Do ESG Stocks Outperform?

ESG stocks have done well this year. We dive into the data to find out if this is a fluke or a new dawn

Sunniva Kolostyak 11 August, 2021 | 9:31AM
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A common argument against investing in assets with so-called environmental, social and governance (ESG) criteria is that they often don’t achieve the same high returns as the stocks without this focus.

But is that true? When looking at the long-term performance of a stock it might seem that way, but we do know past performance is not always an indicator of future returns. In fact, it only shows us that stocks that we would now class as having high or severe ESG risk have been successful in the past.

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Sunniva Kolostyak  is data journalist for Morningstar.co.uk

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