Raising the Bar

Research agrees.  Studies overwhelmingly demonstrate that companies with sustainable policies are lower risk investments and frequently provide collateral benefits to investors.  So not only is sustainable investing good for the community, it’s good for business.  To put it another way, sustainable investing aligns with our core fiduciary responsibilities.

Here you will find a collection of studies, surveys, and papers demonstrating the value of integrating sustainability research into investment decisions.  We will continue adding to this list with updated reports across all five sustainability factors.

Note: Some of the studies require either a subscription, payment, or academic affiliation in order to access them.

	Title	Publication Date	Sustainability Factor(s)	Summary
	Applying Economics -- Not Gut Feel -- to ESG	8/2023	Sustainable Investment	Author employs economic and financial arguments to counter 10 ESG "myths": 1). Shareholder Value is Short-Termist, 2). Shareholder Primacy Leads to an Exclusive Focus on Shareholder Value, 3). Sustainability Risks Increase the Cost of Capital, 4). Sustainable Stocks Earn Higher Returns, 5). Climate Risk is Investment Risk, 6). A Company's ESG Metrics Capture its Impact on Society, 7). More ESG is Always Better, 8). More Investor Engagement is Always Better, 9). You Improve ESG Performance by Paying for ESG Performance, and 10). Market Failures Justify Regulatory Intervention.
	Regulating Gender Diversity: Evidence from California Senate Bill 826	1/2023	Human Capital	Authors study the financial impacts of the passing and implementation of California's SB 826, which established legal minimums for female representation on corporate boards. Results suggest that there are non-negative financial consequences resulting from gender mandates in boardrooms. The authors also find no evidence that these mandates led to a decrease in the quality of female board members hired following passage of SB 826.
	Does Sustainability Generate Better Financial Performance? Review, Meta-analysis, and Propositions	7/2022	Sustainable Investment	Meta-study that surveyed over 1,100 peer-reviewed studies and 27 meta-analyses published between 2015 and 2020. Found that while ESG performance was associated with stronger financial performance at the firm level, there was no distinction in financial performance between ESG and non-ESG funds. The authors also arrived at three additional propositions: ESG as an integration strategy seems to perform better than screening or divesting, ESG investing seems to provide asymmetric benefits, especially during an economic downturn, and decarbonization strategies can potentially capture a climate risk premium.
	Lifting Financial Performance by Investing in Women	11/2023	Human Capital	Study by BlackRock looked at data from companies listed in the MSCI World Index (an index of 1,583 companies from 23 countries) between 2012 and 2023. Found that companies with greater gender parity in their workforce were associated with 29% higher returns on assets (ROAs) on average than country and industry group peers with the lowest female representation. Importantly, companies tended to perform best when gender representation was equal, as opposed to overrepresentation by either gender.
	Green Supply Chain Management and Financial Performance: The Mediating Roles of Operational and Environmental Performance	2/2018	Business Model & Resilience	This study investigates the mediating effects of environmental and operational performance on the relationship between green supply chain management (GSCM) and financial performance. The proposed relationships are analyzed using survey data from a sample of 126 automobile manufacturers in China. The results suggest that GSCM as an integral supply chain strategy is significantly and positively associated with both environmental and operational performance, which then indirectly leads to improved financial performance.
	Are the Good Spared? Corporate Social Responsibility as Insurance Against Cyber Security Incidents	3/2023	Social Capital	Exploring a sample of 230 breached firms, the study finds that data breaches lead to significantly negative corporate financial performance (CFP) outcomes for low corporate social responsibility (CSR) firms, with the dynamic being particularly pronounced in consumer-sensitive industries. Further, it shows that firms increase their CSR activities in the aftermath of a breach to recover lost goodwill and regain stakeholder trust.
	CDP Global Water Report 2020	3/2021	Environmental	In 2020, the total potential financial impact of reported water risks (as disclosed by companies in their CDP disclosures) was up to $301 billion; while responders reported that the money required to mitigate those risks was only $55 billion.
	Supply Chain Sustainability and Performance of Firms: A Meta-Analysis of the Literature	5/2020	Business Model & Resilience	The study confirms a positive association between the various aspects of supply chain sustainability practices and firm performance and finds that the strength of sustainability-firm performance relationships grows over time. Findings also suggest a stronger relationship between sustainability-firm performances in manufacturing industries than in service industries.
	Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks	3/2021	Environmental	This study finds that environmental shareholder activism increases the voluntary disclosure of climate change risks, especially if initiated by institutional investors, and even more so if initiated by long-term institutional investors. It also finds that companies that voluntarily disclose climate change risks following environmental shareholder activism achieve a higher valuation post disclosure.
	Impact of Climate Change Mitigation Policies on Corporate Financial Performance: Evidence-Based on European Publicly Listed Companies	6/2020	Environmental	This study examines the relationship between climate change and firm performance in the context of European publicly listed companies. A financial statement analysis of European publicly traded firms with high environmental performance shows that they register high corporate financial performance. Environmental performance positively impacts financial performance (ß = .013, p-value? the firm-wide adoption of environmental practices reduces environmental risks, and thereby lowers production costs and increases profits.
	Evaluation of Strategic and Financial Variables of Corporate Sustainability and ESG Policies on Corporate Finance Performance	2/2021	Multiple	Overall, the regressions proved that there is no inherent financial benefit to being sustainable, however it is important to state that there are numerous non-financial benefits to acting in a sustainable manner such as increased reputation, feel-good factor of being eco-aware, increased access to debt and equity financing and perhaps better credit ratings and overall contribution to a better environment.
	Counterproductive Sustainable Investing: The Impact Elasticity of Brown and Green Firms	2/2023	Sustainable Investment	A reduction in financing costs (i.e. greater investment from sustainable investors) for firms that are already green leads to small improvements in impact at best. In contrast, increasing financing costs for brown firms (i.e. Divestment) leads to large negative changes in firm impact. Thus, sustainable investing that directs capital away from brown firms and toward green firms may be counterproductive, in that it makes brown firms more brown without making green firms more green.
	Does the stock market fully value intangibles? Employee satisfaction and equity prices	3/2011	Human Capital	A hypothetical value-weighted portfolio of the “100 Best Companies to Work For in America” earned an annual four-factor alpha of 3.5% from 1984 to 2009, and 2.1% above industry benchmarks. It also exhibited significantly more positive earnings surprises and announcement returns.
	Does the Market Value Environmental Performance?	5/2001	Human Capital	Bad environmental performance is negatively correlated with the intangible asset value of firms. The average "intangible liability" for firms in the sample is $380 million - approximately 9% of the replacement value of tangible assets. Legally emitted toxic chemicals have a significant effect on the intangible asset value of publicly traded companies. A 10% reduction in emissions of toxic chemicals results in a $34 million increase in market value. The magnitude of these effects varies across industries, with larger losses accruing to the traditionally polluting industries.
	Corporate Governance and Financial Performance: The Interplay of Board Gender Diversity and Intellectual Capital	11/2022	Governance & Leadership	Used a sample of 4,008 North American firms between 2002-2020 to examine relationship between Board Gender Diversity (BGD) and firm performance. Found that firms with a gender diversity policy had 13.4% higher ROAs than firms without such policy. Additionally, a 10% increase in BGD was associated with a 2% increase in firm value.
	Sustainable Development and Financial System: Integrating ESG Risks Through Sustainable Investment Strategies in a Climate Change Context	4/2021	Environmental	Compares the performance of funds based on their investment practice: negative screening, positive screening, negative + positive screening, screening + engagement, and impact investment. The study looked at US, European, and Global large cap equity funds, as well global emerging market funds. Finds that funds employing screening alone (particularly negative screening) are subject to higher ESG and Carbon Risk, as computed by Sustainalytics’ ESG Risk Rating approach.
	Dual-Class Structures and Classified Boards: Evidence from 2018-2023	8/2023	Governance &Leadership	For companies with both a dual-class stock (without Sunset Provision) and Classified Boards that have been public for five or more years, annualized returns were significantly lower than broad stock indices. These companies had an average annualized return of 3.70% (median was 5.07%) compared to the average return of small- and medium-cap U.S. companies (5.53%) and the U.S. total market (10.85%) for the same time period.
	Diversity Improves Performance and Outcomes	8/2019	Human Capital	Research demonstrated positive associations between diversity, quality and financial performance. Healthcare studies showed patients generally fare better when care was provided by more diverse teams. Professional skills-focused studies generally find improvements to innovation, team communications and improved risk assessment. Financial performance also improved with increased diversity. A diversity-friendly environment was often identified as a key to avoiding frictions that come with change.
	Paid Family Leave: The Effects of Paid Family Leave on Firm Performance	12/2020	Human Capital	Companies that offer paid family leave lower the labor market frictions for female workers in corporate settings. Those establishments that implemented paid family leave policies in accordance with state laws increased their productivity by about 5%.