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Why Your Portfolio May Be Hot, Cold or Just Right 

Investors may want to understand not only if their portfolios are aligned with global climate goals but why they may (or may not) fall short of the mark. A performance-attribution analysis can help them understand how “hot” or “cold” their portfolios are.

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Climate Matters: What’s in an ESG Rating. And What’s Not. 

ESG ratings are widely used in active management and ESG indexes, with a growing focus on climate change. This has increased debate around two questions: Why are ESG ratings so different across providers? And how do ESG ratings reflect climate risk?

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Constructing Net-Zero Portfolios: Three Approaches 

While investors around the world are committing to bring the carbon footprints of their portfolios to net-zero by 2050, figuring out how to do so is not a simple matter. What alternatives do investors have?

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How Have Stocks Responded to Changes in Climate Policy? 

To what extent has climate risk been priced into equity markets? Is there a “brown” discount and a “green” premium? Has this shifted over time? How can we model such risks as the world moves toward net-zero targets? We examine the financial impact of climate transition risk on global equity markets.

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Is ESG Investing a Price Bubble? Probably Not. 

Inflows into ESG funds have soared in recent years and months, in part motivated by outperformance since the COVID-19 pandemic erupted. But have these inflows become a self-fulfilling prophecy, creating an ESG bubble?

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Managing Climate Risk in Equity Portfolios: A Case Study 

Institutional investors are increasingly focused on mitigating their climate-related risks. How could a “typical” active global equity manager have managed these exposures without disturbing the portfolio’s risk and return characteristics?

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ESG Ratings: How the Weighting Scheme Affected Performance 

Our recent research suggests that environmental and social issues were more industry specific and tended to show up in financial measures over a longer time frame compared to governance issues. How can E, S and G issues be combined?

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Which ESG Issues Mattered Most? Defining Event and Erosion Risks 

Very different ESG issues can be material for different industries. Our research suggests that risks can be divided into two main types: “event” risks and “erosion” risks to companies’ long-term competitiveness. Which ones mattered most for E, S and G?

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Welche ESG-Kriterien waren die wichtigsten? Definition von Ereignis- und Erosionsrisiken 

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Geht es bei ESG nur um das „G“? Das hängt von Ihrem Zeithorizont ab 

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Is ESG All About the ‘G’? That Depends on Your Time Horizon. 

The conventional wisdom has it that governance is the most dominant of the three E, S and G pillars. But our analysis finds different results when looking at contribution to performance over different time horizons.

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MSCI ESG Indexes during the coronavirus crisis 

The COVID-19 outbreak is the first real-world test since the 2008 global financial crisis of the resilience of companies with high MSCI ESG Ratings. We analyze the performance of four standard MSCI ESG Indexes over Q1 2020 and longer periods.

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新冠疫情期间的 MSCI ESG 指数 

在新冠疫情的恐慌抛售期间以及更长时期内，我们将四个全球 MSCI ESG 指数与其母指数进行了比较。

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Quitting tobacco stocks without going through withdrawal 

Despite strong headwinds, including renewed divestment pressure,1 the tobacco industry has proved quite resilient financially and outperformed the stock market over the past 18-1/2 years. So much so, that some institutional investors are now thinking of lifting tobacco bans in their investment policies. We found that most of the gains associated with holding tobacco stocks over this period were not specific to the tobacco industry, and could have been obtained in other ways. We also show it would have been possible to divest from tobacco without taking a hit to portfolio performance during our sample period.

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Investing for the Long Run: ESG and Performance Drivers 

We see a growing number of institutional investors seeking to avoid financial risks associated with environmental, social and governance (ESG) factors, or even to enhance returns by investing in companies that have strong ESG track records. As we wrote in an earlier blog post, these investors are typically looking to limit the number of companies excluded from their portfolios, both to avoid sacrificing diversification and to be active owners able to engage with corporate management.