A fundamental question that never grows old: can a company with strong environmental and social performance, but weak business results, still attract investors? Over the past decade, green finance, ESG (environmental, social and governance) investing, and impact investing have been widely seen as a new phase of modern capitalism. Capital is no longer driven solely by profit, but also by environmental and social values. A recent systematic review by Schuster and Lueg (2026), based on 50 event studies, adopted an approach centered not on countries, but on asset pricing mechanisms and research design. This framework allows for broader conclusions about market logic, while also generating additional valuable insights. The conclusion is hard to escape: capital markets do not run on ethics, but on the pricing of risk and return. That same logic shapes not only stock market reactions, but also the way green capital is channeled throughout the real economy. Transition risks weigh more than physical risks A key finding of the study is the clear divide between transition risks and physical risks. Climate policy changes and climate regulations tend to trigger stronger statistical significance, while physical threats such as storms or floods often lead to weaker, and at times […]