The Link Between Sustainability Investing and Financial Returns: An Asset Management’s Perspective

Daniel Ung ()
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Daniel Ung: ETF Division of a Global Asset Manager

Chapter Chapter 6 in Corporate Sustainability in Practice, 2021, pp 97-110 from Springer

Abstract: Abstract In this chapter, the investment industry’s latest perspective on sustainabilitySustainability (ESG)Environmental, Social and Governance (ESG) investing and financial returnsFinancial return is examined. The traditional view is that sustainabilitySustainability investing, and financial returnsFinancial return are fundamentally incompatible with each other and investors have to cede financial returnFinancial return potential in order to invest sustainably. However, before examining the merit of this view, it is important to clarify the definition of ESGEnvironmental, Social and Governance (ESG) investing, which encompasses a diversity of investment styles; and each style is likely to lead to distinct investment outcomes. Of similar importance is the quality of ESGEnvironmental, Social and Governance (ESG) data, especially in light of the many different ESGEnvironmental, Social and Governance (ESG) data providers in the marketplace, each using its own approach to compile sustainabilitySustainability scores. The chapter starts by reviewing the reasons for which there is an increased adoption of ESGEnvironmental, Social and Governance (ESG) investing in the asset management industry, given that this investment style is not new.

Keywords: Sustainability; ESG integration; Impact investing; Values investing; Financial return; Sustainability Accounting Standards Board (SASB); Financial risk (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-3-030-56344-8_6

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DOI: 10.1007/978-3-030-56344-8_6

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