ESG Investment Outcomes, Performance Evaluation, and Attribution

34 Pages Posted: 21 Oct 2022

See all articles by Stephen Horan

Stephen Horan

CFP Board of Standards; University of North Carolina Wilmington

Elroy Dimson

University of Cambridge - Judge Business School; European Corporate Governance Institute (ECGI)

Kenneth Blay

INVESCO Global Asset Management, N.A.

Glen K. Yelton

INVESCO Global Asset Management, N.A.

Ankit Agarwal

INVESCO Global Asset Management, N.A.

Date Written: October 17, 2022

Abstract

ESG strategies have experienced a massive inflow of capital over the past decade despite investors having little concrete evidence that ESG investing accomplishes its purported goals. It has also happened without investors having the information, tools, and methods needed to evaluate and communicate their specific ESG values, objectives, and preferences. Without evidence of efficacy and clearly articulated investment objectives, it is impossible for investors with ESG intent to know if they are getting what they are paying for, to distinguish between investment managers based on non-financial objectives, or to improve the likelihood of achieving positive ESG investing outcomes. This paper highlights key challenges faced by ESG investors and portfolio managers implementing ESG investment mandates. It then addresses these challenges focusing on relevant fund reporting, provides guidance on the information required to make informed ESG investing decisions, and proposes a performance evaluation and attribution framework to support the ESG investment management process.

https://doi.org/10.56227/22.1.14

Suggested Citation

Horan, Stephen and Dimson, Elroy and Blay, Kenneth and Yelton, Glen K. and Agarwal, Ankit, ESG Investment Outcomes, Performance Evaluation, and Attribution (October 17, 2022). CFA Institute Research Foundation Briefs, October 2022, https://doi.org/10.56227/22.1.14, Available at SSRN: https://ssrn.com/abstract=4255108

Stephen Horan (Contact Author)

CFP Board of Standards ( email )

1425 K Street NW #800
Washington, DC 20005
United States

University of North Carolina Wilmington ( email )

601 South College Road
Wilmington, NC 28403
United States
4342272281 (Phone)
28405 (Fax)

Elroy Dimson

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 700 607 7390 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Kenneth Blay

INVESCO Global Asset Management, N.A.

Atlanta, GA 30309
United States

Glen K. Yelton

INVESCO Global Asset Management, N.A.

Atlanta, GA 30309
United States

Ankit Agarwal

INVESCO Global Asset Management, N.A.

Atlanta, GA 30309
United States

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