ESG Factors in Corporate Bond Returns: Perspectives for Academic Research and Investors
Journal of Environmental Law and Policy 40 (4), 293-298
Posted: 6 Nov 2017 Last revised: 23 Feb 2018
Date Written: December 1, 2017
In this article, I analyze the latest research on environmental, social, and governance (ESG) factors and corresponding corporate bond returns. Since the development of sustainable and ethical investing, there has been a vigorous and ongoing debate on whether ESG factors in corporate bond markets enhance returns. Unfortunately, empirical evidence on ESG factors in corporate bond markets is mixed and inconclusive. Some evidence supports positive returns, other evidence suggests a negative relation, and a third strand of the literature finds that the relation is unstable. However, research on this topic is seemingly contradictory and in this article, I address this disconnect in recent empirical research.
Keywords: ESG Factors, Socially Responsible Investing, Corporate Bonds, Sustainable Finance
JEL Classification: G11, G12, G13
Suggested Citation: Suggested Citation