Conventional wisdom holds that taking “non-financial” factors into account when making investment decisions will cause an investment fund to underperform. Non-financial factors include environment, human rights, labor, gender equity, etc.
Conventional wisdom is wrong.
Wrong, at least, according to a newly released meta study published in the Journal of Sustainable Finance & Investment. The study, “ESG and financial performance: aggregated evidence from more than 2000 empirical studies” concludes that “roughly 90% of studies find a nonnegative ESG-[corporate financial performance] relation [and] . . . the large majority of studies report positive findings.” (more…)