ESG-Washing in the Mutual Funds Industry? From Information Asymmetry to Regulation

In this paper, we study the asymmetric information between asset managers and investors in socially responsible investment (SRI) market. Specifically, investigate lack of transparency extra-financial communicated by managers. Using a unique international panel dataset approximately 1500 equity mutual funds, provide empirical evidence that some portray themselves as yet do not make tangible decisions. Furthermore, our results indicate financial performance funds is related to managers’ signals but should be evaluated relatively using ratings. summary, findings advocate for unified regulation framework constrains communication.