On November 24, 2016 CNBC reported on the results of an RBC Global Asset Management survey about socially responsible investment. According to the survey and the article, “values based” investing has increased among major money managers yet many opine that it neither improves performance nor reduces risk. According to the article, “(a)nalysts attributed the lukewarm sentiment toward environmental, social and governance (ESG) investing to a lack of data that shows significant benefits of applying a values-based strategy.”
Notwithstanding the above, or perhaps contradicting it, the article notes that “(i)nvestment strategies focused on companies with a focus on ethical practices perform particularly well when applied to emerging market stocks.” High litigation costs due to low labor standards is offered as one reason why the ESG strategy is more effective in emerging markets. Survey respondents noted the challenge of obtaining ESG information in emerging markets, in terms of quality and quality of data disclosed.
You may read the article on the CNBC internet site.