Scientific Beta

Financial Review: "But a study by Scientific Beta which analysed returns from ESG strategies against well-known factors such as value, growth, quality and momentum, dug deeper. The study found that returns from ESG were dominated by the contribution from the quality factor. That is, stocks with high ESG scores delivered strong returns, not because of their leadership on ESG metrics, but because they generated high returns on equity and had limited debt, both of which are characteristics of good businesses."

Financial Review 27/05/2021

"(...) But a study by Scientific Beta which analysed returns from ESG strategies against well-known factors such as value, growth, quality and momentum, dug deeper. The study found that returns from ESG were dominated by the contribution from the quality factor. That is, stocks with high ESG scores delivered strong returns, not because of their leadership on ESG metrics, but because they generated high returns on equity and had limited debt, both of which are characteristics of good businesses. The report also attributed the strong performance in ESG stocks to what it called ‘high attention’ as they benefited from strong inflows as more funds are directed to sustainability funds. But over time, it found this effect dissipates. (...)"