For investors wishing to practise “conscious capitalism”, evidence shows there is benefit in allocating some environmental, social and governance investment capital to companies with identifiable aspects of ESG implementation that still require improvement.
RAM found the top quintile ESG improvers outperformed the bottom quintile by 3.8 per cent annualised among US all-cap equities from 2010 to 2020.and found companies receiving ESG rating upgrades outperformed an equal-weighted MSCI ACWI Index over the following 12 months by 0.93 per cent, while stocks that were downgraded lagged.
Research conducted by MSCI has shown that companies scoring well on ESG factors have outperformed companies scoring well on quality factors . Other studies have found combining both to be a stronger predictor of long-term outperformance.In recent years, social factors have outperformed relative to governance and environmental factors, particularly in the US. This may be because people are key assets for many structural growth businesses.
Pengina Capital is an ESG investor so they’re going to pimp it. Fortunately some light on the horizon as elonmusk and others call ESG out for what it is - a grifters game. ESG