The eurozone continues to outperform North America when it comes to environmental, social and governance (ESG) investing, according to a report.
Research commissioned by Paris-based Amundi Asset Managment found that returns on ESG investing have been squeezed since 2018.
The report also found that in Europe, the social pillar now has the strongest impact of the three, indicating that environmental and governance factors are not the only concerns for investors.
In addition, ESG is no longer about exclusion for most firms but is now integrated into the stock picking processes.
The reseach was based on data from 2018-2019 from 1,700 companies across five investment universes, corresponding to MSCI indices: MSCI North America, MSCI EMU, MSCI Europe-ex EMU, MSCI Japan and MSCI World.
“ESG investing tended to penalise ESG investors between 2010 and 2013, but rewarded ESG investors after 2014, both passive and active,” the report found.
Thierry Roncalli, head of quantitative research at Amundi, said: “Our new research indicates that ESG investing continues to offer value, but is becoming more mature with divergent trends across geographies, investment strategies and the three themes of E,S and G.”
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