LBS faculty wins at major conference

Research co-authored by London Business School Professor of Finance Julian Franks has been recognised at a major international conference on responsible investment.

‘Does Paying Passive Managers to Engage Improve ESG Performance?’ was announced as the winner of the PRI Award for Outstanding Research at PRI in Person 2023 in Tokyo.

The paper examines the effects of an experiment by Japanese Government Pension Investment Fund (GPIF), which saw it pay its largest passive manager to actively engage portfolio companies to improve their ESG performance in return for additional equity investment. The researchers found that asset manager engagement did result in improved ESG scores among the relevant companies.

Professor Franks shares the award with his co-authors Professor Marco Becht (Solvay Brussels School for Economics and Management) and Professor Hideaki Miyajima (Waseda University) and Professor Kazunori (Icko) Suzuki (Waseda University).

Professor Franks said: “My colleagues and I are delighted with the award. GPIF’s stewardship program is pioneering in many respects and the research has provided many insights into ESG performance in Japan."

PRI in Person is the annual conference of Principles of Responsible Investment, a UN-initiative and the world’s leading proponent of responsible investment. Attended by over 1000 delegates, this year’s keynote speakers were Fumio Kishida, Prime Minister of Japan, and Yuriko Koike, Governor of Tokyo.