ESG scores and true environmental impact
Presentation Type
Abstract
Faculty Advisor
Greg Pope
Access Type
Event
Start Date
25-4-2025 10:30 AM
End Date
25-4-2025 11:29 AM
Description
In investment banking, disjoint information regarding the firm's environmental impact is suspected to exist between shareholders, consumers, and corporate employees. While ESG scores can be easily falsified, absolute values related to a portfolio's true impact on climate change can show a very different narrative than the firm depicts. The study examines 50 high-yield index funds; 25 are ESG-oriented, and 25 are not. Both short- and long-term ROIs and several sustainability-related criteria released by MorningStar, a financial firm specializing in investment management research, are examined. A model is then developed through statistical analysis, which can be used to predict if a portfolio has a real impact on combating climate change or if its unreasonably high ESG score is due to corporate greenwashing.
ESG scores and true environmental impact
In investment banking, disjoint information regarding the firm's environmental impact is suspected to exist between shareholders, consumers, and corporate employees. While ESG scores can be easily falsified, absolute values related to a portfolio's true impact on climate change can show a very different narrative than the firm depicts. The study examines 50 high-yield index funds; 25 are ESG-oriented, and 25 are not. Both short- and long-term ROIs and several sustainability-related criteria released by MorningStar, a financial firm specializing in investment management research, are examined. A model is then developed through statistical analysis, which can be used to predict if a portfolio has a real impact on combating climate change or if its unreasonably high ESG score is due to corporate greenwashing.
Comments
Poster presentation at the 2025 Student Research Symposium.