Ch10 - Gastvorlesung

Question 1

How can investors influence companies (climate transition)

Answer 1

○ Direct influence: Green investments and engagement.
○ Indirect influence: Market signals (shifting investments) and non-market signals (public pressure).

Question 2

Investor Impact Mechanisms (Finreon)

Answer 2

● Engagement: Directly communicate with companies (voicing concerns and voting).
● Market signals: Influence companies by how and where investors allocate capital (investment and divestment).
● Non-market signals: Public communication and reputation (generating information, influencing reputation, establishing awareness).

Question 3

Finreons Business Model

Answer 3

● Combines shorting with active engagement: Targets high-carbon emitters (“climate laggards”).
● Portfolio swap: Replaces high-carbon stocks with low-carbon alternatives, reducing the portfolio’s financed emissions while maintaining sector neutrality.
● Engagement process: Identifies laggards, sends letters, conducts surveys, initiates dialogues, and escalates if needed (using public pressure or divestment).

Question 4

Finreons Engagement Successes

Answer 4

● High response rate: Many shorted companies actively engaged with Finreon.
● Increased climate awareness: Companies became more aware of their climate impact and investor expectations.
● Concrete actions taken: Some companies set decarbonization targets, invested in renewable energy, etc.