N°23-64: Do Mutual Funds Greenwash? Evidence from Fund Name Changes

This paper investigates whether mutual funds that introduce sustainability-related buzzwords in their names actually shift their focus to sustainable investing following the name change. Relatively less successful funds tend to engage in such rebrandings to regain investor flows. Following the name change, funds improve their portfolio sustainability scores by imposing negative screens on poor-sustainability-performing firms. However, we find no evidence that such funds exert any commitment to improve firms’ sustainability practices through voting on environmental, social or governance proposals. The commitment to sustainability is even less present when their votes are more likely to be pivotal, consistent with greenwashing.