All of grissman's Comments + Replies
Responding here to John's and Hauke's comments above. I hugely appreciate these comments. Especially the highlighting of the marginal impact of the individual, that's exactly the framework of analysis needed.
I want to focus specifically on the added value of being a shareholder for advocacy.
Nonprofits are able to be more radical, and have the edge in reaching the attention of the mainstream public - which is likely most important in advocacy campaigns focused on consumer-facing brands.
As I see it, both shareholder and nonprofit advocates ha...
Kit, thanks for making that distinction.
All I (personally, can't speak for Max) tried to convey was that there is substantial evidence that impact investing has not led to underperformance (can't say anything about the future because as every financial disclaimer says: past performance is not indicative of future results).
Of course, studies showing historical outperformance from ESG are useful to make Kit's latter point that SRI has not undermined the bottom line
I don't know if this is necessarily true, because often times outperforming firms get inflows of assets. Then they wouldn't have to raise their fees because they make more money by taking the same (or lower) fees off of a larger pool of assets.
There may be research out there that completely disproves my hypothesis, it is just a hypothesis, but I don't think one can necessarily make that logical jump.
Thanks for the comment! I don't fully understand the point you're making in the second paragraph, do you mind expanding a bit?
On your first p0int, you would be correct assuming efficient markets and that all information is priced in. A lot of ESG research has been making the claim that ESG factors are material, and often ignored by mainstream managers (not priced in). This could lead to the result you describe.
I could understand that you may be skeptical of ESG being material and not priced in. I will say that discussion of ESG factors is showing...
I'm glad you're excited about this idea. Making the business case to companies to take AI safety seriously, from an investor perspective, could be an important angle to getting more companies to take it seriously.
Not much difference between 1 and 100 shares. Influence certainly depends on number of shares, but it's more dependent on credibility. There are a number of great examples of smaller investors with issue area expertise substantially affecting corporate operations. And other small investors have raised new issues from new angles to c...
You posed some fantastic questions, jjharris!
By using your shares to support an advocacy campaign with an individual stock, I think you will marginally increase the success probability of the campaign. I can't say that you will generate abnormal returns. I did link to a couple studies that correlate successful advocacy campaigns with outperformance, but it's in no way guaranteed.
Separately (or additionally), investing in a mutual fund/ETF run by an impact-focused investment manager gives it more assets, which gives it more operational capacity to...
I had a couple other thoughts but they weren't that relevant and my comment was getting too long.
1. Shareholder advocacy often combats displacement effects because the campaigns often target entire industries (see Farm Animal Investment Risk and Return or Boston Common Asset Management's Banks and Climate Change work as examples).
2. It makes sense for index investors to advocate for corporate policies that benefit their entire portfolio. They have incentives to encourage companies to minimize negative externalities (funny enough, some academics w... (read more)