A Blueprint for Integrating ESG into Equity Portfolios

The Journal of Investment Management, Volume 16, No. 1, 2018

20 Pages Posted: 1 Jun 2019

See all articles by Jennifer Bender

Jennifer Bender

State Street Global Advisors

Todd Arthur Bridges

State Street Global Advisors

Chen He

State Street Corporate - State Street Global Advisors

Anna Lester

State Street Global Advisors

Xiaole Sun

State Street Global Advisors

Date Written: October 1, 2017

Abstract

ESG offers a source of new and potentially valuable information for investors, impacting both potential returns and risk. Growing data availability has created the opportunity to integrate ESG into equity portfolios for a variety of investment processes, for both indexing and active management. In this paper, we provide an overview of the current data landscape and several popular methods for integrating ESG. A main challenge is that ESG data collection and aggregation methods can vary significantly across providers, leading to very different ratings for the same company. If the data issues are properly addressed, integrating ESG has important potential benefits for investors. Our “blueprint” lays out a path for any investment manager seeking to understand how ESG fits into their investment process.

Keywords: ESG, Sustainable investing, Equities

Suggested Citation

Bender, Jennifer and Bridges, Todd Arthur and He, Chen and Lester, Anna and Sun, Xiaole, A Blueprint for Integrating ESG into Equity Portfolios (October 1, 2017). The Journal of Investment Management, Volume 16, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3080381

Jennifer Bender (Contact Author)

State Street Global Advisors ( email )

1 Lincoln Street
28th Floor
Boston, MA 02111
United States

Todd Arthur Bridges

State Street Global Advisors ( email )

United States
6176645214 (Phone)

Chen He

State Street Corporate - State Street Global Advisors ( email )

United States

Anna Lester

State Street Global Advisors ( email )

One Lincoln Street
Boston, MA 02111-2900
United States

Xiaole Sun

State Street Global Advisors ( email )

United States

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