2025/09/29 by Gianpaolo Parise, Mirco Rubin · 2 voices
Arts and Humanities · #Art History and Market Analysis
paper · pdf · doi:10.1111/jofi.13499
openalex publication_date 2025/09/29 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/22
ABSTRACT This paper establishes that mutual funds strategically time their trades in environmental, social, and governance (ESG) stocks around disclosure dates to inflate their sustainability ratings. This claim is supported by three empirical findings. First, we show that funds' ESG betas increase shortly before disclosure and decrease shortly afterwards. Second, we document that post‐disclosure fund returns are higher but have lower ESG exposure than disclosed portfolios. Third, we provide evidence that ESG stock prices temporarily rise before disclosure and decline afterwards. Overall, we establish that green window dressing positively impacts fund sustainability ratings, performance, and flows.