What green investing means for companies, shareholders, and society
“During the coronavirus crash of the spring of 2020, global stock markets experienced one of the steepest drops in history. Worried investors turned to professional money managers to help them navigate these volatile markets, as is typical in times of uncertainty. It turns out that during this period, active funds did better the higher they ranked in sustainability ratings, and it was driven in large part by environmental sustainability, which is the E in ESG investing. It’s also known as green investing. This leads to some questions, among them, what made greener investments outperform? And when do they deliver better returns than the alternative? Chicago Booth’s Lubos Pastor and his coauthors have developed a model to explain what going green could mean for investors.”