Impact of Climate News on Mutual Fund Investments

This research paper analyzes the effect of climate-related news on investment flows in mutual funds, particularly focusing on ‘green funds’ that invest in sustainable companies. The authors, led by Giulio Cornelli, find that climate news leads to significant and sustained inflows into green funds compared to traditional funds. The study highlights the responsiveness of green funds to climate risks, leading to capital reallocation towards environmentally-friendly companies, thereby supporting a transition to a sustainable economy.