ESG investing: a critical study between myth and reality

By Sofiane Vandecasteele,  student in the Dual Master’s Degree in Law and Finance

The upheaval associated with the COVID-19 pandemic highlighted how exogenous causes could jeopardize the smooth functioning of the current economy. While the consideration of ESG factors is not new, investors and investment funds have increased the integration of these criteria in their portfolio construction logic and their investment choices. Therefore, this study considers how the integration of ESG factors has been strengthened by the current pandemic, amid the development of a new regulatory framework impacting selection strategies and the legal documentation (1). In addition, the study provides an analysis of current market data and research articles highlighting how the integration of ESG criteria can improve stock market performance and resilience of companies (2). However, following a non-Manichean approach, this study also aims to identify the limits and pitfalls of these results, calling for caution with regard to over-hasty conclusions (3).

Link to the article: ESG investing: a critical study between myth and reality