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Sustainable Investment Funds Can Encourage Worse Behavior

The Horizons Tracker

Subsequently, leveraging historical data, the researchers evaluated the responses of the highest and lowest polluting groups to fluctuations in their capital costs, an impact similar to the objectives of the sustainable investing movement.

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The Key to a Jobs Plan that Works

Harvard Business Review

A program to incentivize banks to provide increased capital at lower rates to small businesses is desperately needed. To align incentives, however, it must be done right. Banks aren't looking for cheaper capital; they are looking for lower risk.

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What U.S. CEOs Should Do with the Money from Corporate Tax Cuts

Harvard Business Review

It permits immediate expensing of many capital investments. It treats pass-through entities more favorably than in the past , and it increases the incentive to repatriate off-shore cash. The cost of capital is at historic lows, averaging below 6% for most large U.S.

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

Private equity as we define it in this paper does not include venture capital investments.). In financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies. Rather, they rely on internal rates of return and multiples of invested capital.

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Why the 21st Century Will Belong to Family Businesses

Harvard Business Review

As a result, family equity can come at a very low cost of capital, where businesses can meet the annual needs of their shareholders without having to worry about paying back the principal. And when family members with large ownership stakes are also involved in managing the business, incentives are easily aligned.

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Why Europe's Carbon Woes Matter to the Whole World

Harvard Business Review

This has drastically reduced the incentives for them to invest in or deploy clean-energy technologies or to modernize their energy-infrastructure assets. Share prices for European utilities and industrial companies have fallen too, threatening a wave of credit downgrades and increasing companies'' cost of capital.

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What Shareholder Value is Really About

Harvard Business Review

A CEO's job is about resource allocation with a goal of earning a return in excess of the opportunity cost of capital. The challenge is figuring out how to allocate human and financial capital to its best and highest use for the long term. This requires difficult trade-offs. Communication.