I see that this post has received a couple of downvotes since the last time I checked. I really wish that those voters would leave a comment to explain why they didnât like the post, or ways in which they thought it could be improved.
I donât necessarily agree with every point of the authorsâ argument, but theyâve made an honest attempt to contribute to an ongoing conversation from an angle not mentioned by Halstead and Hillebrandt. They laid out their argument clearly and cited sources, something Iâm happy to see more of on the Forum.
Downvotes seem to imply one of the following things:
1. Someone thinks theyâve made one or more mistakes on the post (but hasnât pointed out those mistakes).
2. Someone doesnât like the way the post was written/âformatted (but hasnât explained how in a way that could help the authors improve the post).
3. Someone doesnât like impact investing and downvotes posts that favor it, even if they havenât examined the arguments behind those posts.
I could understand (3) for posts about something either totally irrelevant to EA, or something philosophically opposed to EA, but not for a topic like impact investing, which is at least a plausible path toward impact. Even if someone doesnât think the area is important or tractable enough to be worth discussing, I wish theyâd take the time to leave a comment explaining that.
I downvoted because the arguments that impact investing funds would outperform funds purely optimized for profit seemed quite naive, and indicated a lack of some basic microeconomic intuitions that made me strongly distrust the rest of the post.
The study linked helped a bit, though I easily found meta analyses with the opposite conclusion, and also itâs a kind of domain where I would expect empirical studies to be pretty easily fudged to give the socially approved conclusion.
Also some general feeling of distrust of someone advocating for an intervention that they are financially benefited by, though that was much weaker evidence and I recognize that people who work in this space are probably also the ones who think most about it.
That feels overly harsh given that many economists apparently accept that SRI doesnât undermine the bottom line. Its weird to downvote something held by a significant chunk of economists for being naive.
Iâd like to highlight the distinction between âimpact investing funds would outperform funds purely optimized for profitâ and âSRI doesnât undermine the bottom lineâ. In markets as efficient as I think publicly traded stocks are, the former is highly improbable and the latter is highly probable.
The blog post appears to make both claims. Habrykaâs complaint may seem more defensible to you if it is entirely about the former claim.
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Two technical notes on this distinction:
Given the existence of some low-quality evidence for the strong (outperformance) claim, you might argue that that too is not so naive.
Of course, SRI typically reduces diversification, with an effect somewhere between negligible and substantial depending on the strategy, making the weak (doesnât undermine) claim misleading in some situations, even with efficient markets.
All I (personally, canât speak for Max) tried to convey was that there is substantial evidence that impact investing has not led to underperformance (canât say anything about the future because as every financial disclaimer says: past performance is not indicative of future results).
Of course, studies showing historical outperformance from ESG are useful to make Kitâs latter point that SRI has not undermined the bottom line
I see that this post has received a couple of downvotes since the last time I checked. I really wish that those voters would leave a comment to explain why they didnât like the post, or ways in which they thought it could be improved.
I donât necessarily agree with every point of the authorsâ argument, but theyâve made an honest attempt to contribute to an ongoing conversation from an angle not mentioned by Halstead and Hillebrandt. They laid out their argument clearly and cited sources, something Iâm happy to see more of on the Forum.
Downvotes seem to imply one of the following things:
1. Someone thinks theyâve made one or more mistakes on the post (but hasnât pointed out those mistakes).
2. Someone doesnât like the way the post was written/âformatted (but hasnât explained how in a way that could help the authors improve the post).
3. Someone doesnât like impact investing and downvotes posts that favor it, even if they havenât examined the arguments behind those posts.
I could understand (3) for posts about something either totally irrelevant to EA, or something philosophically opposed to EA, but not for a topic like impact investing, which is at least a plausible path toward impact. Even if someone doesnât think the area is important or tractable enough to be worth discussing, I wish theyâd take the time to leave a comment explaining that.
I downvoted because the arguments that impact investing funds would outperform funds purely optimized for profit seemed quite naive, and indicated a lack of some basic microeconomic intuitions that made me strongly distrust the rest of the post.
The study linked helped a bit, though I easily found meta analyses with the opposite conclusion, and also itâs a kind of domain where I would expect empirical studies to be pretty easily fudged to give the socially approved conclusion.
Also some general feeling of distrust of someone advocating for an intervention that they are financially benefited by, though that was much weaker evidence and I recognize that people who work in this space are probably also the ones who think most about it.
That feels overly harsh given that many economists apparently accept that SRI doesnât undermine the bottom line. Its weird to downvote something held by a significant chunk of economists for being naive.
Iâd like to highlight the distinction between âimpact investing funds would outperform funds purely optimized for profitâ and âSRI doesnât undermine the bottom lineâ. In markets as efficient as I think publicly traded stocks are, the former is highly improbable and the latter is highly probable.
The blog post appears to make both claims. Habrykaâs complaint may seem more defensible to you if it is entirely about the former claim.
--
Two technical notes on this distinction:
Given the existence of some low-quality evidence for the strong (outperformance) claim, you might argue that that too is not so naive.
Of course, SRI typically reduces diversification, with an effect somewhere between negligible and substantial depending on the strategy, making the weak (doesnât undermine) claim misleading in some situations, even with efficient markets.
Kit, thanks for making that distinction.
All I (personally, canât speak for Max) tried to convey was that there is substantial evidence that impact investing has not led to underperformance (canât say anything about the future because as every financial disclaimer says: past performance is not indicative of future results).
Of course, studies showing historical outperformance from ESG are useful to make Kitâs latter point that SRI has not undermined the bottom line