Corporate ESG News and the Stock Market

ESG investing’s popularity has continually increased in the past five years. ESG data is increasingly integrated into investment processes. However, the information contained in ESG-related news for corporates has not been entirely exploited by institutional and long-only investors. 

The objective of this paper is to identify the benefits of ESG news information for active and factor-based investors. Indeed, one of the issues with ESG is the low frequency of scores updates. For active management, we analyze ESG-sorted portfolios in investment universes filtered by ESG news volume. Metrics of ESG-related news are sourced from Truvalue Labs, a provider of Artificial Intelligence powered ESG insights and analytics. 

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