Summary
This report presents the inaugural ESG and Global Investor Returns Study conducted by Kroll, which examines the relationship between the historical returns of publicly traded companies and their ESG ratings. The study aims to determine if companies with higher ESG ratings outperform those with lower ratings. It highlights the growing relevance of ESG investing for various stakeholders, including individual investors and asset managers, while addressing the confusion surrounding ESG's role in investment decisions. The study analyzes data from over 13,000 companies across multiple geographies and industries, focusing on the period from 2013 to 2021. Key findings indicate that companies rated as ESG Leaders achieved significantly higher average annual returns compared to Laggards. The report further discusses the implications of these findings for investors and stakeholders in the context of evolving regulatory and financial reporting trends. It also outlines future research directions to explore the relationship between ESG ratings and investment performance.
