The Impact of Fund Characteristics on Environmental, Social, and Governance (ESG) Risks: An Empirical Analysis

Abstract

This study examines the impact of fund characteristics on Environmental, Social, and Governance (ESG) risks in investment funds. The research focuses on three key factors: fund size, fund category, and investment area. Using regression analysis, the study investigates how these characteristics influence ESG risks across different fund types and geographical regions. The methodology addresses potential statistical issues such as multicollinearity and heteroscedasticity to ensure robust results. The findings reveal significant relationships between fund attributes and ESG risk levels, with notable variations across regions and fund types. Fund size is found to positively influence certain ESG risks, while geographical location and investment focus play crucial roles in determining the level of ESG risks. The study aims to contribute to a better understanding of ESG risk factors in investment portfolios, offering valuable implications for fund managers and investors in their decision-making processes and risk management strategies.