Multi-Source ESG Arguments

This article is broad scope ESG, whether by integration with other processes or as a stand-alone process.  This article is not in my words, but is a collage of expressions by numerous important sources. Each expression has a link to the source.

This is not about narrow focus, thematic funds such as funds following religious issues, or specific social or environmental issues, for example.  It is about asset management utilizing ESG (environmental, social and governance) evaluation in the broadest sense for both inclusionary and exclusionary purposes.

Third party comments are organized under:

  • Strong Opponents
  • Professional Organizations
  • Credit Rating Agencies
  • Accounting Firms
  • Academic Research
  • Government and Agency Regulations
  • Pension Plans, Pension Associations and Publications
  • Polling Results
  • Consulting Companies
  • Popular Business Publications
  • ESG Index Providers
  • Asset Managers


Milton Friedman, 1976 Nobel Price in Economics

“[in 1970 said] there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception fraud … What does it mean to say that the corporate executive has a ‘social responsibility’ in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers …”

Kevin OLeary (“Mr Wonderful”) is Shark Tank host, founder of O’Shares ETFs and now frequent commentator, and seemingly a Friedman disciple:

“[in 2019 said] The truth is the performance has been abysmal …I think it’s thematic, it’s a fad, it’s sitting around the fireplace singing ‘kumbaya …It makes no sense to me. If you’re an institutional investor, you have to make money for your shareholders, they can take their profits and redistribute their wealth any way they want.”


CFA Institute

May 2017, 47,208 CFA Institute surveyed 47,208 portfolio managers and research analysts members online and received 1,588 valid responses … 73% of survey respondents take ESG issues into account in their investment analysis and decisions, with governance being the most common.

Harvard Law School

… Public companies are being bombarded with messages, requests and demands around “ESG”—environmental, social and governance—matters. …



At Moody’s, we seek to incorporate social considerations, where meaningful, into our credit analysis.

S&P Global Ratings

Environmental, Social and Governance risks and opportunities have the potential to affect creditworthiness. At S&P Global ratings our analysts work to ensure that we provide essential insights into ESG factors as the relate to the financial markets … we have incorporated relevant environmental, social and governance (ESG) factors, where material in our view, into the qualitative considerations and forecasts for the entities we rate …..



Pre-Financial Risks: Environmental, social and governance (ESG) risks increasingly demand the attention of chief financial officer (CFOs). Companies that aren’t addressing these issues may be caught flat-footed as these pre-financial risk become central to business strategy. …

Ernst & Young

It is clear from the latest EY research that there is a general, global trend toward increased interest in nonfinancial information on the part of investment professionals. … “One of the key benefits provided by ESG analysis for investors is risk avoidance and measurement.”


We see ESG issues as being fundamental to a company’s long-term performance, requiring serious attention in the boardroom. How a company manages environmental and social issues—and connects these activities with strategy—are important signals to investors of how well the company is run and its long-term financial sustainability…. Given the significant opportunities and risks associated with ESG, companies that excel at identifying and incorporating these issues into their strategy enjoy a competitive advantage in the marketplace and among institutional investors. It is increasingly clear that ESG and ROI are connected…

Price Waterhouse Coopers

There’s good reason for investors to put this emphasis on ESG questions. Companies with risk management practices that take into consideration broader industry, regulatory and societal risks are more likely to drive long-term sustainable performance—and shareholder value.


Harvard Business School (ESG for stocks)

Myth Number 1: Environmental, social, and governance (ESG) programs reduce returns on capital and long-run shareholder value. Reality: Companies committed to ESG are finding competitive advantages in product, labor, and capital markets, and portfolios that have integrated “material” ESG metrics have provided average returns to their investors that are superior to those of conventional portfolios, while exhibiting lower risk. …

Myth Number 5: ESG adds value almost entirely by limiting risks. Reality: Along with lower risk and a lower cost of capital, companies with high ESG scores have also experienced increases in operating efficiency and expansions into new markets …

… Myth Number 6: Consideration of ESG factors might create a conflict with fiduciary duty for some investors. Reality: Many ESG factors have been shown to have positive correlations with corporate financial performance and value, prompting ERISA in 2015 to reverse its earlier instructions to pension funds about the legitimacy of taking account of “non-financial” considerations when investing in companies.

Wharton Business School (ESG for bonds)

Companies are increasingly scrutinized on how they manage environmental, social and governance (ESG) risks. … ESG risks do affect a company’s bottom line…

Is there an alpha? How much do [stock investors have] to give up in terms of returns or can we reduce the volatility of returns? …But if you think about who takes a long-term perspective, looking 10 to 20 years out, it’s been the creditors. There has been a surge of interest looking at bonds and loans, and trying to see if better management of environment, social and governance risk factors affects loan spreads, credit spreads, or credit default swap spreads.. … There is data that shows that credit default swap spreads, credit spreads and loan spreads actually do correlate with the ESG risks….. The amount you pay goes up if you’re not very good on ESG. Credit default swap spreads are financial derivatives whose prices are correlated with the likelihood that a bond will default


Principles for Responsible Investment

… 38 of the top 50 economies have or are developing some sort of government-led ESG disclosure guidelines for corporations ..

United States Dept. of Labor / ERISA (May 2018) – Harvard Law School summary

U.S. Department of Labor issued a bulletin on its prior interpretations related to considerations of ESG factors by ERISA plan fiduciaries. Since then there has been some speculation that perhaps the positions outlined in the Bulletin would act as a speed bump to the increasing focus by investors on ESG matters at public companies.

ERISA requires plan fiduciaries to act solely in the interest of plan participants and beneficiaries for the exclusive purpose of providing benefits to such persons and to discharge their fiduciary duties with the care, skill, prudence and diligence a prudent person would use under similar circumstances.

… Managers of mutual funds and governmental pension funds are not bound by the Bulletin as these funds are not subject to ERISA and therefore not subject to DOL oversight.

The Bulletin makes clear that plan fiduciaries in managing and investing plan assets cannot assume greater investment risks, or sacrifice investment returns, to fulfill social policy goals.

… But social policy issues, which might otherwise be considered “collateral issues,” could be treated by plan fiduciaries like any other economic consideration when those issues present material business risk or opportunities that officers and directors need to manage as part of their companies’ business plans.

… plan fiduciaries cannot focus on ESG factors solely to benefit the greater societal good, or assume that ESG factors that promote positive market trends are by their nature economically relevant. However, ESG factors or tools, metrics or analyses can be evaluated if fiduciaries believe they would impact an investment’s risk or return.

European Commission (Non-Financial Reporting Directive)

EU law requires large companies to disclose certain information on the way they operate and manage social and environmental challenges. … Companies are required to include non-financial statements in their annual reports from 2018 onwards. … This covers approximately 6,000 large companies and groups across the EU

China Securities Regulatory Commission (Harvard Law School summary)

Pension funds and investment managers in China are now encouraged by the government to look closely at ESG risks and opportunities in their investment process. … these themes are also part of the newly revised Code of Corporate Governance for Listed Companies (2018) from the China Securities Regulatory Commission (CSRC);


Japan’s $1.37 Trillion Government Pension Investment Fund CIO Hiromichi Mizuno:

“Asset managers have to adjust their conventional business model. Investors will be more focused on the long-term investment theme, as AI will take over the short-term trading…In other words, investors will shift their focus to the long-term sustainability of their portfolio, and more focus on their investment themes like ESG …”

… The world’s largest pension fund takes a strong stance. Japan’s Government Pension Investment Fund with US$1.4 tn of assets under management now requires external asset managers to incorporate ESG. GPIF’s size and focus on ESG integration is having a material impact on investor stewardship and engagement with ESG, including for passive asset managers …

Investment and Pensions Europe Magazine

Nobel prize-winning economist Milton Friedman argued that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception fraud”. His views influenced generations of academics and corporate executives.

Friedman stated in his 1970 article for the New York Times: “What does it mean to say that the corporate executive has a ‘social responsibility’ in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers.”

Institute for Pension Fund Integrity

In our experience, long-term value creation is not possible for companies entangled with ESG controversies.


Harvard Institute of Politics

… survey, done by Harvard University in 2016, showed that a majority of millennials reject capitalism. According to the data, 51% of young adults aged 18 to 29 said they didn’t support capitalism …

Pensions & Investments (on Edleman survey)

(surveyed 500 CIOs and buy-side analysts managing $4.5 Trillion assets) … Most institutional investors demand public companies address environmental, social and governance issues to be regarded as trustworthy … It’s plain to see that ESG is a major criteria for investors … this is a meaningful shit within the investment community in terms of critical mass being reached …

State Street Global Advisors

According to a survey of 475 institutional investors … more than half of institutions that have adopted environmental, social and governance (ESG) investing cite a lack of clarity over ESG terminology.

Bank of America Merrill Lynch

… we analyzed (2005 to 2017), S&P 500 stocks with high Environmental scores based on the three datasets we analyzed would have outperformed their low ranked counterparts by as much as 3ppt per year. An investor who only bought stocks with above-average Thomson Reuters’ Environmental and Social scores five years ahead of a company’s bankruptcy would have avoided 90+% of the bankruptcies that occurred in the S&P 500 since 2005. And ESG is a better signal of earnings risk than any other metric we have found. ..

Morgan Stanley

June 2018 Morningstar polled 118 public and corporate pensions, endowments, foundations, sovereign wealth entities, insurance companies and other large asset owners worldwide

Compared to the investment universe as a whole, more than one quarter of the world’s professionally managed assets— roughly $22.9 trillion—now have some sort of sustainable investing mandate, with about $8.7 trillion of that in the United States, $12 trillion in Europe and the rest shared by other regions.

consumer trends point toward greater returns for sustainable companies. Nearly nine in 10 (87%) U.S. consumers say they will purchase a product because of a company’s stance on an issue they care about, and 78% say they want companies to address important social issues…. Among millennials, this is even more pronounced. Our 2017 survey of individual investors found that millennials are more than twice as likely as other generations to purchase products from companies they view as sustainable.

… fully 78% of respondents listed risk management as an important factor driving their adoption of sustainable investing.

a majority (57%) continued to believe that investing sustainably requires a financial tradeoff.8 While this perception may have grown out of early views of ESG as a negative screen that narrows the investment universe, it appears that large institutional asset owners may be replacing this view with a more sophisticated recognition that ESG factors provide unique insights into long-term risks and opportunities that might not be captured by traditional financial factors. The belief in a trade-off appears to be fading

ESG Integration ESG integration—proactively considering ESG criteria alongside financial analysis—emerged as the most common approach …More than half are required to do so by their Investment Policy Statement

Restriction Screening Restriction screening, employed by 85% of respondents, intentionally avoids investments generating revenue from objectionable activities, sectors or geographies

Thematic Investing Thematic investment strategies, used by 81% of respondents…


Callan Associates (pension consultants)

3% of US institutional investors incorporated ESG factors in 2018 vs 22% in 2013

McKinsey & Company

Strengthening risk management. Institutional investors increasingly observe that risks related to ESG issues can have a measurable effect on a company’s market value, as well as its reputation. Companies have seen their revenues and profits decline, for instance, after worker safety incidents, waste or pollution spills, weather-related supply-chain disruptions, and other ESG-related incidents have come to light. ESG issues have harmed some brands, which can account for much of a company’s market value. Investors have also raised questions about whether companies are positioned to succeed in the face of risks stemming from long-term trends such as climate change and water scarcity.

Bain & Company

… the investor community will fully integrate environmental, social and governance (ESG) considerations into its investing approach.

There is no question that sustainability is moving up on the corporate agenda. When Bain & Company surveyed 297 global companies, 81% said sustainability is more important to their business today than it was five years ago, and 85% believe that it will be even more important in five years. The evidence is everywhere. Sustainability is now incorporated into two-thirds of companies’ core missions …

Boston Consulting Group

…For decades, most companies have oriented their strategies toward maximizing total shareholder return (TSR). This focus, the thinking has been, creates high-performing companies that produce the goods and services society needs and that power economic growth around the world. According to this view, explicit efforts to address societal challenges, including those created by corporate activity, are best left to government and NGOs.

Now, however, corporate leaders are rethinking the role of business in society. Several trends are behind the shift. First, stakeholders, including employees, customers, and governments, are pressuring companies to play a more prominent role in addressing critical challenges such as economic inclusion and climate change. …


Our analysis indicates that, in general, increasing exposure to ESG rarely underperforms the market, and often outperforms the market,…

… to what extent are ESG scores different from the factors found in commercial fundamental factor risk models, such as value, size, industries and countries? … To the extent that ESG scores overlap with traditional factors, then ESG can be interpreted as beta (“smart beta” to the marketers); to the extent these scores do not overlap with traditional factors, then ESG can be interpreted as residual, idiosyncratic or company specific (“alpha” to the quants).

Addition of ESG may not always boost performance, but it also appears unlikely to be a significant drag on performance. And there have been periods of time across multiple regions in which ESG has improved performance.

Finally, we note that there is no standard, accepted methodology for combining separate E, S, and G scores into a composite ESG score. It is possible, indeed, likely, that ESG scores from different vendors will exhibit different performance characteristics.


The Economist

Two perennial questions have accompanied the deluge of money. The first is whether the approach comes with special costs: ie, is there a virtue discount? Second is the question of what should be measured. Neither is easy to answer

…One attempt to answer the first looked at the converse: were returns higher for shares that would not qualify for inclusion in these efforts: in other words, is there a vice premium? … A paper published in 2009 called “The Price of Sin”, by Harrison Hong and Marcin Kacperczyk, two academic economists, concluded that there were indeed unusual returns in firms that sold tobacco, alcohol and gambling. …

However, a second paper published this year (“Sin Stocks Revisited”, by David Blitz of Robeco Asset Management and Frank Fabozzi of EDHEC Business School) contests these results. It argues that added risk factors such as low reinvestment rates mean that there is no evidence that sin stocks provide a premium for reputation risk. Robert Whitelaw, a professor at New York University’s Stern School of Business, says that the conflicting analyses reflect the broader results of more complex efforts aimed at tracking results from (“virtuous”) companies that would qualify for these funds. Results are mixed.


…. Of the world’s largest 250 companies, 92 percent reported in some way on their social and environmental impact in 2015

Alternative Bottom Lines …Numerous terms are used for investments that consider social and environmental effects. Many are used interchangeably [but they are not the same].

  • exclusionary screening, divestment, negative screening
  • ESG (environmental, social, governance), positive screening, active ownership
  • impact investing, double-bottom line investing, thematic strategies
  • values-based investing, fait-based, responsible, ethical or mission related

…Warren Buffett has pledged to give his fortune away but has said social-impact agendas in business force executives to pursue a confusing array of goals. Free-market guru Milton Friedman decried them in a 1970 essay that’s still debated today. … Advocates of sustainable agendas dispute the premise that there must be a cost. They cite studies in which companies with such goals financially outperformed companies without them, though researchers face a challenge proving it was the strategy that created better results… In any case, better information is needed to determine how companies perform on non-financial goals.


…ESG factors cover a wide spectrum of issues that traditionally are not part of financial analysis, yet may have financial relevance. … Institutional investors were initially reluctant to embrace the concept, arguing that their fiduciary duty was limited to the maximization of shareholder values irrespective of environmental or social impacts, or broader governance issues such as corruption. … But as evidence has grown that ESG issues have financial implications, the tide has shifted. … The idea that investors who integrate corporate environmental, social and governance risks can improve returns is now rapidly spreading across capital markets on all continents. …Cynics may argue that responsible investing is just a fad. But a closer look at the forces that have driven the movement over the past 15 years suggests otherwise. … For investors, ESG data is increasingly important to identify those companies that are well positioned for the future and to avoid those which are likely to underperform or fail. …


…Today there’s a growing body of evidence showing that companies that put social responsibility first can also finish first in the market. … When companies make decisions that show respect for the environment, their communities, and their employees, there’s less likelihood that they’ll be hit with the kinds of fines, public backlash, and boardroom turmoil that can slam their share prices. … There’s also a strong correlation between ESG-minded management and longer-term strategic thinking—another factor that increasingly distinguishes top companies from laggards.


According to ESG advocates, companies that stand out in these areas will be more successful over the long haul than companies that don’t. … The knock on all social investing strategies has been that … you sacrifice some return. Morningstar analyst David Kathman says maybe not. “There is no evidence that shows ESG or socially responsible investing helps or hurts performance …Over the long term, it probably evens out.”


MSCI (largest provider of ESG data in the world)

Lower risk of severe incidents … Over the past 10 years, higher ESG-rated companies showed a lower frequency of idiosyncratic risk incidents, suggesting that high ESG-rated companies were better at mitigating serious business risks.


In 2018, most major asset managers are committed to incorporating ESG criteria and risk factors in their investment … As increasing numbers of investors seek to integrate sustainability and ESG risk factors in their investment strategies, it is becoming clear that there is a lack of clarity with regard to the various approaches adopted as well as a sense of frustration that there is no general consensus about what is financially material in this context. … Investors are generally asking, “Which factors and underlying data should we consider,what are the key sources of ESG risks and subsequent value creation for a particular industry or company, and which long-term risk patterns are likely to have a negative impact on these value drivers?” … ESG performance can be directly related to companies’ revenues and costs … allows investors to hedge potential portfolio drawdowns, i.e. a certain minimum frequency of severe risk incidents related to a particular ESG issue in a specific sector is XX % likely to have a negative impact of at least YY bps and increase beta of a stock by ZZ %.

JUST Capital Foundation

… companies who invest in their employees, treat their customers well, work to create quality products, are sustainable, care about their communities, create jobs, and have ethical benefit employees, consumers, communities, and the environment, [but do they] benefit shareholders and the companies themselves … do JUST stocks outperform over the long-term? … Since its November 30, 2016 inception through September 2018, the Index has cumulatively outperformed the Russell 1000 … [but] does the Index provide a positive alpha, or unexplained investment residual, after controlling for the five Fama-French factors? After running a regression of the daily [index] excess return over the Russell 1000 on the five Fama-French factors from December 1st, 2016 through August 31, 2018 … we’d answer yes, it does.



One of the most frequently asked questions is whether an investor can “do good and do well” when screening portfolio. … A simple yes-or-no answer is no reasonable because there are a variety of potential inclusionary and exclusionary screening preferences … There is currently no industry consensus on this answer and commonly cited meta study has shown mixed results …


ESG Investing (environmental, social, and corporate governance) used to carry the stigma that investors needed to make certain concessions in order to participate. But research shows you don’t necessarily have to sacrifice performance or price when choosing investments that make a positive impact.

Wellington Management

“Evidence shows that companies that have better ESG management tend to outperform in the long term, and they’re more resilient during times of economic downturn,” says Christina Zimmerman, manager of ESG research at Wellington Management. “We do this to get better risk-adjusted returns.”


“If you don’t take it [ESG] into account, you miss part of the puzzle when evaluating a company,”

Neuberger Berman

Neuberger Berman believes that ESG considerations are an important driver of long-term investment returns from both an opportunity and a risk mitigation perspective

Northern Trust

Is ESG such a factor?With some caveats, we feel that ESG can indeed be utilized as a factor in portfolio construction.most academic studies on the topic suggest that at worst the relationship between ESG and corporate financial performance is at least non-negative.

What makes ESG unique is the degree of disagreement regarding what should go into an ESG score and how those metrics should be weighted. Further, there are no simple ESG definitions, no book-to-price equivalent of ESG that can be applied universally. … When building a quantitative, factor-based portfolio, we feel that these ESG ratings are best used when integrated with certain other financial factors.

Specifically , we find that ESG and quality make a particularly potent factor combination as each factor captures a different dimension of sustainability — non-financial and financial. … he jury is still out on whether ESG is a compensated risk factor.


We find ESG can be implemented across most asset classes without giving up risk-adjusted returns. … ESG-friendly portfolios could underperform in ‘risk-on’ periods – but be more resilient in downturns. … Early evidence suggests that focusing on ESG may pay the greatest dividends in emerging markets (EMS).

State Street Global Advisors

… while accidents and impropriety can happen at any time, the ESG themes manifest themselves over longer time horizons as opposed to more traditional financial metrics whose consequences can impact more quickly. … ESG information tends to be the most effective at identifying poor ESG firms that are more likely to underperform as opposed to predicting future outperformers.


Since the Forum for Sustainable and Responsible Investment (US SIF) began researching SRI in 1995, the assets in these types of investments have grown from $639 billion to nearly $12 trillion. That’s an 18-fold increase and a compound annual growth rate of 13.6%.1

Additional data from Morningstar shows that, on average, SRI mutual funds have slightly outperformed their non-SRI counterparts in the short, medium and long terms …

GMO (Grantham, Mayo & Van Otterloo) – login required

EM … countries are generally both more vulnerable to ESG issues and less prepared to deal with them. … although ESG signals are worth integrating in all strategies …

performance and integration of ESG data in an investor’s EM country and stock selection processes. …

the value in integrating ESG into investment decisions as it impacts security valuations through a host of avenues such as the volatility of earnings, resilience of assets, and the cost of capital …

EM countries are more vulnerable to the ill effects of ESG issues as they have far greater exposure to extreme weather events (e.g., floods, droughts); resource scarcity (e.g., water, food); social unrest; corruption; and poor governance

AQR Capital Management (in Journal Of Investment Management)

… we show that poor ESG exposures predict increased future statistical risks. While the effect is modest in magnitude, it is consistent with ESG exposures conveying some information about risk that is not captured by traditional statistical risk models. … ESG exposure tends to predict increases in statistical risks (i.e., risks captured by traditional risk models) in the future. Controlling for current risk characteristics of a given stock, that stock’s ESG score helps forecast future statistical risks up to five years later. In other words, ESG exposures may convey information about future risks that are not captured by statistical risk models….

…the total volatility of the average stock in the first quintile (worst ESG) is 35%, versus 30% for the average stock in the fifth quintile (best ESG). …

Goldman Sachs

… a revolution rising – from a low chatter to a loud roar … ESG factor allows for greater insight into intangible factors such as culture, operational excellence and risk that can improve investment outcomes … nearly half of all S&P 500 companies addressed ESG issues in Q4 2017 conference calls … society’ rally call on ESG topics are getting louder … Twitter posts mentioning ESG topics grew 19x over the last five years …

Environmental and social shareholder proposals represented 41% of all documented shareholder proposals in 2017, up from 33% in 2016, including contributions from BlackRock, Vanguard, Fidelity, Capital Group and others …

…Social media platforms such as Facebook, Twitter and Glassdoor have handed society a powerful megaphone. The speed and scale at which news now spreads expose companies to new reputational risks and in effect holds them more accountable to internal and external ESG issues. …

… according to surveys from Deloitte and Cone Communications (part of Omnicom Group), responsible business practices have a profound effect on Millennial’s views of business and ultimately their employment decisions. …

…ESG is directly impacting credit ratings, as agencies integrate ESG factors into their risk assessment and ratings methodologies …

BlackRock CEO Larry Fink: “Environmental, social, and governance (ESG) factors relevant to a company’s business can provide essential insights into management effectiveness and thus a company’s long-term prospects”

T. Rowe Price CIO Rob Sharps: “Environmental, social and governance factors are important in any comprehensive investment research process.”

Putnam Investments CIO Aaron Cooper: “There is a growing realization in the marketplace that companies engaged in sustainability often show enhanced fundamental and financial performance”

GMO Founder and CIO Jeremy Grantham: “Interest in ESG isn’t necessarily because of the rush of blood to being good. It could be just good business. … There’s quite a lot of work that suggests that people who are early movers on good behavior are demonstrating that they are simply thinking more about the future, how it will look, how it will play out over 10 or 15 years.”

Martin Currie

Martin Currie believes ESG is especially valuable in emerging markets where corporate governance standards are often more complicated.

Putnam Investments

Deep fundamental research plus intense sustainability analysis are at the heart of our investment process.

Russell Investments

…when investors seek value these days, they often end up with securities that represent values – an alignment with increasingly popular environmental, social and governance (ESG) principles. …we identified positive ESG tilts as consistent with many fundamental investment processes.

… We had heard that ESG might be value-detracting, so we expected to see a negative tilt in active portfolios. Instead, we discovered that many active managers, who are seeking to add value over their benchmarks, actually have positive ESG tilts. In a number of regions, more active managers have positive ESG tilts than negative ESG tilts.

This finding suggests that positive ESG tilts are consistent with managers’ intent to add long-term value through security selection. While the manager may or may not be purposefully screening for ESG factors, their investment criteria are identifying securities that in fact result in significant ESG tilts. Think of this as latent ESG.

Bank of America / Merrill Lynch

…we recommend using ESG in conjunction with fundamental attributes like valuation, growth and quality. In this report, we analysed results from combining ESG with other fundamental factors, and found that adding ESG would have consistently outperformed fundamental strategies with less risk. For example, dividend investors who had added ESG to their process would have increased their average returns by ~200bps per annum….

… Is ESG just another Wall Street fad? We see sticking power…

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