ESG ‘not a factor’ in share price resilience during Covid-19 crisis
Researchers found that firms’ ESG ratings were also “significantly negatively associated with returns” in the Q2 recovery period.
Image: OSORIOartist/Shutterstock
There’s bad news for supporters of companies who score highly on environmental, social and governance (ESG) factors. Academics claim that lofty ESG ratings failed to “immunise” the stock prices of US companies when markets plunged during the Covid-19 crisis in the first quarter of 2020.
And things got worse for companies proud of their ESG accolades. While there was “insignificant” insulation from market turbulence in the first three months of the year—the height of the crisis—researchers say ESG had a notable “negative” effect during the recovery period in the quarter that followed.
Writing in a paper published this w
Like this article? Sign up to our newsletter to get more articles like this delivered straight to your inbox. For thoughtful journalism, expert insights on corporate governance & an extensive library of reports, guides and tools to help boards & directors navigate the complexities of their roles. Subscribe to Board Agenda Subscribe Here
Related Stories
-
Fat Cat Thursday renews pressure over executive pay
High Pay Centre's Fat Cat Thursday reveals that FTSE 100 CEOs can earn in three days what the average employee is paid in a year.
-
France’s AMF investigates exec on ‘corporate behaviour’
Former Alcatel chief executive faces criticism for departing during Nokia takeover.
-
Dutch corporate governance committee calls for more shareholder activism
The Dutch corporate governance committee believes "it’s time to pay more attention to the role and involvement of shareholders, particularly with regard to long-term value creation".
