ESG Research Update

ESG Research Updates

Ethical investment performance solid during coronavirus

Ethical investment portfolios have demonstrated solid performance during the coronavirus crisis when compared with regular investments, a Fidelity report says. Fidelity identified a significant correlation between stronger market performance and strong performance for ESG factors. The hypothesis at the start of the research was that companies showing strong sustainability issue management had more prudent management teams, and thus would weather the crisis better. The data that came back supported the hypothesis.

AXA: ESG-tending funds do better during coronavirus

AXA Investment Managers data shows that during the COVID-19 crisis, those funds and strategies with an ESG weighting outperformed those without this bent. The AXA client note said that firms with the highest ESG ratings proved more resilient during the coronavirus market crash than those with the lowest scores. When it came to stocks, ESG Leaders outperformed ESG Laggards by 16.8 per cent in the first quarter. Fixed income bonds in the ESG Leaders category did better by 5.2 percentage points. ESG Leaders in both categories outperformed the parent benchmark index.

In a different analysis, the impact of AXA’s company-wide exclusion policies showed that stocks applying exclusion lists outperformed the parent benchmark index by 47 percentage points. Stocks ranked by AXA-IM as ESG Leaders saw a market return of -14.5 per cent for the first quarter, while ESG Laggards saw a market return of -31.3 per cent. The MSCI ACWI index, for comparison, returned -19.6 per cent.