Porter, Serafeim, and Kramer (2019)

Porter, Michael, George Serafeim, and Mark Kramer. “Where ESG Fails.” Institutional Investor, October 16, 2019.

Excerpt:

[W]e must revisit the relationship between economic and social performance. A currently popular idea holds that companies that score higher on rankings aggregating a myriad of ESG metrics, with little consideration of their financial materiality and its relation to the competitive strategy of a company, will deliver better shareholder returns. This is simply incorrect. Despite countless studies, there has never been conclusive evidence that socially responsible screens or company positions on lists such as the Dow Jones Sustainability Index deliver alpha. The reason is that these criteria have been developed without regard to the causal link between a company’s social impact and its bottom line.

Link: https://www.institutionalinvestor.com/article/b1hm5ghqtxj9s7/Where-ESG-Fails