RCM, a company of Allianz Global Investors, revealed in August 2011 that investors’ portfolios are not negatively impacted by the introduction of environmental, social and governance (ESG) criteria into the stock selection process, and was able to demonstrate a probability of outperformance over the longer term.
'RCM’s research tested the impact of ESG issues on portfolio performance over the period 2006 to 2010. The evidence shows that investors could have added 1.6 per cent a year over just less than five years to their investment returns by allocating to portfolios that invest in companies with above-average ESG ratings. So not only does this demonstrate that investors’ portfolios are not negatively impacted by the introduction of ESG criteria into the stock selection process, but there is also a probability of outperformance over the longer term'.
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