Tom Gosling talks to Dimitri Vayanos about the impact the green investors can have on stock prices by divesting from dirty firms and investing in green firms. There's a debate in the academic literature about whether the impacts are negligible or substantial. Using a theoretical model, Dimitri and his co-authors identify a significant but modest impact on cost of capital, measured in a few tens of basis points and share price impacts over a decade of around 10%. So noticeable, but not transformative in the context of the green transition.  

Host: ⁠⁠Tom Gosling⁠

Contributor: Dimitri Vayanos

Read Dimitri Vayanos's paper, The Impact of Green Investors on Stock Prices, co-authored with Gong Cheng, Eric Jondeau and Benoît Mojon.

To learn more about the Initiative in Sustainable Finance (ISF), visit ISF's website (⁠⁠https://www.fmg.ac.uk/isf⁠⁠).