Financial Performance

The Business Case for ESG | Intentional Endowments Network, April 2016

  • This briefing paper provides a high-level overview of what ESG investing is, how ESG investing and analysis can be approached, and how ESG investing strategies perform financially.

 

Articles & White Papers:

Equity Strategy Focus Point - ESG: A Deeper Dive | Bank of America Merrill Lynch, June 2017

Why and How Investors Use ESG Information: Evidence from a Global Survey l SSRN, March, 2017

Measuring The Economic Impact of Short-Termism | McKinsey Global Institute, February, 2017

Impact Investing: the Performance Realities | Bank of America Merrill Lynch, November 2016

Sustainable Investing and Bond Returns | Barclays, October 2016

ESG Factors and Risk-Adjusted Performance: A New Quantitative Model | Granito & Partners, September 2016

Alpha-Generating Potential and Value of Integrated ESG Analysis Calvert Investments, June 2016

The Appeal of Sustainable Investing | Jon Hale, Morningstar Magazine, January 2016

ESG & Corporate Financial Performance: Mapping the Global Landscape | Deutsche Asset & Wealth Management, University of Hamburg, December 2015

  • This study examines the entire universe of ESG-CFP academic review studies that have been published since 1970. The analysis is based on the aggregation of the findings and data of 60 review studies. To the best of our knowledge, this therefore represents the most extensive review of academic literature as it relates to ESG and CFP ever undertaken.

ESG and Financial Performance: Aggregated Evidence From More Than 2000 Empirical Studies l Journal of Sustainable Finance & Investment, December 2015

Sustainable Investing: Addressing the Myth of Underperformance | Cornerstone Capital Group, September 24, 2015 

The Role of the Corporation in Society: Implications for Investors | The Calvert-Serafeim Series, September 2015 

Calvert Releases Paper Quantifying Impacts of ESG Factors in Equity Investments | July 22, 2015

Can ESG Add Alpha? | MSCI, June 2015

Allocating Capital for Long-Term Returns | Generation Foundation, May 2015

Sustainable Reality: Understanding the Performance of Sustainable Investment Strategies (pdf) | Morgan Stanley Institute for Sustainable Investing, March 2015

Corporate Sustainability: First Evidence on Materiality (pdf) l Mozaffar Khan, George Serafeim, Aaron Yoon, March 9, 2015

  • Found that firms with good ratings on material sustainability issues significantly outperform firms the poor ratings on these issues. 

From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance | Gordon L. Clark, Andreas Feiner, Michael Viehs, March 5, 2015 

  • Meta-study of more than 200 sources, 88% of which found that companies with strong sustainability performance had better operational performance and cashflows, and 80% of which found strong sustainability performance had positive effects on investment performance. 

Turning a Profit While Doing Good: Aligning Sustainability with Corporate Performance l Brookings Institute, December 2014, By George Serafeim

Long-Term Investing: An Institutional Investor Perspective l October 2014, Centre for International Finance and Regulation 

New Evidence:  How High Impact Portfolios Can Out Perform Traditional Portfolios l HIP Investor, June 2014 

Focusing Capital on the Long Term l Dominic Barton and Mark Wiseman, Harvard Business Review, January - February 2014 Issue

Resilient Portfolios & Fossil Free Pensions HIP Investor, September 2013

Quantifying Well-being and Impact can Drive Investors to Build a Better World Social Science Research Network - Febrary 2013

Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach | Caroline Flammer, October 2013

Sustainable Investing:  Establishing Long-Term Value and Performance (pdf) | DB Climate Change Advisors, June 2012

  • Found that 89% of research studies showed that companies with high ESG ratings exhibit market-based outperformance compared to industry peers.

The Impact of Corporate Sustainability on Organizational Processes and Performance (pdf) | Robert G. Eccles, Ioannis Ioannou, George Serafeim, Harvard Business School, July 2013

  • 18-year study (1993-2011) showing that 90 companies with strong sustainability policies outperformed a similar group of 90 companies with low sustainability standards, with a 4.8 percent higher annual above-market average return.

Alpha from Sustainability (pdf)| SAM Research, Robeco Quantitative Strategies, 2011

  • Found that between 2001 and 2010, a portfolio of sustainability leaders in a group of more than 450 companies outperformed by 1.74 percent annually, and weak sustainability performers underperformed by 1.87 percent annually.

Sustainability:  Opportunity or Opportunity Cost?  Applying ESG Factors to a Portfolio does not Negatively Impact Performance and May Enhance It (pdf) | RCM Sustainability White Paper, 2011

  • Found that a portfolio of top quintile best-in-class ESG companies outperformed the MSCI World Equal Weighted Index by 1.7 percent while the worst-in-class portfolio underperformed by 1.0 percent.

The Financial Performance of SRI Funds Between 2002 and 2009 | Olaf Weber, Marco Mansfield, Eric Schirrmann, June 2010

  • Shows that a portfolio of 151 SRI funds outperformed the MSCI World Index between 2002 and 2009.

 

For reports evaluating the financial performance implications of divesting from fossil fuels, please see the Carbon Risk resources page.  

 

* Several items on this list were adapted from “The 21st Century Investor: Ceres Blueprint for Sustainable Investing.” Ceres, 2013, p. 8