Focusing on ESG factors pushes Financial Progress

Researchers at NYU’s Stern Centre for Sustainable Business have collated data from over a 1,000 studies examining the relationship between environmental, social, and governance (ESG) factors and financial performance.

Here are some key results from their work:

1. In the long term, ESG related work outcomes become more visible and apparent. In other words, the improvement in financial outcomes is seen in the long run.

2. Assessing ESG factors based on performance contributes more to better financial performance. Focusing on environmental topics like research on mitigating climate change through decarbonisation strategies has only begun recently but there is strong evidence to suggest that this is beneficial for companies and investors.

3. Focusing investment on integrating ESG factors provides better results than negatively screening out companies that do not comply with ESG details.

4. ESG focused investing provides a security blanket to fall back on during socio-economic crises.

Read the report: https://www.stern.nyu.edu/sites/default/files/assets/documents/NYU-RAM_ESG-Paper_2021%20Rev_0.pdf