The latest research from the Global Equities team at Federated Hermes indicates that despite market volatility and the energy crunch, ESG continues to be an effective performance indicator. Our previous research confirmed the link between social and governance factors . In the latest findings, the importance of environmental metrics is evidenced, with the best placed companies performing ahead or in line with peers, while poorly ranked companies tend to significantly underperform.
In our 2020 release, we demonstrated that governance and social factors were a statistically meaningful driver of shareholder returns. The pandemic cemented the importance of social impact, with more socially responsible companies tending to outperform . Previously there was weak evidence that environmental factors had similar properties, but the historic relationship was volatile and did not reach the necessary hurdle to be considered significant. That has changed over the last two years, with environmental factors performing on a par with social and governance. This confirms that across the environmental, social and governance pillars, the link between ESG and performance is clearly in evidence.
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Supporting documents
Click link to download and view these filesDespite headwinds, ESG continues to perform
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