Investigating ESG For Alpha Generation

• Environmental, Social and Governance (ESG) policies are an important measure of risk mitigation and are an alternative signal for alpha
• Emerging markets typically have less opportunity for ESG evaluation, but answers are available and incentive is high to uncover and evaluate

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As man-made risks that include climate change, data privacy and corruption continue to grow and evolve, a company’s values and policies to mitigate against them through a developed ESG framework must be fit for purpose to protect long term growth and ensure investor support.

As Mercer identified in 2015 -“Investment that considers sustainability isn’t about changing the world – it’s about understanding how the world is changing.”  

In recent years a growing number of climate and socially conscious investors have been...