ESG Ratings in Global Equity Markets: A Long-Term Performance Review

Research Paper
Guido Giese, Drashti Shah
September 19, 2025
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In this paper, we review the financial performance of MSCI ESG Ratings in global (MSCI ACWI Index) and developed (MSCI World Index) markets over the course of their history of 11 and 17 years, respectively.

A key difference between MSCI ESG Ratings and traditional market-risk factors such as value or momentum is the fact that MSCI ESG Ratings assess corporate risk rather than market risk. Our study was therefore based on both a fundamental performance assessment (how differences in ESG ratings were associated with differences in earnings and profitability) and a stock-price performance assessment. This is important to understand to what extent (if observed) better corporate-earnings fundamentals were transmitted into better market performance, which we called the "transmission channel."

Using a standard quintile analysis on MSCI ESG scores (controlled for sectors, regions and company size), we found that companies with higher MSCI ESG Ratings outperformed their lower-rated counterparts across both the MSCI ACWI Index and the MSCI World Index over the study periods.

©2025 With Intelligence. Republished with permission from the Journal of Impact & ESG Investing, from: Guido Giese and Drashti Shah. 2025 "ESG Ratings in Global Equity Markets: A Long-Term Performance Review." Journal of Impact & ESG Investing 6, no. 1 (fall).

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Transmission channels of how ESG may affect financial performance and risk
Transmission channels of how ESG may affect financial performance and risk
Source: MSCI ESG Research
Guido Giese
Guido Giese
Managing Director, MSCI Research & Development
Drashti Shah
Drashti Shah
Senior Associate, MSCI Research & Development

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