Companies with stronger ESG standards usually perform better financially, according to recent research.
A recent report by Axioma, provider of enterprise market risk and portfolio analytics solutions, found that companies with better environmental, social, and corporate governance (ESG) standards “…often outperform the market” and exceed their financial benchmarks. The report also found that investment portfolios with high-scoring ESG companies outperformed their benchmarks by between 81 to 243 basis points over a four-year period (between 2014-2018).
Previous Boston Consulting Group research has also found that companies with higher ESG standards (e.g., companies seeking to conserve water) are more profitable than their counterparts. Furthermore, that investing in companies with high standards can help mitigate exposure to potential liabilities and costs that can arise out of ESG issues. Continue Reading