RT Journal Article
SR Electronic
T1 Beyond a Morality Tale: Reassessing ESG Investing
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP jwm.2022.1.171
DO 10.3905/jwm.2022.1.171
A1 Edward N. W. Aw
A1 Cristina Carroll
A1 John Q. Jiang
A1 Gregory Y. Sivin
YR 2022
UL https://pm-research.com/content/early/2022/04/07/jwm.2022.1.171.abstract
AB We examined the benefit of incorporating ESG factors over a more recent period to acknowledge the ongoing investment trend towards ESG. A review of academic literature suggests lack of consensus on the benefit of incorporating ESG factors. We find no evidence that suggests incorporating ESG criteria results in a performance headwind or subordinate return. Furthermore, we find strong evidence of idiosyncratic risk reduction as one moves from firms that are least ESG compliant towards firms that are most ESG compliant. Finally, we conclude that the source of ESG rating can alter the performance of ESG factors.