Activist hedge funds prefer to fight ESG stars

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By Jon Hay
27 Aug 2020

Evidence is building that two of the biggest trends in investing — activism and environmental, social and governance awareness — are actually in conflict. Activist hedge funds not only worsen companies’ ESG performance, a study suggests, but seek out companies with high ESG values for attack.

The idea that responsible investing and shareholder activism should clash is not surprising, since their cultures and languages are so different. 

One group champions 'shareholder value' and penalises 'underperformance' and 'shareholder dissatisfaction'. The other calls for considering the needs of staff, the community and the environment; believes investors have ...

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