Scientific Beta

The Edge Singapore: "Index provider Scientific Beta collected market participants’ views on its recent white paper, Honey, I Shrunk the ESG Alpha: Risk-Adjusting ESG Portfolio Returns, which questions the popular belief that ESG strategies outperform traditional portfolios. The study claims that the ESG alpha disappears when adjusted for industry and factor exposures."

The Edge Singapore 24/12/2021

"(...) Then, there is the oft-repeated mantra that ESG almost certainly guarantees higher returns. Is this a sustainable outperformance, or one kept afloat by today’s ESG exuberance? Index provider Scientific Beta collected market participants’ views on its recent white paper, Honey, I Shrunk the ESG Alpha: Risk-Adjusting ESG Portfolio Returns, which questions the popular belief that ESG strategies outperform traditional portfolios. The study claims that the ESG alpha disappears when adjusted for industry and factor exposures. “Most of the respondents agree that there is no sound evidence that ESG strategies offer any incremental value in terms of performance, and that most of the performance is captured by style factors,” says Scientific Beta in a Nov 9 release. “Only 17% of respondents believe that the finding of absence of outperformance is surprising,” adds the independent index provider, which is 93% owned by the Singapore Exchange (SGX) as at January 2020. (...)"