On November 3, 2016 Chief Investment Officer reported on a new study by Cambridge Associates that demonstrates that environmental, social and governance (ESG) factors can have a significant positive impact on emerging markets portfolios.
“The study, which compared the performance of two MSCI emerging market indexes over the last three years, found that the ESG index outperformed its parent index by a cumulative 12 percent on a total return basis. More than half of that outperformance was attributed solely to ESG factors such as renewable energy and business ethics.”
The study demonstrates that as more ESG data becomes available, it can be an important tool for selecting portfolio companies in emerging markets, where underlying ESG risks are higher than in developed markets.
You may read the article on the Chief Investment Officer internet site.