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Carlos Salas, MSc, CFA, CQF

Likes
366
Date
2022/07/06
Image Link
https://media-exp2.licdn.com/dms/image/C4E22AQFREssi24W0FQ/feedshare-shrink_800/0/1657095553502?e=1660176000&v=beta&t=HQYk4HQ-FFqzt-JLgJlmGzin261kyxDxhk4rGih53Go
ML Score
5
Job
iLuminar AM | Co-Founder
Content
NEW RESEARCH: Does #ESGinvesting affect financial risk & return? Numerous studies have investigated this issue. Reviewing more than 2,000 studies, Friede, Busch, and Bassen (2015) conclude: “the business case for ESG investing is empirically very well founded”. Yet, I have always been skeptical. The quality of many studies is sub-par. Wishful thinking and publication bias are serious concerns. Also, demand effects may play a role: if strong ESG stocks have done so well, haven't they become rather expensive?I just wanted to sort this out for myself, based on what I believe are the proper academic standards: conservative statistical tests, elaborate controls for other stock characteristics, and taking care of country and sector effects. Together with Romulo Alves and Philipp Krueger, we have now released the first results, based on 9,253 stocks from 46 countries over 2001-2020 and using 3 different ESG ratings: Refinitiv, MSCI & Sustainalytics:https://lnkd.in/ed7gYtrjSo what do we find? Nothing. We conclude that there has been NO relation between ESG ratings and stock returns around the world in the last 20 years. Really nothing? Even when we look at different regions, different sectors, different time periods, different rating providers, the E, S, and G ratings individually, or ESG momentum, we find NO reliable evidence that ESG and stock returns are related. A rare case of a "null result" that seems relevant for both academia and practice...The good news: ESG investing has not systematically come at the expense of financial performance in the past two decades. Also, there is little indication that we should be worried about ESG bubbles. The bad news: strong ESG companies do not yet face a lower cost of capital, which would require more ESG investment flows. Please stay tuned for the next version of our study (expected early Fall), in which we intend to include data fr
Property
Integromat
Link
https://www.linkedin.com/feed/update/urn:li:activity:6950422943893995520
Comments
73
Type
this
Profile
https://www.linkedin.com/in/csalasls/
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