Download This PaperCorporate Governance, ESG, and Stock Returns Around the World
Financial Analysts Journal, vol. 75, no. 4 (Fourth Quarter 2019)
44 Pages Posted: 12 Nov 2018 Last revised: 31 Oct 2019
Date Written: July 30, 2019
Abstract
Non-financial performance measures, such as Environmental, Social, and Governance (“ESG”) measures, are potentially leading indicators of firms’ financial performance. I draw on the prior academic literature and the concept of ESG materiality to develop new corporate governance and ESG metrics. The new governance and ESG metrics predicted stock returns in a global investable universe over the tested period, suggesting potential investment value in curated ESG signals.
Keywords: Corporate Governance, ESG, Stock Returns, Global Equities
JEL Classification: G11, G12, G15, G30, G34, M41
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