This study analyzes performance metrics shows that focusing on non-financial indicators and individual sub-criteria can uncover opportunities that may be hidden by an overall ESG score.
Key points
The true performance within ESG has derived from the more granular elements composing ESG and E, S and G pillars across the Eurozone, North America and Emerging Asia equity markets between July 2021 and September 2023.
For the Eurozone and Emerging Asia, on the E pillar, we found that Emissions & Energy’s performance depends on commodity prices. It showcases how the sector neutralities that can be embedded within ESG scores are not enough to immunize ESG performance from macro sensitivities.
In North America, the anti-ESG movement has not translated into alarming losses. In fact, the Waste & Biodiversity pillar of the environmental score pulled out strong performance over the period, indicating that investors may have deserted the top level ESG in their investment styles but have not abandonned ESG in their investment philosophy, as we can witness with the development of thematic and impact investing.
