High-risk Stocks are Doing Worryingly Well

Stocks with high ESG risk have made a strong comeback this year, in some cases outperforming greener alternatives

Sunniva Kolostyak 4 November, 2021 | 12:00PM
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Woman worrying

In August this year, I (perhaps naively) wrote about ESG stocks finally coming into their own, achieving returns that put high-risk companies to shame. But boy have I been proved wrong in the past month. With record gas prices and fuel demands, we are revisiting the relationship between low and high ESG risk and performance – because the narrative has certainly changed.

This summer, a Fidelity report did find a positive relationship between dividend growth and companies with a strong sustainability rating: these companies had the highest dividend growth while weaker ratings had the lowest.

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Sunniva Kolostyak  is data journalist for Morningstar.co.uk