Sustainable Research
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.
1/2025
Governance & Leadership
Research on racial minority strategic leaders is growing, with majority of evidence showing their representation benefits firm outcomes like performance and innovation. This review of 147 studies highlights factors at the firm, board, individual, and environmental levels that shape representation, but also identifies three pressing challenges: improving methodology, strengthening theory, and enhancing generalizability through contextual analysis. The authors propose a roadmap for future research to address these gaps and advance understanding of racial minority leadership in strategic roles.
8/2022
Governance & Leadership
Recent research on the appointment of Black CEOs shows markets respond positively, with average abnormal returns of +3.1% compared to earlier studies reporting negative reactions. The evidence suggests that investor biases are outweighed by recognition of the higher standards and exceptional qualifications Black CEOs must meet to advance. Boards should note that diverse leadership not only strengthens representation but also enhances market confidence and firm performance.
5/2024
Governance & Leadership
This study shows that board gender diversity (BGD) interventions tend to improve investment outcomes, with firms reducing inefficient investment by 0.6% of total assets (6.5% of total investment) and becoming 4 percentage points more likely to achieve above-median efficiency. The effects are strongest when interventions are mandatory, strictly enforced, and lead to substantial increases in female board representation, and the findings are robust across multiple analytic tests. Overall, the results provide causal evidence that advancing gender diversity on boards enhances corporate investment efficiency and carries important implications for both policy and practice.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
2/2023
Human Capital
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. Instead, sustainable-minded investors can to continue to invest in brown firms and engage them with the goal of making a difference.
3/2011
Human Capital
Employee satisfaction is positively linked to long-term stock performance, with top-rated workplaces outperforming benchmarks, suggesting that human capital enhances shareholder value, intangible assets are undervalued by markets, and socially responsible investing can boost returns.
5/2001
Sustainable Investment
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.
11/2022
Human Capital
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.
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.
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.
