Scientific Beta
It is difficult to overstate the lack of consistency in ESG data. While ESG performance continues to gather momentum and play a critical role in the investment decision-making process, has a flashy acronym morphed into a marketing strapline as opposed to a foundation for robust analysis? Abraham Lioui, Professor at EDHEC Business School and member of the EDHEC-Scientific Beta Research Chair, will be participating in a webinar presented by Capital Monitor on 21 October 2021 at 2.00pm BST to examine this and other questions.
Abraham Lioui, Professor at EDHEC Business School and member of the EDHEC-Scientific Beta Research Chair, will be participating in a virtual event entitled "Sustainable Investing: Are ESG Ratings Fit For Purpose?" chaired by Daniel Flatt, Editor-in-Chief of Capital Monitor on 21 October 2021 at 2.00pm BST.
It is difficult to overstate the lack of consistency in ESG data. While ESG performance continues to gather momentum and play a critical role in the investment decision-making process, has a flashy acronym morphed into a marketing strapline as opposed to a foundation for robust analysis? The proliferation of ESG rating providers has armed investors with ability to analyse more data than ever before when assessing how their investments are contributing to a more sustainable future. Yet, despite an explosion in the number of firms contributing to the ESG reporting ecosystem, there are growing concerns that the way in which ratings and rankings are determined may be contributing to greenwashing and rewarding opaqueness.
Why do some companies have such good ratings compared to others when no discernible difference exists? Who is to blame? The companies that falsely label themselves as green or the ESG asset managers who fail to filter out greenwashed funds?
The webinar will examine the following questions:
- How can investors avoid falling into the trap of taking too much comfort from ESG data’s protective blanket?
- How can investors differentiate between true sustainability and greenwashing?
- What component of ESG is cutting through the most as it relates to a company’s overall rating?
- How do we prevent asset managers including very few green prospects despite marketing the entire fund as sustainable?
- What strategies are investors implementing to combat discrepancies and understand a company’s ‘true’ contribution to sustainability
- How must ESG ratings move beyond only measuring the degree to which a company’s economic value is at risk?
- There are over 125 organisations providing ESG ratings, research, and data - how do I find out which one to trust relative to my overall investment strategy?
Abraham Lioui, PhD (Sorbonne University) is Professor of Finance at EDHEC Business School and member of the EDHEC Scientific Beta Research Chair. He was previously Professor at the department of Economics at Bar Ilan University where he held the Vice Chair position. His research interests in Finance revolve around the valuation of financial assets, portfolio and risk management, and asset pricing theory. His economics research looks at the relationship between monetary policy and the stock market. He is currently working on ESG in Factor Investing and market outcomes of climate risks.