SRI pension and SRI mu ual unds display a passi e
beha io owa d con o e sies. These a i udes a e consis en wi h endu ing beha io and con inui y in es men
policies, such as amending/con olling CSR- i m con o e sies. In con as , con en ional pension- und and con en ional
mu ual- und pa icipan s seem guided by adi ional in es men ules o deal wi h unsa is ac o y si ua ions and espond
o con o e sies a e manage ial decisions ega ding hese e en s wi h nega i e eac ions. Finally, i ms de eloping
CSR-engagemen s a egies may so en ma ke and manage ial eac ions owa d con o e sies. None heless, symbolic
CSR-engagemen p ac ices a ouse pa icipan s’ esponses.
JEL CLASSIFICATION: G11, G23, M14
Keywo ds
CSR con o e sy, ins i u ional pa icipan , in es ee i m, mu ual und, pension und
Facul y o Economics and Business, Uni e si y o Za agoza, Za agoza,
Spain
Co esponding au ho :
Me cedes Alda, Facul y o Economics and Business, Uni e si y o
Za agoza, C/G an Vía, 2, C.P. 50005 Za agoza, Spain.
Email: [email p o ec ed]
1110588BRQ 0010.1177/23409444221110588Business Resea ch Qua e lyAlda
esea ch-a icle2022
Regula Pape
16 Business Resea ch Qua e ly 28(1)
ac i e sha eholding in in es ee i ms, amending less ac i e
pas beha io (Jansson, 2013). Thus, he inc easing con-
ce n and commi men o ins i u ional in es o s owa d
hese issues make i necessa y o examine he epe cus-
sions o CSR- i m con o e sies on hese in es o s.
Al hough p e ious li e a u e analyzes he e ec o CSR-
i m s a egies on ins i u ional in es o s (Chen e al., 2020;
E hemjam s & Huang, 2019), he speci ic impac o CSR
con o e sies on ins i u ional in es o s has no been ana-
lyzed, as a as we a e awa e, since i is accep ed ha con-
o e sies a ec sha eholde s ia p ices (Flamme e al.,
2021). Mo eo e , li le is known abou he eac ions o
ins i u ional in es o s as majo ma ke playe s owa d
CSR- i m con o e sies. As a esul , his a icle con ib-
u es o ill hese gaps and i s s udies he in luence o CSR
con o e sies on ins i u ional in es o s and he a i ude o
und pa icipan s (i.e., und sha eholde s o und in es o s)
and und manage s owa d hese e en s.
Ins i u ional in es o s comp ise he la ges sha e o
in es men ac i i y globally (E hemjam s & Huang, 2019),
highligh ing he ins i u ional owne ship o mu ual and
pension unds wi h mo e han €61.6 illion and €34 il-
lion o global asse s unde managemen in 2021, espec-
i ely (INVERCO, 2022). Thus, pension and mu ual unds
a e he mos impo an ins i u ional in es o s wo ldwide.
Mu ual and pension unds p esen simila i ies in se e al
aspec s: bo h in es on behal o and o he bes in e es o
und bene icia ies, a e p o essionally managed, a e able o
in es in a b oad ange o asse s, sha e in es men -asse
uni e ses, po olio-managemen p inciples a e simila ,
and manage s’ emune a ion is based on managemen ees
cha ged as a pe cen age o asse s unde managemen (Del
Gue cio & Tkac, 2002; Sandbe g, 2013). Howe e , hei
na u e, pu poses, and clien ele a e di e en (Del Gue cio
& Tkac, 2002). On he one hand, pension unds a e no pa
o in es men unds (as mu ual unds) because pension-
und liabili ies a e long- e m and p esen igid condi ions
o he encashmen (In e na ional Mone a y Fund [IMF],
2004). Speci ically, pension- und pa icipan s canno col-
lec pension sa ings un il hey each ce ain ( e i emen )
age (IMF, 2004; O ganisa ion o Economic Co-ope a ion
and De elopmen [OECD], 2005). Hence, pension unds
a e cha ac e ized by he managemen o la ge e i emen
sa ings wi h long- e m o ien a ion, a social na u e, and
und sa ings canno be eco e ed un il e i emen 2 (Himick
& Audousse -Coulie , 2016; Sandbe g, 2013). In addi ion,
pension unds a e mo e no m-cons ained due o la ge
sc u iny exposu e by he gene al public (Cox e al., 2004).
On he o he hand, mu ual unds a e he main channel o
e ail in es o s o pa icipa e in capi al ma ke s wi h a
sho - e m ision (Goyal & Wahal, 2008).
Acco dingly, ins i u ional in es o s canno be ea ed as
a homogeneous g oup and di e se ca ego ies can be dis in-
guished acco ding o he in es men ho izon (Hoskisson
e al., 2002). Unlike p e ious wo ks, we sepa a ely analyze
pension and mu ual unds and s udy whe he pension- und
cha ac e is ics (long- e m in es men ho izon, social
na u e, and la ge in es men cons ain s) o igina e di e -
en ial ins i u ional-sha eholding beha io ega ding CSR-
i m con o e sies, leading pension unds o la ge ac i ism
and engagemen in in es ee i ms wi h con o e sies.
Fu he mo e, he impo ance o s udying pension and
mu ual unds conside ing CSR in es ee- i ms’ con o e -
sies is mul iple. Fi s , ins i u ional in es o s a e “uni e sal
owne s” ha ep esen he whole capi al ma ke , ha is,
hei in e es s di e om hose o o he sha eholde s,
especially hose concen a ed in a i m (Chen e al., 2020).
Chen e al. (2020) a gue ha ins i u ional unds a e exposed
o a ious con o e sy isks due o he in es men in mul-
iple s ocks (based on po olio-di e si ica ion p inciples);
hence, ins i u ional unds a e conce ned wi h he e ec s o
po en ial con o e sies in mul iple in es ee i ms. Second,
as und managemen is sepa a e om und owne ship,
agency p oblems may a ise when manage ial ac ions wi h
ega d o CSR- i m con o e sies a e no aligned wi h he
alues o und-pa icipan s. P e ious s udies ind ha pen-
sion- und pa icipan s p esen mo e endu ing beha io and
highe loyal y o he selec ed unds han mu ual- und pa -
icipan s, mainly due o pe sis ing p e e ences o e ime
and some p io i iza ion o non- inancial aspec s (Sialm
e al., 2015). The e o e, CSR- i m con o e sies migh
o igina e lowe eac ions among pension- und pa ici-
pan s. Despi e his, he und loyal y may be due o no skills
o condemn i m misconduc s, limi ed a en ion associa ed
wi h he long- e m na u e, o disin es men es ic ions
(Ba ne , 2014). Finally, he limi ed e idence on his opic
o mu ual unds and especially pension unds lends sup-
po o ou analysis.
On he o he hand, he inclusion o ESG c i e ia among
pension and mu ual unds eaches con en ional- und and
SRI- und segmen s, making i is necessa y o analyze bo h
segmen s. We may expec ha he s a egic- und p io i ies
may se he esponse o CSR con o e sies. SRI unds
migh a oid con o e sial i ms o a g ea e ex en (Jin &
Han, 2018). Ne e heless, he SRI e olu ion om an SRI
niche o a mains eam SRI has gene a ed di e se ESG c i-
e ia among con en ional and SRI unds (Re elli, 2017).
Con en ional unds a e inc easingly conside ing ESG c i-
e ia and some SRI unds ha e diminished he ESG s and-
a ds o p o ide simila pe o mance o con en ional unds,
esul ing in low ESG-sco ed SRI unds (Ba ne &
Salomon, 2006; Re elli, 2017). The ESG-s anda d a ie y
may p oduce SRI ambigui ies and di e se ESG- und
sco es among SRI and con en ional unds (Na h, 2021).
Hence, he e ec o and eac ion o in es ee- i ms’ con o-
e sies may be di e se be ween con en ional and SRI
unds in pension- und and mu ual- und indus ies.
This s udy ocuses on UK mu ual and pension unds
because hese UK indus ies p esen dis inc i e ea u es
ha make hem ele an o ou analysis, p o iding new
Alda 17
e idence ou side he US ma ke . Fi s , he Uni ed Kingdom
is he second wo ldwide and he la ges Eu opean ma ke
in asse s unde managemen (GBP 9.4 illion asse s in
2020), he managemen -indus y size is almos i e imes
he Uni ed Kingdom’s economy (almos 500% o UK
g oss domes ic p oduc [GDP] in 2020), and ins i u ional
in es o s managed 80% o hese asse s in 2020 (The
In es men Associa ion, 2021). Speci ically, he UK pen-
sion- und indus y is he second global pension- und ma -
ke wi h mo e han €2.6 illion unde managemen and
118.5% o he UK GDP in 2020 (INVERCO, 2022; OECD,
2021). On he o he hand, he UK mu ual- und ma ke
managed a ound 25% o he Eu opean unds, eaching
GBP 1.4 illion asse s in 2020 (The In es men
Associa ion, 2021). Second, he UK pension sys em
belongs o he Anglo-Saxon wel a e model, cha ac e ized
by non-la ge public pensions, which signi ican ly enhanced
he g ow h o p i a e pension unds. As a esul , pension
unds a e he main sa ings ehicle o UK households
(56.5% o UK household sa ings a e in es ed in pension
unds and insu ances—INVERCO, 2021). Besides, mu ual
unds a e he second ins i u ional in es men ehicle o
UK household asse s (5.8% in 2020—INVERCO, 2021).
Fu he mo e, he Uni ed Kingdom is he leading
Eu opean coun y in SRI wi h GBP 72 billion in esponsi-
ble in es men unds (Global Sus ainable In es men
Alliance [GSIA], 2021). The Uni ed Kingdom is a pionee
in de eloping egula ion on sus ainable and esponsible
in es men in Eu ope, including he disclosu e o ESG
issues by pension unds (UKSIF, 2018; UK S a u o y
Ins umen s No. 988 Pensions, 2018), and he Pensions
Schemes Ac 2021 was modi ied o conside Pa is Goals in
he und in es men s a egy (GSIA, 2021). In addi ion,
he Uni ed Kingdom se s ex a s ewa dship codes o asse
managemen . The UK S ewa dship Code 2020 in oduces
highe s anda ds han hose es ablished by he EU
Sha eholde Righ s Di ec i e (Eu opean Union, 2017),
demanding desc ip ion o engagemen policy as well as
ou come-based epo ing o he o ing and engagemen
ac ions (GSIA, 2021). The impo ance o hese UK und
indus ies and he la ge conce n abou ESG issues p o ide
us an oppo uni y o explo e he consequences and eac-
ions o UK mu ual and pension unds owa d CSR- i m
con o e sies.
Among he p o use li e a u e on CSR con o e sial
e en s, his a icle is pa o he li e a u e ha ela es CSR
con o e sies and sha eholde s (Bea y e al., 2013; Sane,
2019; Xu e al., 2016; among o he s). Speci ically, his
s udy ela es o he limi ed wo ks examining he ela ion
be ween ins i u ional in es o s and in es ee- i ms’ CSR
(Chen e al., 2020; E hemjam s & Huang, 2019; among
o he s). Unlike p e ious ins i u ional-in es o s udies
ocusing on i m’s side, we examine ins i u ional-in es-
o s’ side. We hen analyze his ela ion om a new pe -
spec i e, con ibu ing o disen angle he consequences o
in es ee- i ms’ con o e sial inciden s o ins i u ional
in es o s and hei conduc s owa d hese e en s. Thus, he
aim o his a icle is h ee old. Fi s , we s udy he impac o
mul iple in es ee- i ms’ CSR con o e sies on he pe o -
mance o UK domes ic-equi y pension and mu ual unds
(con en ional and SRI). Ou s udy inco po a es con o e -
sies in he h ee ESG dimensions (en i onmen al, social,
and go e nance) o ill he li e a u e gap o conside ing
isola ed ESG dimensions. Second, al hough ins i u ional
in es o s a e inc easingly conside ing non- inancial ma -
e s in he und in es men , he a i udes o und manage s
and und pa icipan s owa d in es ee- i m con o e sies
ha e no been p e iously analyzed, as a as we know. We
hen sepa a ely analyze und-manage s’ and und-pa ici-
pan s’ eac ions owa d in es ee- i m con o e sies. In
addi ion, we examine whe he he exis ence o con o e -
sies in in es ee i ms ha de elop CSR-engagemen s a -
egies can mi iga e and p e en nega i e e ec s o
con o e sies on und pe o mance, manage ial decisions,
and pa icipan s’ eac ions (Li e al., 2019). These analyses
con ibu e o he li e a u e abou ins i u ional-in es o
p e e ences ega ding CSR issues and comple e he pa ial
iew abou he e ec o in es ee- i m con o e sies on
ins i u ional in es o s.
The es o he a icle is o ganized as ollows. Sec ion
“Reac ions owa d CSR- i m con o e sies” con ains he
li e a u e e iew and esea ch hypo heses. Sec ion “Da a,
sample cons uc ion, and a iables” desc ibes he da a,
sample cons uc ion, and a iables. Sec ion “Resul s” con-
ains he esul s. The las sec ion concludes.
Li e a u e e iew and hypo heses
The impac o CSR- i m con o e sies on und
pe o mance
In line wi h agency heo y, und manage s should handle
esou ces in he bes in e es o bene icia ies (Sandbe g,
2013). Howe e , li le is known abou he e ec o CSR
con o e sies on und pa icipan s and hei inancial in e -
es s. This si ua ion may be due o a la e inclusion o CSR
con o e sies in CSR policies, conside ing hem by he
Global Repo ing Ini ia i e (GRI) since 2002 and he
Uni ed Na ions Global Compac (UNGC) p inciples since
2004 (Blanc e al., 2019).
Acco dingly, he inancial impac o CSR con o e sies
is s ill unclea (Aouadi & Ma sa , 2018; Ni ino e al., 2021).
Some s udies ind ha CSR con o e sies nega i ely a ec
pe o mance (Capelle-Blanca d & Pe i , 2019; K üge ,
2015; Ni ino e al., 2021). Cui and Doche y (2020) ind
nega i e inancial ou comes wi h con o e sial ESG news
and, pa icula ly, wi h ansien ins i u ional in es o s.
Howe e , Aouadi and Ma sa (2018) ind posi i e e ec o
some ESG con o e sies (execu i e-boa d compensa ion,
inside -dealing, labo -di e si y, and p oduc -quali y) on he
18 Business Resea ch Qua e ly 28(1)
pe o mance o high-a en ion i ms. Agle e al. (1999) ind
ha e en s ela ed o p ima y i m s akeholde s (employees
and cus ome s) a e mo e salien han hose ela ed o mo e
dis an s akeholde s, such as he en i onmen o local com-
muni ies. The lack o clea empi ical e idence sugges s ha
he e ec o CSR in es ee- i m con o e sies on und pe -
o mance may depend on he ype o con o e sy.
Conside ing hese p emises, we hypo hesize he ollowing:
H1. CSR con o e sies ha e di e se impac on und
pe o mance, depending on he con o e sy ype.
Reac ions owa d CSR- i m con o e sies
The managemen and he owne ship o pension and mu ual
unds a e sepa a ed; he e o e, he esponses o und man-
age s and und pa icipan s o CSR- i m con o e sies may
di e .
On he one hand, he eac ion o und pa icipan s may
be based on he ac ha ins i u ional pa icipan s use ESG
in o ma ion o a g ea e ex en han o he in es o s (Cui &
Doche y, 2020). The main mechanism o assess he eac-
ion o und pa icipan s owa d in es ee- i m con o e -
sies is o analyze und lows (Cui & Doche y, 2020).
P e ious e idence shows mixed eac ions. K üge (2015)
and Capelle-Blanca d and Pe i (2019) indica e ha in es-
o s eac nega i ely o con o e sial ESG news, especially
owa d conce ns ela ed o employees, he en i onmen ,
and communi ies. Ha zma k and Sussman (2019) epo
ou lows/in lows in unds wi h poo /good ESG a ings.
Howe e , Bea y e al. (2013) ind g ea e in es men du -
ing scandal pe iods due o dis o ed signals. Ba ne (2014)
indica es limi ed abili y o condemn i m con o e sies. In
addi ion, und-pa icipan s may no eac o con o e sies
when con o e sies a e mino , he e is in o ma ion o e -
load, con o e sies a e unno iced o dis ega ded by soci-
e y, o hese e en s all ou side hei diligence (Aouadi &
Ma sa , 2018). Tha is, he impac on lows may also
depend on ac o s such as he ime pe iod o he sample.
Taking in o accoun hese conside a ions, we hypo hesize
he ollowing:
H2. CSR- i m con o e sies a ec und lows di e sely
depending on he con o e sy ype.
On he o he hand, und manage s can modi y he und
sha eholding in in es ee i ms o deal wi h unsa is ac o y
si ua ions (McCahe y e al., 2016). Hi schman (1970)
highligh s ha unpleased ins i u ional in es o s wi h a
po olio i m can lea e he i m (i.e., exi decision), bu
hey can also engage wi h he i m managemen o in e -
ene di ec ly h ough sha eholding ac i ism. No singe
e al. (2019) ind lowe ins i u ional owne ship wi h ESG
conce ns. In con as , McCahe y e al. (2016) ind ha
ins i u ional in es o s use sha eholding ac i ism a he
han exi decisions wi h non-sa is ac o y e en s in in es ee
i ms, especially by long- e m ins i u ional in es o s such
as pension unds. Consequen ly, we may expec ha pen-
sion unds dec ease und sha eholding a e con o e sies
o a lowe ex en . In line wi h his e idence, we p opose
he ollowing:
H3. Mu ual- und manage s dec ease he und sha e-
holding in in es ee i ms wi h con o e sies o a g ea e
ex en han pension- und manage s.
Manage ial eac ions o con o e sies may also in lu-
ence und pa icipan s, ha is, und pa icipan s can eac
o manage ial decisions. Fund pa icipan s know manage-
ial ac ions wi h some delay (Janney & Go e, 2011);
hence, whe he und pa icipan s suppo manage ial deci-
sions, we may expec s able und lows some ime la e .
Tamayo-To es e al. (2019) conclude ha supply-chain
con o e sies inc ease i m-sus ainabili y p ac ices 2 yea s
la e , mainly due o eac i e beha io o ins i u ional in es-
o s (Aouadi & Ma sa , 2018). Acco dingly, he ou h
hypo hesis conside s po en ial la e eac ions o und pa -
icipan s ( ia und lows) owa d manage ial decisions
made ega ding con o e sies:
H4. Fund pa icipan s eac a e manage ial decisions
wi h ega d o in es ee- i m con o e sies, a ec ing
und lows wi h some delay.
Subs an i e and symbolic engagemen
Some au ho s a gue ha he e ec s o CSR- i m con o-
e sies may be alle ia ed when in es ee i ms ha e
ex ended his o y o ESG p ac ices, such as CSR-
engagemen , educing ma ke o e - eac ions, and massi e
s ock sales (Ni ino e al., 2021). Speci ically, CSR-
engagemen p ac ices a e olun a y CSR- i m ac ions
aken beyond egula ion ha may help o e-es ablish he
i m si ua ion and epu a ion wi h he s akeholde s and he
en i onmen o he p e-con o e sy le el, mi iga ing pe -
o mance de e io a ion (Pa k e al., 2014).
CSR- i m engagemen s a egies a e di ided in o “sym-
bolic” (non- eal) and “subs an i e” ( eal) CSR-engagemen
(Pe ez-Ba es e al., 2012). Symbolic CSR-engagemen
displays ce emonial con o mi y and willingness o de elop
CSR issues, wi hou necessa ily de eloping meaning ul
changes, o example, signing he Uni ed Na ion P inciples
o Responsible In es men (UNPRI) o he UNGC p inci-
ples (Pé ez-Ba es e al., 2012). In con as , subs an i e
CSR-engagemen e e s o eal CSR- i m ac ions ha
en ail changes in business p ocesses and long- e m com-
mi men o CSR, equi ing highe expenses (Li e al.,
2019; Pe ez-Ba es e al., 2012). Ac ions displayed on

Alda 19
CSR epo s published acco ding o GRI guidelines a e
examples o CSR-subs an i e engagemen (Pe ez-Ba es
e al., 2012).
Symbolic and subs an i e CSR-engagemen p ac ices
y o educe nega i e CSR impac s; howe e , he limi ed
s udies on his opic show a gap abou hei in luence on
inancial pe o mance (Li e al., 2019). Flamme (2013)
shows ha long- e m in es o s ob ain be e pe o mance
due o CSR ac i i ies o in es ee i ms. Flamme (2013)
also inds ha subs an i e CSR-engagemen may imp o e
unds’ s abili y when he ma ke conside s i m con o-
e sies as non-usual conduc s. Eccles e al. (2014) ind
highe pe o mance wi h subs an i e CSR-engagemen
policies. Ne e heless, CSR-engagemen ac ions canno
mode a e he nega i e ela ionship be ween con o e sies
and pe o mance when in es o s do no upda e hei
belie s a e ESG news (Ni ino e al., 2021). Fu he mo e,
ESG e en s may ha e no implica ions on pe o mance
when in es o s p io i ize non- inancial aspec s (We he
& Chandle , 2005). The e o e, in es ee- i m con o e -
sies expe ienced a e CSR-engagemen p ac ices may
con inue o ha e a di e se impac on und pe o mance,
depending on he con o e sy ype as well as he in es o
inancial p e e ences.
On he o he hand, symbolic and subs an i e CSR-
engagemen ac ions can mode a e he eac ions o und
pa icipan s o con o e sies (Tamayo-To es e al., 2019).
Li e al. (2019) a gue ha sha eholde s be e dis inguish
be ween symbolic and subs an i e CSR-engagemen han
o he s akeholde s. Sha eholde s usually espond posi-
i ely o symbolic CSR-engagemen wi h mino con o-
e sies because o i s sho -li ed cha ac e (Li e al., 2019).
Ammann e al. (2019) demons a e ha unds wi h good
eco ds on sus ainabili y a ac lows. Howe e , Hawn
e al. (2018) ind limi ed eac ion o sus ainabili y changes.
Conside ing he p e ious e idence, we may expec lowe
und ou lows a e con o e sies in in es ee i ms wi h
symbolic and subs an i e CSR-engagemen . In addi ion,
symbolic and subs an i e CSR-engagemen p ac ices may
in luence manage ial decisions. K üge (2015) a gues ha
ESG e o s enhance manage s’ epu a ion. Flamme e al.
(2021) ind ha ins i u ional- und manage s alue olun-
a y clima e- isk disclosu es and conside engagemen
a he han di es men in i ms disclosing nega i e cli-
ma e- isk in o ma ion.
This p io e idence indica es ha he impac o con o-
e sies on und pe o mance, und pa icipan s’ eac ions,
and und manage s’ decisions may be modi ied due o
CSR-engagemen p ac ices o in es ee i ms. We hen
pose ou las hypo heses:
H5. In es ee- i m con o e sies expe ienced a e CSR-
engagemen (symbolic and subs an i e) di e sely a ec
und pe o mance acco ding o he con o e sy ype.
H6. CSR-engagemen (symbolic and subs an i e) p ac-
ices o in es ee i ms mode a e und ou lows a e
in es ee- i m con o e sies.
H7. Fund manage s do no eac nega i ely o con o-
e sies in i ms wi h CSR-engagemen (symbolic and
subs an i e) p ac ices.
Da a, sample cons uc ion, and
a iables
Ou sample is d awn om se e al sou ces. The pension-
und and mu ual- und da a o all UK domes ic-equi y
unds a e ob ained om Mo nings a Di ec da abase. We
exclude index unds o obus ness and include bo h li e
and dead unds o a oid su i o ship bias. Mo eo e ,
unds ha e a leas 75% o hei holdings in es ed in
s ocks. The samples a e o med o 359 pension unds and
1,008 mu ual unds. Mo nings a da abase dis inguishes
be ween SRI and con en ional unds wi h he “Socially-
conscious” a iable,3 which indica es Yes/No when a und
is a SRI/con en ional und. We ans o m he socially con-
scious a iable in o an SRI dummy by designa ing 1/0
when he socially conscious a iable o Mo nings a labels
Yes/No o iden i y unds as SRI/con en ional unds. As a
esul , ou pension- und sample is di ided in o 28 SRI and
331 con en ional pension unds. The mu ual- und sample
is di ided in o 42 SRI and 966 con en ional mu ual unds.
The und da a include, om Janua y 1999 o No embe
2019, qua e ly po olio holdings (i.e., und-sha eholding
weigh s on in es ee i ms); qua e ly, mon hly, and daily
e u ns; qua e ly To al Ne Asse s (TNA); incep ion da e;
annual u no e a ios; and annual expense a ios. F om
he incep ion da e, we ob ain he und age each qua e
(exp essed in yea s). We also calcula e he qua e ly pe -
cen age und lows.4 Following p e ious ESG and CSR
con o e sy s udies (Cui & Doche y, 2020; Flamme
e al., 2021; Hawn e al., 2018; among o he s), we calcu-
la e he adi ional pe o mance measu e o he ou - ac o
alpha o Ca ha (1997). We ob ain he qua e ly ou - ac-
o alpha wi h 36-mon h e u n olling windows om he
Eu opean isk- ac o s a ailable on F ench’s da a lib a y5
(see Online Appendix 1 o u he de ails). Thus, ou anal-
yses a e es ic ed om Janua y 2002 o No embe 2019.
We collec da a o he po olio holdings om he pen-
sion and mu ual unds analyzed and ob ain ha hese unds
in es in 6,991 dis inc s ocks. Conside ing he 6,991 in es-
ee i ms, we ob ain 15 qua e ly ESG- i m a iables om
Da as eam da abase (in he ESG-Asse 4 ca ego y) om
2002 o 2019 (No embe ). These a iables include he
ESG- i m sco e ( anging om 0—lowes o 1—highes ), 12
CSR- i m con o e sies co e ing he main ca ego ies o he
ESG pilla s, acco ding o Re ini i ,6 a subs an i e CSR-
engagemen a iable (GRI), and a symbolic (UNPRI) CSR-
engagemen a iable (see Table 1 o a ull desc ip ion). To
20 Business Resea ch Qua e ly 28(1)
selec hese a iables, among hose a ailable in he ESG-
Asse 4 ca ego y, we exclude a iables wi h nume ous miss-
ing da a,7 non-a ailable da a, and inac i e a iables. The
con o e sy a iables (excep h ee a iables) a e qua e ly
dummy a iables ha equal 1 when a i m expe iences a
con o e sy a ha qua e and 0 o he wise. The h ee non-
dummy con o e sy a iables (business-e hics, human-
igh s, and accoun ing con o e sies) show he numbe o
con o e sies expe ienced by a i m qua e ly. Thus, we
ans o m hese a iables in o dummies8 o p o ide homo-
genei y be ween a iables (i.e., hese a iables equal 1 i a
i m su e s a con o e sy and 0 o he wise; see Table 1 o
u he de ail).
We ma ch he qua e ly po olio holdings o he 359
pension unds and he 1,008 mu ual unds (ob ained om
Mo nings a ) wi h he qua e ly ESG- i m a iables o he
6,991 i ms ( om Da as eam) om Janua y 2002 o
No embe 2019. Fi s , we use he holding da a o calcula e
ESG- und sco es om ESG- i m sco es. We calcula e he
ESG- und sco e o con ol he ESG s anda ds o SRI and
con en ional unds, gi en ha he mains eam SRI has
gene a ed di e se ESG c i e ia among con en ional and
SRI unds (Ba ne & Salomon, 2006; Re elli, 2017). We
calcula e qua e ly ESG- und sco es as he qua e ly
weigh ed sum o ESG- i m sco es o all in es ee i ms
held by a und and he und po olio-holding weigh s o
all in es ee i ms held by a und each qua e . Second, we
calcula e qua e ly und con o e sies in each con o e sy
ype s udied as he addi ion o all con o e sies expe i-
enced by all in es ee i ms held by a und each qua e .
Finally, we ob ain he OECD-based ecession indica o
o he Uni ed Kingdom om he Fede al Rese e
Economic Da a9 o de ec ecession and expansion pe iods
( he indica o equals 1 in ecessions and 0 o he wise).
Table 1. Desc ip ion o ESG- i m and CSR- i m con o e sy a iables.
Name Desc ip ion Pilla : ca ego y Dummy
ESG sco e Re ini i ’s ESG o e all company sco e based on he sel - epo ed
in o ma ion in he en i onmen al, social, and go e nance pilla s
ESG No
En i onmen al
con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o he en i onmen al impac o i s ope a ions on na u al esou ces
o local communi ies?
En i onmen al Yes (1/0)
Business e hic
con o e sies
Is any con o e sy o he company published in he media linked
o business e hics in gene al, poli ical con ibu ions, o b ibe y and
co up ion?
Social:
Communi y
Yes (1/0)
An i-compe i ion
con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o an i-compe i i e beha io , p ice- ixing, o kickbacks?
Social:
Communi y
Yes (1/0)
B ibe y, co up ion and
aud con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o b ibe y and co up ion, poli ical con ibu ions, imp ope
lobbying, money launde ing, pa allel impo s, o any ax aud?
Social:
Communi y
Yes (1/0)
Consume -complain
con o e sies
Is he company unde he spo ligh o he media because o consume -
complain s o dissa is ac ion di ec ly linked o i s p oduc s o se ices?
Social: P oduc
esponsibili y
Yes (1/0)
Cus ome heal h and
sa e y con o e sies
Is any con o e sy o he company published in he media linked o
cus ome heal h and sa e y?
Social: P oduc
esponsibili y
Yes (1/0)
Responsible ma ke ing
con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o ma ke ing p ac ices?
Social: P oduc
esponsibili y
Yes (1/0)
Wages wo king
condi ion con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o employees, con ac o s, o supplie s due o wage, layo
dispu es, o wo king condi ions?
Social:
wo k o ce
Yes (1/0)
Human- igh s
con o e sies
Is any con o e sy o he company published in he media linked o
human- igh s issues?
Social: Human-
igh s
Yes (1/0)
Accoun ing
con o e sies
Is any con o e sy o he company published in he media linked o
agg essi e o non- anspa en accoun ing issues?
Go e nance:
Sha eholde s
Yes (1/0)
Inside -dealings
con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o inside -dealings and o he sha e p ice manipula ions?
Go e nance:
Sha eholde s
Yes (1/0)
Execu i e compensa ion
con o e sies
Is he company unde he spo ligh o he media because o a con o e sy
linked o high execu i e o boa d compensa ion?
Go e nance:
Managemen
Yes(1/0)
GRI epo guidelines Is he company’s CSR epo published in acco dance wi h he GRI
guidelines?
Go e nance:
CSR s a egy
Yes(1/0)
UNPRI signa o y Has he company signed he UNPRI? Go e nance:
CSR s a egy
Yes (1/0)
Sou ce: Adap ed om Da as eam da abase.
ESG: en i onmen al, social, o go e nance; GRI: Global Repo ing Ini ia i e; CSR: Co po a e Social Responsibili y; UNPRI: Uni ed Na ion P inciples
o Responsible In es men .
Alda 21
Table 2 shows some summa y s a is ics o pension
unds (con en ional and SRI) in Panels A.1–B.1 and
mu ual unds (con en ional and SRI) in Panels A.2–B.2.
Panels A.1–A.2 show ha he ESG- und sco es o pension
and mu ual unds a e 37.15% and 40.29%, on a e age,
espec i ely. The mode a e sco es indica e ha pension
and mu ual unds in es in i ms wi h con o e sies.
Fu he mo e, he ESG sco e is highe in SRI unds han in
con en ional unds (39.04% s 36.92% in pension unds
and 41.53% s 40.19% in mu ual unds). Wi h ega d o
con o e sies, he h ee mos ele an con o e sies o he
i ms held by pension and mu ual unds a e business e h-
ics, b ibe y/co up ion/ aud, and cus ome heal h/sa e y
con o e sies. In con as , he leas common con o e sies
a e accoun ing, inside -dealing, and en i onmen al
con o e sies. In gene al, SRI pension (SRI mu ual) unds
hold highe (lowe ) i m con o e sies han con en ional
pension (mu ual) unds. This shows ha SRI pension unds
may be engaged in ac i e sha eholding o amend and con-
ol i ms wi h con o e sies, consis en wi h he social
na u e o pension unds (Himick & Audousse -Coulie ,
2016; Sandbe g, 2013); howe e , SRI mu ual unds ollow
highe ESG s anda ds. On he o he hand, SRI pension
(mu ual) unds hold i ms wi h highe (lowe ) anspa -
ency, publishing mo e ( ewe ) CSR epo s wi h GRI
guidelines and signing UNPRI p inciples o a g ea e
(lowe ) ex en han in es ee i ms o con en ional pension
(mu ual) unds. These esul s show he inc easing inclu-
sion o ESG c i e ia among con en ional unds and he
di e se ESG s anda ds among unds.
Table 2. Summa y s a is ics.
Panel A: ESG- und sco es and in es ee- i m con o e sies in pension and mu ual unds by und ype
Panel A.1. Pension unds Panel A.2. Mu ual unds
All Con SRI All Con SRI
ESG- und_sco e 0.3715 0.3692 0.3904 0.4029 0.4019 0.4153
En i onmen al_con o e sies 0.3724 0.3469 0.6460 0.4410 0.4497 0.3241
Business_e hics_con o e sies 2.7796 2.7920 0.1408 4.2808 4.3120 3.8657
An i-compe i ion_con o e sies 2.3020 2.2025 3.3703 2.7016 2.7224 2.4242
B ibe y_co up ion_ aud_con o e sies 3.9376 3.7858 5.5674 4.7000 4.7504 4.0281
Consume _complain _con o e sies 1.5920 1.5199 2.3656 2.2194 2.2165 2.2569
Cus ome _heal h_sa e y_con o e sies 2.6781 2.5747 3.7882 3.9755 3.9874 3.8177
Responsible_ma ke ing_con o e sies 1.4559 1.3982 2.0760 1.5633 1.5647 1.5455
Wages/wo king_condi ion_con o e sies 0.8854 0.8426 1.3449 0.9496 0.9577 0.8412
Human_ igh s_con o e sies 0.5301 0.5394 0.0554 0.9547 0.9736 0.7017
Accoun ing_con o e sies 0.0227 0.0196 2.6465 0.3148 0.3142 0.3223
Inside _dealing_con o e sies 0.2651 0.2530 0.3948 0.2867 0.2865 0.2888
Execu i e_compensa ion_con o e sies 1.3369 1.3179 1.5399 1.3353 1.3467 1.1834
GRI- i m_ epo 6.8355 6.5264 10.1542 10.7332 10.8576 9.0746
UNPRI- i m_signa o y 0.1201 0.1107 0.2212 0.3796 0.3815 0.3542
Panel B: Fund cha ac e is ics
Panel B.1. Pension unds Panel B.2. Mu ual unds
Alpha 0.0013 0.0013 0.0018 0.0018 0.0017 0.0020
Re u n 0.0015 0.0016 0.0011 0.0193 0.0193 0.0194
Risk 0.0075 0.0076 0.0074 0.0167 0.0173 0.0072
TNA 6.92 × 1077.12 × 1074.75 × 1073.71 × 1083.87 × 1081.53 × 108
Age (yea s) 10.5929 10.7470 9.1419 14.1178 13.9851 16.3351
Flows 38.7860 42.7173 1.4156 21.8803 23.4228 0.2815
Tu no e _ a io 0.8776 0.8630 1.0087 0.8699 0.8718 0.8495
Expense_ a io 0.0147 0.0148 0.0135 0.0144 0.0143 0.0163
SRI: Socially Responsible In es men ; TNA: To al Ne Asse s; Con : con en ional.
Table 2 shows some summa y s a is ics o all, con en ional (Con ), and SRI pension unds (Panels A.1–B.1) and all, con en ional, and SRI mu ual
unds (Panels A.2–B.2) om 2002 o 2019 (No embe ). Panels A.1/A.2 show he qua e ly a e age o ESG- und sco es, qua e ly a e age numbe
o CSR-con o e sies expe ienced by all in es ee i ms held by pension/mu ual unds, and he a e age numbe o in es ee i ms ollowing GRI
guidelines and signing UNPRI p inciples held by pension/mu ual unds qua e ly. Panel B shows he qua e ly a e age o he main und cha ac e is ics
o pension unds (Panel B.1) and mu ual unds (Panel B.2).
22 Business Resea ch Qua e ly 28(1)
Resul s
This sec ion shows he empi ical esul s o es he hypo h-
eses p oposed. Online Appendix 2 shows he models
applied in he analyses.
The e ec o in es ee- i m con o e sies on
und pe o mance and lows
We s udy he e ec o i m con o e sies on he ou - ac o
alpha (Table 3) and lows (Table 4) o pension unds (Panel
A) and mu ual unds (Panel B). The models a e desc ibed
in Online Appendix 2 (Models A.2.1 and A.2.2). Models
(A.2.1) and (A.2.2) include lagged independen a iables
o a oid endogenei y p oblems. All models a e es ima ed
wi h obus and clus e ed s anda d e o s by und and qua -
e o add ess he e oskedas ici y p oblems and co ela ed
e o s (condi ional on independen a iables) wi hin he
und and ime dimensions. The las ow o Tables 3 and 4
shows he a e age a iance in la ion ac o (VIF) o he
es ima ed coe icien s o assess mul icollinea i y.10
Panel A o Table 3 shows ha he SRI- und na u e and
he ESG- und sco e do no a ec he und pe o mance o
pension unds (non-signi ican SRI-dummy and ESG-
sco e coe icien s). In addi ion, con o e sies di e en ly
a ec pe o mance, in line wi h ou i s hypo hesis (H1).
The con en ional- und pe o mance is nega i ely (posi-
i ely) a ec ed by en i onmen al, an i-compe i ion, and
cus ome -heal h-sa e y ( esponsible-ma ke ing and
human- igh s) con o e sies. On he o he hand, wages/
wo king-condi ions (business-e hics) con o e sies a ec
nega i ely (posi i ely) SRI- und pe o mance. The posi-
i e coe icien s a e consis en wi h he equen o e look
o social misconduc s in a eas such as business e hics o
human- igh s, mainly due o in o ma ion o e load in hese
a eas (Aouadi & Ma sa , 2018). Fu he mo e, he ma ke
ecei es news wi h some delay, and ini ially, some miscon-
duc s seem p o i able, epo ing highe pe o mance
(Bea y e al., 2013). Tha is, he ma ke only penalizes
ce ain con o e sies.
Panel B shows mu ual- und esul s. In acco dance wi h
p e ious SRI mu ual- und s udies (Ba ne & Salomon,
2006; Jin & Han, 2018; among o he s), he SRI- und
na u e nega i ely a ec s pe o mance (signi ican ly nega-
i e SRI-dummy). P e ious s udies ind ha he ESG
s anda ds o SRI unds limi hei in es men uni e se,
p oduce managemen cons ain s, and es ic pe o mance
(Ba ne & Salomon, 2006; Jin & Han, 2018). Fu he mo e,
highe ESG- und sco es dec ease he pe o mance o con-
en ional unds. A highe ESG sco e means mo e es ic-
i e ESG c i e ia, which may cause unde -di e si ica ion,
in es men -oppo uni y losses, and unde pe o mance
(Ba ne & Salomon, 2006; Jin & Han, 2018; Re elli,
2017). Then, con en ional mu ual unds a e no able o
ully in eg a e ex a ESG c i e ia; howe e , he ESG sco e
does no a ec SRI- unds’ pe o mance Wi h ega d o
con o e sies, hese e en s di e sely a ec mu ual- und
pe o mance, consis en wi h H1 and ou pension- und
esul s (Panel A). The con en ional- und pe o mance is
posi i ely (nega i ely) a ec ed by en i onmen al, busi-
ness-e hics, an i-compe i ion, esponsible-ma ke ing, and
accoun ing (b ibe y-co up ion- aud, cus ome -heal h-
sa e y, and wages/wo king-condi ion) con o e sies. On
he o he hand, highe con o e sies in esponsible-ma -
ke ing and human- igh s a eas inc ease he SRI mu ual-
und pe o mance. The posi i e coe icien s a e ound
again in a eas wi h in o ma ion o e load and equen
o e look o hese conduc s, p o iding dis o ed and
delayed signal abou hese con o e sial e en s (Aouadi &
Ma sa , 2018; Bea y e al., 2013).
Ou esul s suppo he di e se inancial impac o CSR
con o e sies ound in p e ious s udies (Aouadi & Ma sa ,
2018; Capelle-Blanca d & Pe i , 2019; K üge , 2015;
Ni ino e al., 2021). Fu he mo e, ega ding H1, we no ice
ha he in luence o CSR con o e sies on pe o mance
depends on he con o e sy ype. Speci ically, con o e -
sies in a eas cha ac e ized by in o ma ion o e load (busi-
ness e hics, esponsible-ma ke ing, and human- igh s)
posi i ely a ec he pe o mance o pension and mu ual
unds, which migh mislead long- e m consequences
(Aouadi & Ma sa , 2018). In con as , cus ome -heal h-
sa e y and wages/wo king-condi ion con o e sies nega-
i ely a ec pe o mance in pension and mu ual unds.
Tha is, he ma ke is conce ned abou con o e sies ela ed
o he wellbeing o p ima y s akeholde s (cus ome s and
employees). Agle e al. (1999) also ind la ge impac o
e en s ela ed o p ima y s akeholde s. Fu he mo e,
unlike Agle e al. (1999), we ind ha con o e sies o
mo e dis an s akeholde s (en i onmen al and social-com-
muni y ca ego ies: business-e hics, an i-compe i ion, and
b ibe y/co up ion/ aud) also a ec pe o mance, excep
in SRI mu ual unds. As a esul , en i onmen al and social
issues o in es ee i ms a e signi ican o pension and
mu ual unds. Ne e heless, i is no iceable ha con o e -
sies ela ed o go e nance issues (sha eholde s: accoun ing
and inside -dealing, and managemen : compensa ion)
seem o be p ac ically unno iced by he ma ke , possibly
because hese a e pe cei ed as in e nal- i m a ai s. In
conclusion, ou e idence does no allow us o ejec H1.
Table 4 shows he in luence o con o e sies on und
lows. Panel A ba ely displays signi ican impac o con-
o e sies on pension- und lows, con a y o ou H2
(CSR- i m con o e sies a ec und lows di e sely
depending on he con o e sy ype). Flows o con en ional
pension unds dec ease wi h mo e en i onmen al and
accoun ing con o e sies (signi ican coe icien s a 10%
and 5% le els, espec i ely). This shows a penal y o und
pa icipan s o holding i ms wi h hese con o e sies.
Howe e , SRI- und lows a e no signi ican ly a ec ed by
con o e sies. In gene al, he esul s o Panel A a e in line
Alda 29
om Da as eam. This sco e anges be ween 0 (no con o-
e sies) and 1 (maximum le el o con o e sies) and
measu es a i m’s exposu e o ESG con o e sies and neg-
a i e e en s e lec ed in global media.13 Nex , we calcula e
he qua e ly ESG- und con o e sy sco e as he qua e ly
weigh ed sum o he ESG-con o e sy sco es o all in es-
ee i ms held by a und and he und-holding weigh s o
all in es ee i ms held by a und qua e ly.
We es ima e Logi Model (A.2.9) o Online Appendix 2
o de elop his analysis. The logi model allows us o ana-
lyze he in luence o he ESG-con o e sy sco e on he
likelihood o su e ing con o e sies by in es ee i ms.
Table A.3.5 o Online Appendix 3 shows he esul s o he
12 con o e sies s udied. Panels A and B shows ha , in
gene al, he p obabili y o su e ing con o e sies by
in es ee i ms o con en ional and SRI pension unds
dec eases wi h highe ESG-con o e sy sco es (nega i e
ESG_con coe icien s). In con as , he p obabili y o su -
e ing con o e sies by in es ee i ms inc eases wi h
highe ESG-con o e sy sco es in con en ional and SRI
mu ual unds (Panels C and D). Ou indings show ha
pension unds in es ing in i ms wi h mo e ESG conce ns
a e able o moni o , suppo , and help i ms o educe he
p obabili y o u u e con o e sial CSR e en s wi h ac i e
sha eholding (E hemjam s & Huang, 2019; López-
I u iaga e al., 2015; Puche a-Ma ínez & Chi a-O ells,
2020). Howe e , he sho e in es men ho izon o mu ual
unds does no allow mu ual unds o con ol CSR con o-
e sies when in es ee i ms ha e a his o y on con o e -
sial e en s.
Finally, size di e ences be ween und samples may
p e en us om making adequa e compa isons. To handle
his po en ial conce n, p e ious li e a u e ea s la ge sam-
ples wi h a ma ching p ocedu e in which he smalle subse
is ma ched wi h simila unds in he la ge und subse ,
educing linea - eg ession p oblems and asymp o ic biases
due o sel -selec ion (Ha zma k & Sussman, 2019; Sane,
2019). Following p e ious li e a u e, we apply he nea es -
neighbo ma ching p ocess o achie e highe balance
be ween samples and a oid biases (Ammann e al., 2019;
Bilbao-Te ol e al., 2017). This me hod ma ches he con-
ol indi iduals o he ea ed g oup wi h he smalles dis-
ance on und cha ac e is ics (size, age, u no e a io,
expense a io, managing company, and in es men a ea14),
disca ding non-ma ched con ol indi iduals (Bilbao-Te ol
e al., 2017; K eande e al., 2005). The simila i y measu e
be ween unds is he p opensi y sco e es ima ed wi h logis-
ic eg ession on he und cha ac e is ics men ioned
(Bilbao-Te ol e al., 2017). Fu he mo e, con ol unds a e
only ma ched once (canno be ma ched mul iple imes) o
build balanced ma ched samples.
We de elop he ma ching p ocess in wo s ages. In he
i s s age, we ma ch mu ual unds and pension unds (con-
side ing he con en ional/SRI na u e). In he second s age,
we ma ch con en ional pension unds wi h SRI pension
unds and con en ional mu ual unds wi h SRI mu ual
unds. The i s ma ching s age p o ides a mo e balanced
mu ual- und sample; speci ically, 359 mu ual unds
ma ched wi h he pension- und sample, di ided in o 331
con en ional and 28 SRI mu ual unds. The second-s age
p ocess p o ides 28 ma ched con en ional pension unds
o he 28 SRI pension unds and 28 ma ched con en ional
mu ual unds o he 28 SRI mu ual unds. Consis en wi h
p e ious s udies, ou ma ched samples imp o e pa ame ic
s a is ical models, showing educed s anda dized bias
ac oss co a ia es (Ammann e al., 2019; Bilbao-Te ol
e al., 2017). We epea he analyses o sec ions “The e ec
o in es ee- i m con o e sies on und pe o mance and
lows,” “Reac ion o und manage s o CSR- i m con o-
e sies,” and “Delayed eac ions o und pa icipan s,” and
ou main conclusions sus ain, showing no conce ns abou
sample-size di e ences ( hese esul s a e no included o
he sake o b e i y and a e a ailable upon eques ).
The in luence o subs an i e and symbolic CSR-
i m engagemen on unds wi h in es ee- i m
con o e sies
In his sec ion, we s udy whe he CSR-engagemen p ac-
ices alle ia e nega i e e ec s o con o e sies (Ni ino
e al., 2021) and/o whe he ma ke s, pa icipan s, and
manage s penalize i ms expe iencing con o e sies a e
CSR-engagemen p ac ices due o insince e beha io . We
es ima e Models (A.2.10)–(A.2.15) o Online Appendix 2
o analyze he e ec o con o e sies on unds when in es-
ee i ms ha e de eloped subs an i e and symbolic
engagemen be o e su e ing con o e sies.
Table 7 shows he in luence o con o e sies wi h sub-
s an i e CSR-engagemen (i.e., de elopmen o CSR- i m
epo s ollowing GRI guidelines) on alpha (Panel A) and
lows (Panel B). Consis en wi h H5, Panel A shows
di e se impac o con o e sies a e subs an i e CSR-
engagemen on alpha. This indica es ha he conclusions
eached wi h he esul s o Table 3 sus ain. Speci ically,
despi e subs an i e CSR-engagemen p ac ices, mos con-
o e sies wi h nega i e/posi i e impac on und pe o -
mance ollow a ec ing pe o mance in he same manne .
None heless, signi ican coe icien s a e lowe in Table 7
han in Table 3, ha is, subs an i e CSR s a egies so en
ma ke eac ions (Tamayo-To es e al., 2019).
Panel B shows he in luence o con o e sies a e sub-
s an i e CSR-engagemen on lows. The spa se eac ion o
und pa icipan s con i ms he passi e beha io o pension-
und and mu ual- und pa icipan s, as we ind in Table 4.
Ne e heless, he nega i e eac ions o con en ional
mu ual- und pa icipan s a e con o e sies disappea wi h
subs an i e CSR-engagemen (Panel B2 o Table 7 s Panel
B o Table 4). Subsequen ly, con en ional mu ual- und pa -
icipan s ely on he accoun abili y o CSR ac ions de el-
oped and published in CSR- i m epo s ollowing GRI

30 Business Resea ch Qua e ly 28(1)
guidelines. This e idence is consis en wi h ou H6. In
addi ion, we canno ejec H6 because subs an i e CSR-
engagemen mode a es und ou lows a e in es ee- i m
con o e sies (nega i e coe icien s a e lowe in Panel B o
Table 7 han in Table 4).
Table 8 shows he e ec o con o e sies a e symbolic
engagemen (i.e., in es ee i ms signing UNPRI p inci-
ples) on pe o mance (Panel A) and lows (Panel B).
Panels A1–A2 co obo a e he di e se e ec o con o e -
sies on pe o mance—e idence ha does no allow us o
ejec H5. None heless, Panel A2 displays ha con o e -
sies expe ienced a e symbolic s a egies ha e less (mo e)
signi ican impac on he pe o mance o con en ional
(SRI) mu ual unds han subs an i e CSR-engagemen
(Panel A2 o Table 7). The lowe cos o symbolic s a e-
gies is posi i ely pe cei ed by he con en ional niche, so -
ening he impac o con o e sies on pe o mance. This is
pa icula ly obse ed in con o e sies wi h commonly
g ea e economic penal ies, such as en i onmen al, cus-
ome -sa e y, o wage con o e sies (non-signi ican o
signi ican ly posi i e coe icien s in Panel A2 o Table 8 s
signi ican ly nega i e coe icien s in Panel A2 o Table 7
and Panel B o Table 3). In con as , he SRI mu ual- und
pe o mance is nega i ely a ec ed by con o e sies a e
symbolic engagemen o a g ea e ex en . The SRI niche
possesses mo e expe ience in ESG issues and pe cei es
symbolic engagemen as hypoc i e p omises a he han
eal changes.
Panel B o Table 8 displays highe eac ion o und pa -
icipan s owa d con o e sies a e symbolic engagemen
han a e subs an i e engagemen (Panel B o Table 7).
This esul may be explained because i ms publicize mo e
he symbolic engagemen o d aw a en ion on g een-
washing s a egies (Walke & Wan, 2011). Pa icipan s
Table 7. E ec o subs an i e CSR-engagemen (GRI) wi h con o e sies on und pe o mance and lows.
Panel A: Alpha (dependen a iable) Panel B: Flows (dependen a iable)
Panel A.1:
Pension unds
Panel A.2:
Mu ual unds
Panel B.1:
Pension unds
Panel B.2:
Mu ual unds
Con SRI Con SRI Con SRI Con SRI
ESG-sco e –1 0.0007
(0.26)
0.0044
(0.51)
–0.0034***
(–2.67)
–0.0074*
(–1.97)
–0.4243
(–0.85)
0.7356
(0.45)
–0.0215
(–0.81)
0.0155
(0.23)
En i onmen al –1 × GRI –2 –0.0001
(–1.6)
–0.0001
(–0.7)
0.0001***
(4.34)
0.0001
(1.46)
–0.0112**
(–1.97)
0.0202
(0.73)
0.0001
(0.13)
–0.0005
(–0.37)
Business_e hics –1 × GRI –2 0.0001**
(2.17)
0.0001***
(3.02)
0.000**
(2.24)
0.0000
(0.59)
0.0003
(0.06)
0.0305
(1.54)
0.0005**
(2.04)
–0.0005
(–0.76)
An i-compe i ion –1 × GRI –2 0.0000
(–1.02)
–0.0001
(–1.46)
0.000***
(3.88)
0.0000
(–0.09)
0.0011
(0.27)
–0.0051
(–0.37)
0.0001
(0.33)
–0.0008
(–0.62)
B ibe y –1 × GRI –2 0.0000
(–1.6)
0.0000
(0.26)
–0.00001**
(–2.4)
0.0000
(–0.17)
0.0032
(0.82)
–0.0054
(–0.37)
–0.0002
(–0.93)
0.0008
(0.82)
Cons_complain –1 × GRI –2 0.0000
(0.44)
0.0000
(–1.35)
0.0000*
(1.73)
0.0000
(–0.97)
–0.0001
(–0.03)
–0.001
(–0.08)
–0.0003
(–1.4)
0.0006
(1.29)
Cus ome _sa e y –1 × GRI –2 –0.0001***
(–3.1)
0.0000
(0.47)
–0.0001***
(–8.28)
–0.00001*
(–1.83)
–0.0072
(–1.62)
0.0152
(1.11)
0.0000
(–0.12)
0.0005
(1.38)
Responsible ma ke ing –1 × GRI –2 0.0001***
(4.42)
0.0000
(0.62)
0.0001***
(8.8)
0.0001
(1.28)
0.0043
(0.82)
–0.0385
(–1.52)
0.0002
(0.56)
–0.0011
(–1.37)
Wages/wo king condi ion –1 × GRI –2 0.0000
(0.35)
–0.0001**
(–2.34)
–0.0001***
(–7.62)
0.0000
(–0.16)
0.0009
(0.23)
–0.0097
(–0.71)
–0.0003
(–1.1)
0.0009
(1.48)
Human- igh s –1 × GRI –2 0.000***
(2.76)
–0.0001*
(–1.67)
–0.00001*
(–1.94)
0.0000
(0.86)
–0.0044
(–1.14)
–0.029
(–1.59)
–0.0005
(–1.63)
–0.001*
(–1.74)
Accoun ing –1 × GRI –2 0.0000
(0.4)
0.0000
(0.00)
0.0001***
(5.29)
0.0000
(0.04)
–0.0099*
(–1.68)
0.0000
(0.00)
0.0006
(1.25)
0.001
(1.28)
Inside -dealing –1 × GRI –2 0.0000
(0.21)
0.0000
(0.00)
0.0000
(–0.23)
0.0000
(0.13)
0.0114
(0.97)
–0.0324
(–1.12)
0.0000
(–0.08)
–0.0003
(–0.23)
Compensa ion –1 × GRI –2 0.0000
(–1.37)
0.0000
(–0.62)
–0.00001*
(–1.72)
0.0000
(0.84)
–0.0007
(–0.24)
0.0135
(1.19)
–0.0003
(–1.13)
0.0001
(0.11)
Con ol a iables Yes Yes Yes Yes Yes Yes Yes Yes
R2.3525 .7323 .2645 .4604 .0376 .3673 .0242 .0973
SRI: Socially Responsible In es men ; OLS: o dina y leas squa es.
Table 7 shows he esul s o Models (A.2.10)–(A.2.11) o Online Appendix 2 o examine he in luence o subs an i e CSR-engagemen (GRI
guidelines in CSR epo s) in in es ee i ms wi h con o e sies on und alpha and lows in Panels A–B, espec i ely. Reg essions a e es ima ed wi h
OLS, obus s anda d e o s, and clus e ed by und and qua e . Con ol a iables a e no included o space issues and a e a ailable upon eques .
T-s a is ics a e in pa en heses. *, **, and *** indica e signi icance a he 10%, 5%, and 1% le el.
Alda 31
may be e iden i y symbolic s a egies ad e ised because
knowing and analyzing subs an i e ini ia i es collec ed in
CSR epo s ollowing GRI guidelines may ake mo e
ime. Ne e heless, he g ea e awa eness o symbolic
s a egies p oduces di e se e ec s, showing mo e low
penal ies, especially in con en ional mu ual unds (Panel
B2). Con en ional mu ual- und pa icipan s do no iden-
i y he UNPRI signa u e as a eal commi men o change
i i ms su e con o e sies a e wa d. We hen ejec H6
wi h symbolic engagemen ; o be p ecise, symbolic
engagemen does no mode a e ou lows wi h con o e -
sies. Panels B1 and B2 also show ha und lows inc ease
wi h ce ain con o e sies a e UNPRI signing, displaying
he dis o ing signal o he symbolic CSR commi men
and/o highe engagemen o ins i u ional in es o s o
epai and amend con o e sial e en s wi h ac i e sha e-
holding. In conclusion, symbolic engagemen s a egies
a e able o d aw he a en ion o und pa icipan s and
educe hei passi e beha io .
We examine he eac ion o manage s owa d con o-
e sies a e CSR-engagemen s a egies in Table 9.
Compa ing he esul s o Tables 9 and 5, he inac i i y o
pension- und manage s emains wi h subs an i e and sym-
bolic engagemen (Panels A1 and B1 o Table 9). In addi-
ion, SRI mu ual- und manage s main ain he scan
eac ion owa d con o e sies wi h subs an i e CSR-
engagemen (Panel A2). This e idence is aligned wi h he
endu ing beha io o pension- und and SRI-mu ual- und
pa icipan s ound wi h subs an i e engagemen in Panel B
o Table 7. Mo eo e , con en ional mu ual- und manage s
diminish he disin es men beha io wi h con o e sies
a e subs an i e and symbolic engagemen (Panels A2 and
B2 o Table 9 s Panel B o Table 5). This indica es ha
manage s posi i ely assess CSR-engagemen p ac ices
Table 8. E ec o symbolic engagemen (UNPRI) wi h con o e sies on und pe o mance and lows.
Panel A: Alpha (dependen a iable) Panel B: Flows (dependen a iable)
Panel A.1:
Pension unds
Panel A.2:
Mu ual unds
Panel B.1:
Pension unds
Panel B.2:
Mu ual unds
Con SRI Con SRI Con SRI Con SRI
ESG-sco e –1 –0.004***
(–3.78)
0.0139
(1.63)
–0.0022**
(–1.98)
0.0004
(0.54)
–0.0803
(–0.61)
2.4757*
(1.78)
–0.0397*
(–1.85)
–0.0288
(–1.51)
En i onmen al –1 ×
UNPRI –2
–0.0002
(–0.93)
–0.0002
(–0.08)
–0.0012
(–0.35)
–0.0001
(–0.69)
0.0096
(0.63)
0.275
(0.71)
0.5846***
(5.09)
–0.0057
(–1)
Business_e hics –1 ×
UNPRI –2
0.0002***
(3.57)
0.0023
(1.49)
0.0013***
(3.8)
–0.00001*
(–1.75)
–0.0147***
(–3.03)
–0.358*
(–1.85)
0.0377
(1.43)
0.0001
(0.43)
An i-compe i ion –1 ×
UNPRI –2
0.0002
(1.21)
0.0009
(0.43)
0.0002
(0.28)
0.0001
(0.56)
0.0087
(0.73)
0.6963**
(2.39)
0.1483***
(3.31)
0.0117*
(1.93)
B ibe y –1 × UNPRI –2 –0.0002
(–1.5)
–0.0013
(–0.73)
–0.0015*
(–1.83)
0.0000
(0.08)
0.0024
(0.23)
–0.1916
(–0.89)
–0.106**
(–2.46)
–0.0052
(–1.42)
Consume -complain –1
× UNPRI –2
0.0000
(0.45)
–0.0022*
(–1.81)
0.0002
(0.42)
0.0003***
(3.54)
–0.0033
(–0.33)
–0.2495
(–1.12)
–0.2224***
(–3.51)
–0.0022
(–0.77)
Cus ome heal h sa e y –1
× UNPRI –2
0.0000
(–0.23)
0.0041
(1.49)
0.0004
(0.73)
0.0000
(0.97)
–0.008
(–1.35)
–0.4701*
(–1.76)
0.0919**
(2.55)
–0.0026*
(–1.82)
Responsible ma ke ing –1
× UNPRI –2
–0.0003**
(–2.38)
0.0017
(0.65)
–0.0042***
(–3.55)
–0.0001
(–0.77)
0.0337**
(2.42)
0.7445*
(1.73)
–0.3122**
(–2.23)
–0.0022
(–0.48)
Wages/wo king
condi ion –1 × UNPRI –2
0.0002
(1.47)
–0.0068**
(–2.46)
0.0076***
(4.07)
0.0001
(0.81)
–0.0208
(–1.52)
–0.1793
(–0.49)
0.0256
(0.24)
0.0027
(0.54)
Human- igh s –1 ×
UNPRI –2
0.0001
(0.4)
–0.0017
(–0.7)
0.0018
(0.45)
–0.0001
(–0.34)
–0.0311
(–1.59)
0.1129
(0.35)
–0.3884***
(–4.15)
–0.0083
(–0.71)
Accoun ing –1 ×
UNPRI –2
0.0000
(0.00)
0.0000
(0.00)
–0.001
(–0.69)
–0.0003***
(–4.07)
0.0000
(0.00)
0.0000
(0.00)
–0.4116***
(–3.96)
–0.0065*
(–1.89)
Inside -dealing –1 ×
UNPRI –2
–0.0001
(–0.3)
0.0138
(1.15)
0.0002
(0.16)
–0.0002
(–0.76)
0.0467
(1.5)
–1.3754*
(–1.71)
–0.2806***
(–3.5)
–0.0031
(–0.49)
Compensa ion –1 ×
UNPRI –2
0.0000
(–0.05)
–0.0017
(–0.89)
0.0055***
(3.01)
–0.0004***
(–3.45)
0.003
(0.21)
0.3865
(1.22)
–0.3011***
(–2.57)
–0.0008
(–0.11)
Con ol a iables Yes Yes Yes Yes Yes Yes Yes Yes
R2.1923 .6959 .2384 .0885 .0178 .2864 .0958 .0438
SRI: Socially Responsible In es men .
Table 8 shows he esul s o Models (A.2.12)–(A.2.13) o Online Appendix 2 o examine he in luence o symbolic CSR-engagemen (UNPRI
signa u e) in in es ee i ms wi h con o e sies on und alpha and lows (Panels A and B, espec i ely). Reg essions a e es ima ed wi h OLS, obus
s anda d e o s, and clus e ed by und and qua e . Con ol a iables a e no included o space issues and a e a ailable upon eques . T-s a is ics
a e in pa en heses. *, **, and *** indica e signi icance a he 10%, 5%, and 1% le el.
32 Business Resea ch Qua e ly 28(1)
since hese p ac ices also educe he ma ke eac ion on
pe o mance. The la e e idence is consis en wi h H7
( und manage s do no eac nega i ely o con o e sies in
i ms wi h CSR-engagemen p ac ices). Howe e , SRI
mu ual- und manage s inc ease he eac ion a e symbolic
engagemen (posi i e and nega i e coe icien s). Thus, ou
mixed e idence does no allow us o accep H7.
Finally, we apply he obus ness es s desc ibed in sec-
ion “Robus ness es s” o he CSR-engagemen analyses.
Ou conclusions sus ain, showing eliable esul s ( hese
analyses a e no included o he sake o b e i y and a e
a ailable upon eques ).
Conclusion
Ou esea ch p o ides new insigh s in o he non-explo ed
in luence o CSR in es ee- i m con o e sies on he wo
main global ins i u ional in es o s (pension and mu ual
unds). We conside CSR con o e sies in he co e en i-
onmen al, social, and go e nance a eas o he in es ee
i ms held by UK con en ional and SRI domes ic-equi y
pension and mu ual unds.
Ou esul s show ha CSR- i m con o e sies di e sely
a ec und pe o mance. A posi i e in luence is obse ed
in a eas wi h common in o ma ion o e load and dis o ed
signals (such as business e hics). Con o e sies ela ed o
p ima y s akeholde s (cus ome s and employees) nega-
i ely in luence pension- und and mu ual- und pe o -
mance. Con o e sies ela ed o mo e dis an s akeholde s
(en i onmen al and social ca ego ies) also a ec pe o -
mance. Howe e , go e nance issues (sha eholde s and
managemen ) a e p ac ically unno iced by he ma ke , pos-
sibly due o hei in e nal cha ac e . On he o he hand, we
s udy he beha io o und manage s owa d con o e sies.
Table 9. E ec o subs an i e and symbolic engagemen wi h con o e sies on he und-sha eholding a ia ion.
Panel A: Subs an i e CSR-engagemen : GRI Panel B: Symbolic CSR-engagemen : UNPRI
Panel A1:
Pension unds
Panel A2:
Mu ual unds
Panel B1:
Pension unds
Panel B2:
Mu ual unds
Con SRI Con SRI Con SRI Con SRI
En i onmen al –1 × Engagemen –2 –0.0087
(–0.77)
0.0124**
(2.16)
0.0000
(0.05)
–0.001
(–0.48)
–0.0078
(–0.19)
0.8234*
(1.76)
–0.2163***
(–5.58)
0.0314**
(2.03)
Business_e hics –1 × Engagemen –2 0.0002
(0.07)
–0.0015
(–0.76)
–0.0001
(–0.39)
0.0029**
(2.41)
–0.0244
(–1.15)
–0.0589
(–0.22)
0.0192
(0.56)
–0.0003
(–0.57)
An i-compe i i –1 × Engagemen –2 0.0000
(0.00)
0.0021
(1.08)
0.0002
(0.64)
0.0025
(1.27)
0.0273
(0.96)
–0.1292
(–0.44)
–0.028
(–1.37)
–0.007
(–0.95)
B ibe y –1 × Engagemen –2 0.004
(0.74)
–0.0012
(–0.61)
–0.0004
(–1.17)
–0.0015
(–0.83)
–0.0078
(–0.37)
0.2966
(1.07)
–0.021
(–0.43)
0.009
(1.51)
Cons_complain –1 × Engagemen –2 –0.0032
(–1.04)
0.0017
(0.66)
0.0005*
(1.89)
–0.0006
(–0.54)
–0.0056
(–0.38)
0.1611
(0.77)
0.0642
(1.31)
0.0027
(0.36)
Cus ome _sa e y –1 × Engagemen –2 0.002 0.0015 0.0006** –0.001 –0.0106 –0.4076 0.0047 –0.0095**
(0.47) (0.56) (2.23) (–1.14) (–0.39) (–1.29) (0.37) (–2.22)
Resp_ma ke ing –1 × Engagemen –2 –0.0136
(–1.09)
–0.0062
(–1.32)
–0.0006*
(–1.68)
–0.0011
(–0.52)
0.0452
(0.57)
–0.197
(–0.39)
0.04
(1.09)
–0.022***
(–2.78)
Wages/wo king –1 × Engagemen –2 –0.0026
(–0.58)
0.0019
(0.72)
–0.0004
(–1.3)
–0.0018
(–1.39)
0.0112
(0.5)
0.2294
(0.72)
0.206
(0.86)
0.0152*
(1.67)
Human_ igh s –1 × Engagemen –2 –0.0005
(–0.18)
–0.0014
(–0.57)
–0.0007***
(–2.79)
–0.0023
(–1.63)
–0.2465
(–1.49)
0.345
(1.12)
0.1256
(1.34)
–0.041*
(–1.7)
Accoun ing –1 × Engagemen –2 0.0083
(1.02)
0.0000
(0.00)
0.0014***
(3.06)
0.0012
(0.71)
0.0000
(0.00)
0.0000
(0.00)
0.0416
(0.79)
–0.0016
(–0.32)
Inside _dealing –1 × Engagemen –2 0.0063
(0.79)
0.0095*
(1.89)
–0.0003
(–0.48)
0.0014
(0.5)
0.0427
(0.35)
–1.5616*
(–1.81)
0.1079**
(1.97)
0.0217
(0.92)
Compensa ion –1 × Engagemen –2 0.0016
(0.83)
–0.0026
(–1.07)
0.0003
(1.13)
0.0007
(0.66)
–0.0732
(–0.88)
–0.2795
(–0.82)
0.0244
(0.43)
0.0094
(1.07)
Con ol a iables Yes Yes Yes Yes Yes Yes Yes Yes
R2.0073 .4458 .0367 .3778 .0022 .5228 .036 .0552
CSR: Co po a e Social Responsibili y; GRI: Global Repo ing Ini ia i e; UNPRI: Uni ed Na ion P inciples o Responsible In es men ; SRI: Socially
Responsible In es men ; Con : con en ional; OLS: o dina y leas squa es.
Table 9 shows he esul s o Models (A.2.14)–(A.2.15) o Online Appendix 2 o show he in luence o subs an i e (Panel A) and symbolic (Panel
B) CSR-engagemen in in es ee i m wi h con o e sies on he und-sha eholding a ia ion. Reg essions a e es ima ed wi h OLS, obus s anda d
e o s, and clus e ed by und and qua e . Con ol a iables a e no included o space issues and a e a ailable upon eques . T-s a is ics a e in
pa en heses. *, **, and *** indica e signi icance a he 10%, 5%, and 1% le el.
Alda 33
Manage s o pension unds and SRI mu ual unds do no
ealloca e po olios a e con o e sies. This a i ude is
consis en wi h he social na u e o pension unds and he
SRI p inciples o SRI unds, which incen i ize und man-
age s o engage in ac i e sha eholding and imp o e i ms’
long- e m sus ainabili y. In con as , con en ional mu ual-
und manage s dec ease he und sha eholdings in in es ee
i ms a e CSR con o e sies, guided by he adi ional
inancial p inciples o con en ional in es men s.
We also examine he conduc s o pa icipan s owa d
con o e sies and manage ial decisions ega ding con o-
e sies. Fund pa icipan s display a passi e conduc owa d
con o e sies ( und lows a e ba ely in luenced by con o-
e sies). Ne e heless, con en ional mu ual- und pa ici-
pan s dec ease hei in es men a e con o e sies, guided
by he adi ional in es men p inciple o disin es men o
deal wi h unpleased e en s. In addi ion, we ind dis inc
a i udes be ween SRI and con en ional pa icipan s ega d-
ing manage ial decisions owa d con o e sies. SRI pen-
sion- und and SRI mu ual- und pa icipan s ba ely eac o
manage ial decisions ega ding con o e sies, e ealing
pe sis en p e e ences and accep ance o manage ial deci-
sions. In con as , con en ional pension- und and con en-
ional mu ual- und pa icipan s penalize he manage ial
decision o suppo ing i ms wi h con o e sies.
Finally, we analyze he e ec o con o e sies when
in es ee i ms ha e implemen ed subs an i e and sym-
bolic CSR-engagemen p ac ices. De eloping CSR-
engagemen s a egies be o e su e ing con o e sies
so ens ma ke and manage ial eac ions owa d con o e -
sies. Ne e heless, und pa icipan s seem o be awa e o
symbolic CSR-engagemen p ac ices o a g ea e ex en
and educes hei passi e beha io by inc easing nega i e
eac ions a e in es ee- i m con o e sies (due o non- eal
i m ans o ma ions wi h symbolic CSR-engagemen
p ac ices). Fu he mo e, we ca y ou se e al obus ness
analyses and ou p e ious conclusions sus ain.
Ou indings p o ide a be e unde s anding o pa ici-
pan s’ p e e ences, helping und manage s o know pa ici-
pan s’ conce ns and guide hei conduc in he e en o
CSR- i m con o e sies (disin es men s engagemen ).
Ou esul s also p esen in e es ing in o ma ion o egula-
o s, iden i ying he e ec s o CSR- i m con o e sial
e en s on hese ins i u ional in es o s and no icing hei
eac ions as leading capi al-ma ke membe s. The gene al-
ized sca ce eac ion o und pa icipan s shows ha und
pa icipan s should be mo e awa e abou hei capi al allo-
ca ion and, simila ly, und manage s should ensu e p ope
communica ion abou hei managemen ega ding con o-
e sies o a oid agency p oblems.
Al hough ou esul s display new e idence on his opic,
u he esea ch on o he ins i u ional in es o s and ma ke s
may o e a comple e pic u e abou p io i ies and eac ions o
mul iple agen s owa d CSR- i m con o e sies. The s udy
o o he Eu opean ma ke s can complemen ou indings.
The di e se de elopmen o mu ual- und and pension- und
indus ies among Eu ope may p oduce une en esponses o
CSR- i m con o e sial e en s. Di e ences migh be espe-
cially ele an among Eu opean pension- und indus ies
because Eu opean wel a e models (Anglo-Saxon,
Con inen al, Medi e anean, and No dic) ha e es ablished
a ious pension sys ems, causing dissimila g ow h among
pension- und indus ies (Sapi , 2006). Fu he mo e, he la e
and sca ce Eu opean egula ion abou SRI and ESG o
inancial ma ke s may p oduce lowe eac ions owa d CSR
con o e sies ( ela i e o he mo e ad anced UK ma ke s).
Howe e , his si ua ion may be changing wi h he Eu opean
Commission’s Sus ainable Finance Ac ion Plan (Eu opean
Union, 2019), which in oduces he Sus ainable Finance
Regula ion Disclosu e. The main p o isions o his egula-
ion a e applicable om Ma ch 2021, equi ing sus ainabil-
i y- ela ed disclosu es on inancial-ma ke pa icipan s and
inancial p oduc s ( unds). None heless, he Eu opean
Commission delayed he applica ion o he egula o y ech-
nical s anda ds o Janua y 2023 (Eu opean Commission,
2022). Despi e his, examining he consequences o his eg-
ula ion on unds’ in es men decisions owa d CSR in es ee-
i m con o e sies will be an in e es ing s udy. Table A.4.1 o
Online Appendix 4 includes a summa y o possible expec ed
esul s o Eu opean und ma ke s ega ding he hypo heses
s udied. Mo eo e , his a icle assesses se e al con o e sies
in he main ESG a eas; howe e , he inclusion o o he con-
o e sies could p o ide a comp ehensi e s udy. An addi-
ional ex ension may be he analysis o ins i u ional in es o s
as impo an go e nance mechanisms in he CSR s a egy o
in es ee i ms. All hese analyses will comple e ou esul s.
Decla a ion o con lic ing in e es s
The au ho (s) decla ed no po en ial con lic s o in e es wi h
espec o he esea ch, au ho ship, and/o publica ion o his
a icle.
Funding
The au ho (s) disclosed eceip o he ollowing inancial suppo
o he esea ch, au ho ship, and/o publica ion o his a icle:
This wo k was suppo ed by Ibe caja and Uni e si y o Za agoza
(G an JIUZ-2020-SOC-02), Spanish Minis y o Science and
Inno a ion unded by MCIN /10.13039/50110001103, and by
ERDF (G an RTI2018-093483-B-I00) and Go e nmen o
A agon (G an S38_20R).
Supplemen al ma e ial
Supplemen al ma e ial o his a icle is a ailable online.
No es
1. h ps://www.sec.go /news/p ess/2004-94.h m
2. Some coun ies allow eco e ing pension- und sa ings in
ex ao dina y ci cums ances (OECD, 2005).
3. Mo nings a Di ec da abase iden i ies Socially Responsible
In es men (SRI) unds wi h he dicho omous socially
34 Business Resea ch Qua e ly 28(1)
conscious a iable: Yes/No, based on he und in es men
guidelines included in he und p ospec us. Funds wi h a
“Yes” a iable a e de ined as ollows:
unds ha in es acco ding o non-economic guidelines.
Such unds may make in es men s based on such issues
as en i onmen al esponsibili y, human igh s, o eligious
iews. A socially conscious und may ake a p o-ac i e
s ance by selec i ely in es ing in, o example, en i on-
men ally- iendly companies, o i ms wi h good employee
ela ions. This g oup also includes unds ha a oid in es -
ing in companies in ol ed in p omo ing alcohol, obacco, o
gambling, o in he de ense indus y.
4. FlowsTNA TNARTNA
i i i i i ,,,,,
[(
)]/ 
11
1, whe e TNAi,
and Ri, a e he To al Ne Asse s and he e u n o und i a
qua e , espec i ely. Flows a e winso ized a he bo om
and op 1% le el o a oid ex eme- alue issues.
5. The da a o calcula e he ou - ac o alpha a e ob ained om
F ench’s websi e: h ps://mba. uck.da mou h.edu/pages/
acul y/ken. ench/da a_lib a y.h ml. See Online Appendix
1 o u he de ail on alpha measu e.
6. The con o e sy a iables o Table 1 ep esen he ca -
ego ies in which he en i onmen al, social, o go e n-
ance (ESG)-pilla me ics a e di ided by Re ini i (in
Thomson-Reu e s Da as eam). The En i onmen al a i-
able is a comp ehensi e measu e o he en i onmen al
pilla , he Social-pilla a iables co e he ou social ca -
ego ies (communi y, p oduc esponsibili y, wo k o ce,
and human- igh s), and he Go e nance-pilla a iables
co e he h ee go e nance ca ego ies (sha eholde s,
managemen , and CSR s a egy). Sou ce: h ps://in obase.
homson eu e s.com/in obase/login/?nex =/in obase/
7. We equi e a leas 80% o obse a ions by i m and a iable.
8. We wan o hank an anonymous e e ee o he sugges ions
o his a iable ans o ma ion.
9. Fede al Rese e Economic Da a: h ps:// esea ch.s louis ed.
o g/ ed2/
10. The a iance in la ion ac o s (VIFs) o all models in ou s udy
a e less han 10, a s anda d ule o humb h eshold o mul-
icollinea i y de ec ion, applied in p e ious Co po a e Social
Responsibili y (CSR) s udies (Wu e al., 2016, among o he s).
Ou esul s sugges ha mul icollinea i y is no a conce n.
11. The qua e ly con o e sial po olio-holding a ia ion in a
i m is ob ained as he qua e ly change in he und-holding
weigh in each i m expe iencing a con o e sy a qua e –
1:
()
/
,, ,
ww w
j
i
j
i
j
i
−
−−11
; whe e wj
i
, is he po olio weigh
o pension/mu ual und i in i m j a qua e . We hen cal-
cula e he o al con o e sial po olio-holding a ia ion
(To al_sha eholding_ a ia ioni, ) o und i a qua e as he
o al qua e ly po olio-holding a ia ions in all in es ee
i ms wi h con o e sies held by und i a qua e .
12. We hank an anonymous e e ee o sugges ing hese obus -
ness es s.
13. We wan o cla i y ha he scope o he ESG-con o e sy
sco e is beyond ou analyses wi h he 12 con o e sies
s udied because he ESG-con o e sy sco e includes i ms’
exposu e o all ESG con o e sies and nega i e e en s
e lec ed in global media. Howe e , ou analyses ocus on
he mos ele an con o e sies o he ESG pilla s, conside -
ing he da a es ic ions in Da as eam da abase desc ibed in
sec ion “Da a, sample cons uc ion, and a iables.”
14. The main in es men a ea o all unds analyzed is UK
equi y; howe e , some unds ha e seconda y in es men
a eas; hence, we also ake i in o accoun , ollowing p e i-
ous s udies (K eande e al., 2005).
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