Companies with recent ESG rating gains may outperform benchmarks

Investing in companies that are gaining momentum in a drive to improve their record in ESG factors may be key to outperforming the market, according to research by index provider MSCI.

For the research, MSCI adopted an ‘ESG momentum’ strategy by overweighting stocks that had improved their ESG ratings (according to MSCI’s own calculations) in the preceding 12 months. The firm also adopted an ‘ESG tilt’ strategy that overweights companies that have already established high ESG ratings.

The performance obtained from the two strategies was then compared with the MSCI World Index. The ESG momentum strategy offered an annualized return of 2.2 percent over the benchmark while the ESG tilt strategy had an annualized return of 1.1 percent.

Hier gehts's zum Artikel, erschienen im IR Magazine.