Abstract
We compared the environmental performance and financial performance between green fund and non-green fund to explore the balance between environmental goals and financial objectives of green funds by in the context of China government’s strong advocacy of “developing green finance and setting up green development fund”. In this paper, the open-ended active fund with the shareholding ratio of over 75% is taken as the object of study. By the PSM method, 28 green funds are matched by 1:5 to obtain 140 non-green funds. Through the large sample data of 2010-2016, the results show that: 1) the green fund investment portfolio is cleaner than non-green fund. From the long-term environmental performance of the holding enterprises, the green and the non-green fund’s environmental performance and financial performance are tested empirically. Fund environmental performance is better than non-green fund. From the perspective of the short-term environmental performance of the holding enterprises, there is no difference between the environmental performance of the green fund and the non-green fund. 2) The excess return of the green fund is higher than that of the non-green fund. In the period of China’s economic transformation, green funds not only assume the responsibility of investing in environmental performance of enterprises, but also take into account its financial performance, to achieve a win-win result of low pollution and high yield.
Highlights
China has developed rapidly since the reform and opening up
Is the green fund taking into account its two goals? This paper presents the following two questions: (1) Is green fund more green than non-green fund? 2) Is the green fund financial performance better than non-green fund?
This paper examines the differences between green fund and non-green fund environmental performance, to test whether the green fund to achieve its environmental goals
Summary
The State Council issued the “thirteen” eco-environmental protection plan, clearly putting forward the establishment of market-oriented operation of the various types of green development fund. It took “developing green finance and establishing green fund” as its theme on December 5, 2016. Green Fund in this article refers to the special energy-saving emission reduction strategy, low-carbon economic development, environmental optimization and transformation projects. Most of the research has focused on the financial performance of socially responsible investment funds, and there are few studies on green funds. As the green fund in the country belongs to the relatively new topic in China, the empirical research about Chinese green funds is almost blank.
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