On April 20, 2016 NN Investment Partners (NN IP) published a new study demonstrating the impact of ESG factors on investment performance. The research analyzed more than 3,000 companies around the world and was conducted in partnership with the European Centre for Corporate Engagement (ECCE) at Maastricht University.
The key findings of the study are the following:
- Incremental changes in ESG (Environmental, Social and Governance) scores are better indicator of future investment performance than absolute scores
- Exclusion of companies based on controversial behaviour contributes positively to overall performance of investment portfolios
- Findings challenge traditional approaches to ESG scoring.
Jeroen Bos, Head of Equity Specialties at NN Investment Partners explains: “The results have a number of critical implications for investors. Until now ESG scoring and its application has mostly been focused on absolute scores. This research reinforces NN IP’s longstanding belief that an absolute ESG score is insufficient to provide a complete understanding of a company’s ESG behaviours and the consequences for risks and returns.”
You may read the press release on the press page of the NN IP internet site.