Extensive study, Deutsche Asset & Wealth Management and the University of Hamburg investigate:
The results of this mega-study covering the entire globe show that only 10% of the studies display a negative ESG-CFP relationship with an overwhelming share of positive results, of which 47.9% in votecount studies and 62.6% in meta-studies yield positive findings.
How environmental, social and governance (ESG) criteria affect corporate financial performance (CFP) has been an area of academic and practitioner interest since the early 1970s. However, one of the main difficulties has been to establish a clear picture of the correlation between ESG and CFP. Indeed confidence has been undermined by some studies concluding that incorporating ESG in the investment process has delivered ambiguous, inconclusive or contradictory results.
If the number of empirical studies is a reliable guide, then investor interest in ESG has surged over the past 40 years. Since the early 1970s, around 2,250 academic studies have been published on the link between ESG and CFP 70% of which have been published during the last 15 years. This surge in academic literature also tallies with the growth in assets under management dedicated to ESG investments.
In this white paper, is drawn out the main conclusions from a joint Deutsche Asset & Wealth Management and University of Hamburg study. This study examines the entire universe of ESG-CFP academic review studies that have been published since 1970.
The analysis is based on the aggregation of the findings and data of 60 review studies. This probably therefore represents the most extensive review of academic literature as it relates to ESG and CFP ever undertaken.
This 2015 study also continues previous work undertaken by Deutsche AWM in June 2012 in the report “Sustainable Investing: Establishing Long Term Value and Performance”, which concluded that companies with high ratings for ESG and CSR have a lower cost of capital in terms of debt and equity.
Download the report here.