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Socially Responsible Investment
and Environmental Funding
Christian GOLLIER
IDEI Researcher
Professor of Economics
University Toulouse I
A new chair on SRI
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Paris is key in the development of SRI funds.
 There is no agreed-upon methodology to evaluate assets according to their
social and environmental performances.
 There is not much evidence of the structure of the demand for SRI, or of the
ethical, social and environmental preferences of investors.
 There is no clear evidence and no theory of the effects of the emergence of
the social responsability of investors
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on asset prices,
on the cost of capital of firms,
and on their real investment decisions.
Based on this situation, 15 french players on SRI took the initiative to create
a new chair on "Durable Finance and Responsible Investment".
 It is a joint venture of the Ecole Polytechnique and the University of Toulouse
(ranked 6th best department of economics in the world).
A first set of questions
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The economics of SRI is connected to many fields: environmental
economics, psycho-economics, behavioural finance, law and economics,
growth theory, public economics, decision theory under uncertainty,...
 A subset of crucial questions are going to be examined over the next 3
years:
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Evaluation of the investors' willingness to pay for a cleaner world, and its impact
on the optimal asset allocation of SRI funds;
Economic analysis of the so-called "entrepreneurial short-termism".
Aggregation of investors' SR preferences and beliefs, and elaboration of a "SR
CAPM". Could classical investors undo (and take advantage of) the actions of
socially responsible investors?
How SR firms can signal their quality under asymmetric information? Cost of
observability. Role of financial intermediaries and of rating agencies. Impact on
governance.
How much should we do for future generations?
What should we do with the precautionary principle?
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Stockholm, Thursday, March 29, 2007
Paris, Gateway
to Euro Capital Markets