The experiment was run twice, once with positive CSR information signalling potential future growth, and then with information giving a potential negative signal about potential future risks.According to the article’s authors, the results suggested that CSR information released at a different time to that for financial data could lead to “asymmetric anchoring” by investors.The researchers found that investors receiving positive CSR information in this way did not react to it, indicating a strong anchor to the evaluations based solely on financial data. When CSR and financial information were disclosed simultaneously investors seemed to include the positive CSR information into their valuations and generate higher firm valuations than investors who received the information sequentially.However, when the CSR information was negative investors responded to it much in the same way whether or not its disclosure was “temporally disconnected” from the financial information.“They almost fully overcome any anchoring effect from initial valuations based on financial information only,” according to the researchers.“Investors’ asymmetric anchoring is induced by differences in cognitive effort invested in CSR information processing, which depends on whether CSR information signals future profits or losses,” they said.Bassen’s co-authors were Markus Arnold, from the Institute of Accounting at the University of Bern in Switzerland, and Ralf Frank of the German Association of Investment Professionals (DVFA). The DVFA provided the access to the investment professionals participating in the experiments, hence the German skew.The article can be found here.Impax to buy US SRI Pioneer PaxImpax Asset Management is to acquire Pax World Management LLC, one of the world’s first socially responsible investors, in a $52.5m (€43.9m) deal.Together, the asset managers would have £10.3bn (€11.7bn) of assets under management.The acquisition made strategic sense because both Impax and Pax were “pioneering firms focused on the transition to a more sustainable economy”, according to a statement.In addition, the companies said there was growing interest among asset owners around the world “in allocating capital to high-growth sustainable investment opportunities, in investment products that take a broad view of risk, including environmental, social and governance (ESG) factors, and/or that demonstrate positive, non-financial impact”.Pax was founded in 1971, when it introduced what it says was the first publicly available mutual fund in the US to use social as well as financial criteria in the investment decision-making process.Under the terms of the agreement, Impax will acquire 100% of Pax with an initial valuation of $52.2m, plus additional contingent payments of up to $37.5m in 2021, depending on Pax’s performance.ESG integration expectation surpriseLess than half of investment consultants and investors responding to a CAMRADATA survey said they expected asset managers to have ESG considerations integrated in their investment process. Last year’s survey found half of respondents expecting ESG integration at asset managers.Many investors have proclaimed their commitment to ESG investing and in recent years there has been a strong move in this direction, with companies signing up to measures such as the UN’s Principles for Responsible Investment.Sean Thompson, managing director at CAMRADATA, told IPE: “We were surprised that investors were suggesting that it wasn’t as important to them to have ESG integrated, or at least their asset managers to have ESG integrated in the investment process.“Overall it was an interesting one. While there were some undecided as well, it wasn’t clear-cut that people were saying ‘it’s very important’.”He suggested the result may simply be down to this year’s cross-section of respondents.There were 118 respondents to this year’s survey, of which 58% were asset managers and 42% were investment consultants and institutional investors. Most of the asset manager respondents managed money for pension schemes and insurance companies, while three-quarters of the 25 consultant respondents provided services to pension schemes only.The majority of asset managers in the survey said they have ESG integrated in their investment process. The survey can be found here.Beware green bonds’ exposure Green bonds are more exposed to environmentally-related credit risks, the Bank of International Settlements (BIS) has noted in its latest quarterly review.“While the management of environmental risks extends far beyond green bonds, it is important to avoid the misperception that green bonds are insulated from such risks,” it said. “In fact, among all rated bonds, those with a green label are more likely to be in sectors that are exposed to such risks.”The central bank organisation said that within a universe of corporate debt rated by Moody’s, 13.2% was issued by institutions in industries with moderate or greater exposure to environmental credit risk, and around 2.9% by institutions in industries classified as either immediate or emerging elevated risk.Looking at the industry composition of green bonds alone, however, 22.4% were issued in sectors with moderate or greater exposure to environmental credit risk, and nearly 14% by institutions in industries classified as either immediate or emerging elevated risk.The percentage of green bonds in high risk sectors was four times as much as that for overall rated debt, it said. The timing of a company’s disclosure of environmental, social and governance (ESG) information can make a difference to how that information is valued by professional investors, according to a new academic paper.The researchers concluded that corporate social responsibility (CSR) information “is not always treated entirely rationally by capital market participants”.Alexander Bassen, professor of capital markets and management at the University of Hamburg, Germany, was one of the authors of the paper. He told IPE the researchers chose the term CSR rather than ESG to address the corporate perspective. In academic literature, CSR is often understood as representing the perspective of corporates, while ESG represents the investor. The experiments involved presenting European – mostly German – professional mainstream investors either with CSR information alongside a company’s financial disclosure, similar to an integrated report, or with CSR disclosure in a standalone report “temporally disconnected” from the firm’s financial disclosure.
The Italian had considerable support in the stands and that was evident at the FA Cup final at Wembley on Saturday when, amid rumours over his future, his name was chanted regularly. Mancini ended the club’s 35-year trophy drought by overseeing their 2011 FA Cup success and bettered that by winning a first top-flight title in 44 years last season. That the news of Mancini’s departure broke on the anniversary of last year’s dramatic Premier League title success added to the gloom. Kevin Parker, general secretary of the Manchester City Supporters Club, said: “After the weekend I think we were all expecting it to happen but I think we are all a bit disappointed it happened yesterday of all days – the anniversary of when we won the Premier League.” The sacking of manager Roberto Mancini has been met with widespread dismay by Manchester City fans. Parker added: “All those fantastic memories we have of May 13, 2012 – that date is a special date for City fans and that’s been a little bit tarnished. We’re definitely all disappointed.” A statement from the club said that Mancini had been relieved of his duties for failing to achieve the season’s “stated targets”. Parker said: “It is unbelievable. The club have said the targets set haven’t been met, but finishing second in the Premier League and losing finalists in the FA Cup would suggest those targets might have been unachievable. Does that mean we had to win the Premier League and win the FA Cup? I’m not sure.” The club’s statement also referred to a “need to develop a holistic approach to all aspects of football at the club”. Parker feels this could be a reference to various reports of disunity within the dressing room during Mancini’s tenure. This season alone Mancini has attracted criticism for seemingly unnecessary comments about Joe Hart, Micah Richards and Vincent Kompany while the many incidents involving the now sold Mario Balotelli were a patience-draining distraction. Parker said: “I think it seems clear – whilst they might not be happy with what’s happened on the field – there are other bits and pieces off the field that we as fans don’t get to know about. This reference to an ‘holistic approach’, there is probably a message in there somewhere. I think they are looking for peace, harmony and happiness in the camp. “That would suggest that under Roberto that isn’t the case. We all hear rumours and hear stories about it not being a particularly happy camp. But as fans our interest is a successful football team, success and trophies, and under Roberto that is what we got. Of course we are disappointed we have not won a trophy this season but in the eyes of City fans, that is not failure.” Press Association