Responsible investing: New evidence, new energy

As interest in responsible investment reaches new heights, many of us want to know how to practice responsible investing - and what results investors can expect from it. 

We’ve collaborated with EY to publish a new paper that reviews existing empirical evidence on how responsible investing affects returns.

Our approach

• We began by identifying a set of hypotheses setting out how using Environmental, Social and Governance (ESG) principles could maintain or improve investment performance.
• We reviewed more than 30 academic and other published papers. This included literature reviews and meta-studies looking at over 2,000 global empirical studies during a 25-year period, to determine if the hypotheses are supported by evidence.
• The paper summarises our findings, puts them into the context of the changing appetite for responsible investment and suggests some actions that advisers can take to harness the power of sustainability for the benefit of investors.

Our findings

Our analysis shows that applying ESG principles can deliver financial benefits, both in corporate performance and in reducing volatility. This is a significant finding and is backed up by the resilience of sustainable companies in the face of challenge, not least now with COVID-19. 

Our paper

The time feels right to take a fresh look at the evidence for ESG performance. We hope our paper will add depth to the global debate around responsible investing and help support your client conversations.

Find out more about our responsible investment approach.