Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

Our 80,000 qualified print subscribers—and 130,000 12-month engaged online audience—trust us to dive in and provide original journalism you won’t find elsewhere covering key emerging areas such as laser-driven inertial confinement fusion, lasers in space, integrated photonics, chipscale lasers, LiDAR, metasurfaces, high-energy laser weaponry, photonic crystals, and quantum computing/sensors/communications. We cover the innovations driving these markets.

Laser Focus World is part of Endeavor Business Media, a division of EndeavorB2B.

Laser Focus World Membership

Never miss any articles, videos, podcasts, or webinars by signing up for membership access to Laser Focus World online. You can manage your preferences all in one place—and provide our editorial team with your valued feedback.

Magazine Subscription

Can you subscribe to receive our print issue for free? Yes, you sure can!

Newsletter Subscription

Laser Focus World newsletter subscription is free to qualified professionals:

The Daily Beam

Showcases the newest content from Laser Focus World, including photonics- and optics-based applications, components, research, and trends. (Daily)

Product Watch

The latest in products within the photonics industry. (9x per year)

Bio & Life Sciences Product Watch

The latest in products within the biophotonics industry. (4x per year)

Laser Processing Product Watch

The latest in products within the laser processing industry. (3x per year)

Get Published!

If you’d like to write an article for us, reach out with a short pitch to Sally Cole Johnson: [email protected]. We love to hear from you.

Photonics Hot List

Laser Focus World produces a video newscast that gives a peek into what’s happening in the world of photonics.

Following the Photons: A Photonics Podcast

Following the Photons: A Photonics Podcast dives deep into the fascinating world of photonics. Our weekly episodes feature interviews and discussions with industry and research experts, providing valuable perspectives on the issues, technologies, and trends shaping the photonics community.

Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Investors are tuned in to ESG news, but it’s not for the altruistic reasons you might think

Investors are tuned in to ESG news, but it's not for the altruistic reasons you might think

Investors are following ESG news closely but they mostly appear to be concerned about what impact that news will have on individual stock prices and the overall performance of their portfolios, a new study co-authored by Prof. Edward Watts of the Yale School of Management finds.

For their new paper, Watts, Stanford Ph.D student Qianqian Li, and Christina Zhu of the Wharton School examined the behavior of retail investors around more than 54,000 ESG-related news events for nearly 3,300 publicly traded firms between 2015 and 2022.

Over that time, they found, retail trading increases by 6% on ESG news days compared to nonevent days, a trend that increases to 8% using data just from 2020 on. They then went further to try to determine why trading increased: Are investors motivated by a desire to be socially responsible? Or are they instead driven by a news event’s potential impact on their returns? ‌

The evidence in the paper points to the latter hypothesis, Watts writes in a Yale Insights online article: According to the researchers’ data, investors purchase securities when the implications of the news are positive for their stock’s performance, and they sell when the implications are negative.‌

“There’s been a tremendous amount of debate circling around these issues, but I don’t think we had much generalizable empirical evidence,” Watts says. “This is a simple exercise: Are people consuming this information through the news and trading around that? We’re trying to infer, in the aggregate, what people really seem to care about and how much they really care about it.”‌

One example cited: More retail investors sold Boeing BA stock than bought it following the company’s settlement of the 737 Max scandal — an ESG event with negative implications for performance that led to a 4% stock selloff. But they also sold shares of Occidental Petroleum OXY after the company announced increased investments in clean energy, an ostensibly positive ESG event that also coincided with a drop in its stock price.‌

Investors are tuned in to ESG news, but it's not for the altruistic reasons you might think

In his class on ESG investing, Watts says, he offers an extreme hypothetical to drive home the point. “It would be very pro-ESG to raise your employees’ salaries by 500 percent,” he says. “But the stock price is going to drop significantly. No investor is going to like that.”‌

Watts and his co-authors also compared how much activity takes place around ESG-related news events compared to more traditional financial disclosures; overall, they found that investors respond more to ESG news than to analyst forecasts and dividend announcements but less than they do to earnings announcements or management guidance.

In other words, investors treat ESG information like they do any other information that might affect their returns. Quoting Alex Edmans of the London Business School, the authors write that “ESG is both extremely important and nothing special.”

They conclude that bans on considering ESG may be “misguided” and “violate fiduciary obligations.” But making broad claims that many retail investors care about ESG for nonfinancial reasons also “may be inadvisable.” ‌

Watts says that politicization of ESG has led to unnecessarily contentious debates in state legislatures and among financial regulators.‌

“The term ESG has become weaponized,” he said. “If we just accepted that this stuff is not very special, we wouldn’t have a lot of these debates.”‌

Read more: More than 75% of asset managers predict sustainable funds will grow despite political headwinds

The post Investors are tuned in to ESG news, but it’s not for the altruistic reasons you might think first appeared on Equities.com.

Stock Quote API & Stock News API supplied by www.cloudquote.io
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms Of Service.